Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991

Federal Communications Commission

DA 05-1667

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

Rules and Regulations Implementing the

)

CG Docket No. 02-278

Telephone Consumer Protection Act of 1991

National Automobile Dealers Association Petition

for Declaratory Ruling

DECLARATORY RULING

Adopted: June 14,2005

Released: June 15,2005

By the Acting Chief, Consumer &

Governmental Affairs Bureau:

I.

INTRODUCTION

1.

In this Declaratory Ruling, we clarify that the Commission's rules that prohibit the

initiation of telephone solicitations to residential telephone subscribers registered on the national do-not-

call list do not extend to calls made for the limited purpose of informing consumers of recalls due to a

product safety or defect concern and scheduling appointments to correct such problems at no cost to the

consumer.' We believe this clarification will ensure that consumers continue to receive important product

safety information without unduly infringing upon the consumer privacy protections afforded by the

national do-not-call list.

n.

BACKGROUND

A.

Telephone Consumer Protection Act of 1991

2.

On December 20,1991, Congress enacted the Telephone Consumer Protection Act

(TCPA), as codified in section 227 of the Communications Act of 1934, as amended (the Act), in an

effort to address a growing number of telephone marketing calls and certain telemarketing practices

Congress found to be an invasion of consumer privacy and even a risk to public safety.^ In relevant part,

the TCPA required the Commission to "initiate a rulemaking proceeding concerning the need to protect

residential telephone subscribers' privacy rights"^ and specifically authorized the Commission to consider

"the establishment and operation of a single national database to compile a list of telephone numbers of

residential subscribers who object to receiving telephone solicitations."^ Section 227(aX3) of the Act

'

SeeAl C.F.R. § 64.1200(cX2).

^ Telephone Consumer Protection Act of 1991, Pub. L. No

sidential telephone subscribers' privacy rights"^ and specifically authorized the Commission to consider

"the establishment and operation of a single national database to compile a list of telephone numbers of

residential subscribers who object to receiving telephone solicitations."^ Section 227(aX3) of the Act

'

SeeAl C.F.R. § 64.1200(cX2).

^ Telephone Consumer Protection Act of 1991, Pub. L. No. 102-243,105 Stat. 2394 (1991), codified at 47 U.S.C. §

227. The TCPA amends Title II of the Communications Act of 1934,47 U.S.C. § 201 er seq.

'

47 U.S.C. § 227(cXl).

Ul U.S.C. § 227(cX3).

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Federal Communicatioiis Commission

DA 05-1667

defines a "telephone solicitation" as "the initiation of a telephone call or message for the purpose of

encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted

to any person..

In 1992, the Commission adopted rules implementing the TCPA, opting at that time to

require that entities making telephone solicitations institute procedures for maintaining company-specific

do-not-call lists rather than establishing a national do-not-call list.'

3.

On March 11,2003, the Do-Not-Call Implementation Act was signed into law, requiring

the Commission to issue a final rule in its ongoing TCPA proceeding within 180 days of enactment, and

to consuh and coordinate with the Federal Trade Commission (FTC)

to "maximize consistency" with the

rules promulgated by the FTC.^ On July 3,2003, the Commission revised the TCPA rules and adopted

new rules to provide consumers with several options for avoiding unwanted telephone solicitations.' In

particular, the Commission established a national do-not-call registry that would be jointly administered

by the FTC and this Commission

eral Trade Commission (FTC)

to "maximize consistency" with the

rules promulgated by the FTC.^ On July 3,2003, the Commission revised the TCPA rules and adopted

new rules to provide consumers with several options for avoiding unwanted telephone solicitations.' In

particular, the Commission established a national do-not-call registry that would be jointly administered

by the FTC and this Commission. The national registry, which went into effect on October 1,2003,

prohibits, with limited exceptions, the making of any telephone solicitation to a residential subscriber that

has registered his or her telephone number on the national do-not-call registry.' To date approximately

88 million residential telephone numbers have been registered on the national do-not-call registry.

B.

National Antomobile Dealer Association Petition

4.

