Reply by PAW_Fl on 1/9/06 4:33pm
Msg #87147
The Benefits of the Junk Fax Prevention Act of 2005
Despite its name, the Junk Fax Prevention Act of 2005 will ease certain restrictions on businesses that send unsolicited faxes. The U.S. Senate passed the Act, S. 714, on June 24, 2005, the House of Representatives approved it on June 28, 2005, and President Bush signed it into law July 9, 2005. The Act provides that companies that have an “established business relationship” with a customer or potential customer may fax that person or entity unsolicited advertisements despite the general ban on such faxes.
The Established Business Relationship Exception
The Telephone Consumer Protection Act, which became federal law in 1991, and which is still in effect, prohibits businesses from using fax machines to send unsolicited advertisements. An unsolicited advertisement is “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” The Federal Communications Commission issued rules implementing the TCPA in 1992. Those rules provided that if a business had an “established business relationship” or “EBR” with someone, that person could be deemed to have consented to receive unsolicited advertisements. The FCC defined an EBR as a “prior or existing relationship formed by a voluntary two-way communication” between the sender and receiver of the fax, on the basis of an “inquiry, appreciation, purchase or transaction” by the fax recipient regarding products or services the sender offered, so long as the relationship had not been terminated by either party. From 1992 through July, 2003, the FCC enforced the TCPA with this understanding.
Eventually, though, the FCC changed its position on EBR, mainly in response to public comments about unsolicited facsimile advertisements. Consumers felt “besieged,” the FCC stated, by unsolicited faxes. Consumers also complained about bearing the cost of fax paper and toner and incurring the opportunity costs of time spent reading and disposing of faxes, as well as the loss of use of their fax machines when advertisements were printing. So, on July 3, 2003, in the same report that established the national Do-Not-Call registry, the FCC reversed its earlier conclusion that an EBR between a fax sender and recipient establishes the consent needed to permit businesses to send unsolicited faxes to their customers. Instead, the FCC concluded the sender must obtain the fax recipient’s express invitation or permission to fax in writing. Under the FCC’s new rule, the writing had to include the recipient’s signature, contain a clear indication that he or she consented to receiving such faxed advertisements, and provide the fax number to which faxes could be sent.
The July, 2003, Order also modified the FCC definition of an EBR in the context of telephone solicitations, limiting the duration to a maximum of 18 months following a purchase or transaction, or a maximum of three months following an inquiry or application. Before that, no limit had been placed on the EBR’s duration, but the FCC concluded time limits were “necessary to minimize confusion and frustration for consumers who receive calls from companies they have not contacted or patronized for many years.”
Many industry petitioners challenged the FCC’s view that eliminating the EBR exception for faxes would benefit consumers, pointing out potential harmful consequences of it. For example, a restaurant would not be able to fax a menu to a customer who called and requested one unless the caller provided a written consent in advance. Similarly, realtors would be effectively prevented from faxing potential new home buyers listing information requested by phone, adding unnecessary hurdles and delays even when consumers clearly wanted to receive the faxes quickly.
In light of these concerns, on August 18, 2003, the FCC stayed the effective date of the order eliminating the EBR exception and requiring written consent to faxes until January 1, 2005, and later until June 30, 2005. The FCC justified the stays because “the public interest would best be served by allowing senders of such advertisements additional time to obtain such express permission before the new rules become effective.” Recently, the FCC further extended the stay until January 9, 2006, mainly to allow time for the fate of the Junk Fax Prevention Act of 2005 to be determined.
Effect of the Junk Fax Prevention Act on EBR
Now that President Bush signed the Act into law, the EBR exception will continue. Under the Act, even after January 9, 2006, businesses are allowed to fax unsolicited advertisements to individuals without prior express invitation or permission if the business has an established business relationship with the fax recipient. The Act does not set a time limit on the duration of the EBR and, further, prohibits the FCC from setting a time limit for the first three months after the Act becomes law. Following this three-month period, though, the FCC can create a time limit once it: (1) determines whether the existence of the EBR exception has resulted in a significant number of complaints regarding unsolicited fax advertisements; (2) determines whether a significant number of those complaints involve faxes sent based on an EBR longer than the FCC believes is consistent with consumers’ reasonable expectations; (3) evaluates both the costs to senders of demonstrating the existence of an EBR within a specified time period and the benefits to recipients of limiting the EBR; and (4) determines whether, for small businesses, the costs would not be unduly burdensome.
Another positive aspect of the Junk Fax Act for businesses is that it amends the definition of “unsolicited advertisement” to mean advertising “which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.” This change statutorily prohibits the FCC from promulgating a rule requiring prior express permission to fax be in writing.
Duties Under the Act
The Act creates certain additional duties for businesses. Unsolicited fax advertisements must include a clear, conspicuous notice on the first page that informs recipients that, at any time, they can opt out of receiving future faxes and that the sender must comply with any opt-out request within the shortest reasonable time. The opt-out notice must include “a domestic contact telephone and facsimile machine number for the recipient to transmit such a request to the sender; and a cost-free mechanism for a recipient to transmit a request.” The cost-free mechanism can be a toll-free or a local telephone number.
The notice also must explain the proper requirements for a valid opt-out, which are that the opt-out must: (1) identify the telephone or fax numbers subject to the request; (2) be made to the telephone or fax number of the sender or by any other method as determined by the FCC; and (3) be made by a person who did not later provide an express invitation or permission to receive unsolicited advertisements. Finally, any unsolicited fax must contain in the margins at the top or bottom of each page the date and time it is sent, the identification of the sender of the message, and the telephone number of the sending machine.
To minimize the possible financial consequences to businesses of certain provisions, the Act gives the FCC the authority to exempt some classes of small business senders from providing the additional cost-free opt-out mechanism if the FCC determines the costs are unduly burdensome given the revenues generated by those types of small businesses. The FCC also has the authority to establish an exemption from the opt-out notice requirements for tax-exempt, nonprofit trade or professional associations if the faxes further a group’s tax-exempt purpose.
Conclusion
The Junk Fax Prevention Act of 2005 maintains the established business relationship exception to the ban on unsolicited advertisements, eliminates the requirement that, where there is no EBR, prior consent to receiving such faxes must be in writing, and requires businesses that send faxes to comply with opt-out notice requirements.
Please Note:
This article should not be considered as, or as a substitute for, legal advice and is not intended to nor does it create an attorney-client relationship. Because the information included in it is general, it may not apply to your individual legal or factual circumstances. You should not take (or refrain from taking) any action based on the information you obtain from this document without first obtaining professional counsel.
(Source: BusinessMedia © 2005 Crawford Communications, LLC. All rights reserved.)
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