Many businesses use third parties to advertise their goods and services through telemarketing. But what happens when a third-party telemarketer or lead generator fails to comply with federal telemarketing law? Is the business off the hook for the illegal calls made on its behalf, simply because it chose to use an independent contractor instead of directly placing the calls, itself?
In a long-awaited declaratory ruling, the FCC has affirmed that businesses can be vicariously liable for the actions of their third-party telemarketers that violate the Telephone Consumer Protection Act ("TCPA"), a federal statute that protects consumers from unsolicited text messages and autodialed or prerecorded voice calls, junk faxes, and do-not-call violations, and provides for injunctive relief and statutory damages of up to $1,500 per violation. The FCC clarified that a business can be liable for violations by its representatives under a broad range of agency principles, including not only formal agency, but also based on principles of apparent authority or where the business ratifies the third party's illegal conduct by knowingly accepting its benefits.
The ruling recognizes the reality that legitimate businesses frequently use telemarketers that are judgment-proof, located outside the United States, or simply unable to be identified by the called party, and that the inability to hold a business liable for the illegal calls made on its behalf would, therefore, largely leave consumers without any real means to enforce their rights under the TCPA. Additionally, as the telemarketing industry itself acknowledges, businesses are in the best position to monitor and police TCPA compliance by their own third-party telemarketers. Thus, the fact that a business can be liable for the illegal calls of its third-party telemarketer will incentivize companies to ensure that their telemarketers actually comply with federal telemarketing laws, rather than reap the benefits of do-not-call violations or unlawful robocalls.
Read the FCC ruling here.
In a long-awaited declaratory ruling, the FCC has affirmed that businesses can be vicariously liable for the actions of their third-party telemarketers that violate the Telephone Consumer Protection Act ("TCPA"), a federal statute that protects consumers from unsolicited text messages and autodialed or prerecorded voice calls, junk faxes, and do-not-call violations, and provides for injunctive relief and statutory damages of up to $1,500 per violation. The FCC clarified that a business can be liable for violations by its representatives under a broad range of agency principles, including not only formal agency, but also based on principles of apparent authority or where the business ratifies the third party's illegal conduct by knowingly accepting its benefits.
The ruling recognizes the reality that legitimate businesses frequently use telemarketers that are judgment-proof, located outside the United States, or simply unable to be identified by the called party, and that the inability to hold a business liable for the illegal calls made on its behalf would, therefore, largely leave consumers without any real means to enforce their rights under the TCPA. Additionally, as the telemarketing industry itself acknowledges, businesses are in the best position to monitor and police TCPA compliance by their own third-party telemarketers. Thus, the fact that a business can be liable for the illegal calls of its third-party telemarketer will incentivize companies to ensure that their telemarketers actually comply with federal telemarketing laws, rather than reap the benefits of do-not-call violations or unlawful robocalls.
Read the FCC ruling here.
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