On March 28,2005, the National Automobile Dealers Association (NADA)

filed a

request for clarification that the national do-not-call rules do not prohibit an automobile or truck

dealership from calling consumers at phone numbers registered on the national registry for the purpose of;

(i) informing consumers that their vehicles are subject to recall due to a safety, emissions or other defect

or problem, and (ii) scheduling appointments with consumers at the dealership's service facility to correct

the noted problem." NADA contends that calls regarding product recalls do not fall within the TCPA's

definition of "telephone solicitation" since consumers are neither requested nor required to purchase the

services necessary to repair defects or problems addressed by a recall." NADA argues that clarifying this

issue will help advance the important public policy objectives of increasing consumer awareness of, and

response to, recalls involving products sold by franchised automobile and truck dealers." NADA notes

that because there are potential civil and administrative penalties involved in violations of the TCPA, any

'47U.S.C. §227(aX3)

r problems addressed by a recall." NADA argues that clarifying this

issue will help advance the important public policy objectives of increasing consumer awareness of, and

response to, recalls involving products sold by franchised automobile and truck dealers." NADA notes

that because there are potential civil and administrative penalties involved in violations of the TCPA, any

'47U.S.C. §227(aX3).

_

_ _

-

* See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90,

Report and Order, 7 FCC Red 8752 (1992)

(1992 TCPA Order)-, see also 47 C.F.R. § 64.1200.

'

Do-Not-Call Implementation Act, Pub. L. No. 108-10, 117 Stat. 557 (2003), codified at 15 U.S.C. § 6101.

* Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278,

Report and Order, 18 FCC Red 14014 (2003) (2003 TCPA Order).

'47C.F.R. § 64.1200(cX2). See also Mainstream Marketing Services, Inc. v. Federal Trade Comm'n,35i P.3A

1228 (10* Cir. 2004) (upholding the constitutionality of the national do-not-call registry), cert, denied, 2004 WL

2050134 (U.S. Oct. 4,2004) (No. 03-1552).

"

National Automobile Dealers Association, Petition for Declaratory Ruling dated March 28,2005 (NADA

Petition). NADA represents approximately 20,000 franchised automobile and tmck dealers.

"

NADA Petition at 1-2. NADA notes that the FTC recently designated product recall messages as "transactional

or relationship" rather than commercial pursuant to proceedings under the Controlling the Assault of Non-Solicited

Poraogr^hy and Marketing Act of2003 (citing Definitions and Implementation Under the CAN-SPAM Act; Final

Rule, 70 Fed. Reg. 3110,3117 (Jan. 19,2005)).

"

NADA Petition at 1.

10737

DA Petition at 1-2. NADA notes that the FTC recently designated product recall messages as "transactional

or relationship" rather than commercial pursuant to proceedings under the Controlling the Assault of Non-Solicited

Poraogr^hy and Marketing Act of2003 (citing Definitions and Implementation Under the CAN-SPAM Act; Final

Rule, 70 Fed. Reg. 3110,3117 (Jan. 19,2005)).

"

NADA Petition at 1.

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Federal Communications Commission

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ambiguity on this point may significantly reduce telephone notifications to consumers about vehicle or

equipment recalls and undermine the efforts of vehicle manufacturers, parts manufacturers, the National

Highway Traffic Safety Administration and the Environmental Protection Agency to maximize the

effectiveness of such recalls."

m. DISCUSSION

5.

We clarify that telephone calls to residential subscribers for the limited purpose of

informing consumers of recalls due to a product safety or defect concern and scheduling appointments to

correct such problem at no cost to the consumer are not prohibited under the Commission's rules even if

the recipients' telephone numbers are registered on the national do-not-call list." Section 64.1200(cX2)

of the Commission's rules provides that "[n]o person or entity shall initiate any telephone solicitation, as

defmed in [section 64.120()(fX9)] of this section" to "[a] residential telephone subscriber who has

registered his or her telephone number on the national do-not-call registry of persons who do not wish to

receive telephone solicitations..

We agree with NADA that calls made to consumers for the purpose

of informing them of product recalls are not "telephone solicitations" because such calls are not made for

the "purpose of encouraging the purchase or rental of, or investment in, property, goods, or services..."."

As a result, these rules do not prohibit such calls to consumers that have registered their telephone

numbers on the national do-not-call list.

6

calls made to consumers for the purpose

of informing them of product recalls are not "telephone solicitations" because such calls are not made for

the "purpose of encouraging the purchase or rental of, or investment in, property, goods, or services..."."

As a result, these rules do not prohibit such calls to consumers that have registered their telephone

numbers on the national do-not-call list.

6.

We believe this clarification will ensure that consumers are made aware of potential

safety concerns involving products that they have purchased and have an opportunity to correct those

defects in a timely manner. There are approximately 88 million residential telephone numbers currently

on the national do-not-call list. This represents a significant number of consumers that may be put at risk

by delays in receiving important product safety information. We note that although the NADA limits its

request for clarification to product recalls relating to the automobile and trucking industry, the rationale

underlying the clarification discussed above extends to any product-related recall.

7.

Although we clarify that product recalls are not telephone solicitations subject to the

restrictions of the national do-not-call list, we caution that our clarification is limited to those situations in

which the telephone call is made for the purpose of informing consumers of the product recall and

scheduling appointments to have the defect repaired or replaced at no cost to the consumer. To the extent

that such calls also include offers encouraging the purchase of other goods or services, the call will be

deemed a prohibited telephone solicitation. This limitation is necessary to ensure that the consumer

privacy protections afforded by the national do-not-call list are not circumvented.

"

NADA Petition at 1-2. See also Letter from Jacqueline Classman, Chief Counsel, U.S. Department of

Transportation, National Highway Traffic Safety Administration to Marlene H

er goods or services, the call will be

deemed a prohibited telephone solicitation. This limitation is necessary to ensure that the consumer

privacy protections afforded by the national do-not-call list are not circumvented.

"

NADA Petition at 1-2. See also Letter from Jacqueline Classman, Chief Counsel, U.S. Department of

Transportation, National Highway Traffic Safety Administration to Marlene H. Dortch, FCC dated April 29,2005

(indicating "that a limited exemption to the National Do-Not-Call rules to permit dealers to call and inform a vehicle

owiier of the existence of a recall and to schedule an appointment to have ^at vehicle remedied would enhance

motor vehicle safety by improving consumer response rate to manufacturer recall notices.").

"

The TCPA and our rules limit registrations on the national do-not-call list only to residential telephone

subscribers. Thus, the national do-not-call rules create no impediment to calls made to business subscribers. See 47

U.S.C. § 227(cX3): 47 C.F.R. § 64.1200(cX2).

"

47 C.F.R. § 64.1200(cX2) (emphasis added).

"

See 47 C.F.R. § 64.1200(fK9) (incorporating the statutory definition of telephone solicitation in section 227(aX3)

of the Act). See also CAN-SPAM Act, Section 3(2)(B) and 3(17XA), codified at 15 U.S.C. §§ 7702(2XB) and

7702(17XA). The CAN-SPAM Act states that "commercial" messages do not include "transactional or

relationship" messages, such as messages regarding product recall information.

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See 47 C.F.R. § 64.1200(fK9) (incorporating the statutory definition of telephone solicitation in section 227(aX3)

of the Act). See also CAN-SPAM Act, Section 3(2)(B) and 3(17XA), codified at 15 U.S.C. §§ 7702(2XB) and

7702(17XA). The CAN-SPAM Act states that "commercial" messages do not include "transactional or

relationship" messages, such as messages regarding product recall information.

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Federal Communications Commission

DA 05-1667

IV.

ORDERING CLAUSES

8.

Accordingly, IT IS ORDERED that, pursuant to Sections 1-4, 227, and 303(r) of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 227, and 303(r); and Section 64.1200

of the Commission's Rules, 47 C.F.R. § 64.1200, this Declaratory Ruling in CG Docket No. 02-278 IS

ADOPTED as set forth herein.

9.

IT IS FURTHER ORDERED,

that the Petition for Declaratory Ruling filed by the

National Automobile Dealers Association IS GRANTED to the extent stated herein.

FEDERAL COMMUNICATIONS COMMISSION

Monica S. Desai

Acting Chief

Consumer &

Governmental Affairs Bureau

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