Learn How The TCPA Affects Your Dealership With Our Compliance Lawyer - Josh Stevens

Hello again. If you're watching this, a few weeks ago we released our, our episode with Josh on data privacy. We're oddly wearing the same clothes as we were then. How you doing, Josh?

I'm doing well. I feel like we're, this is, this is like one of those TV shows where across the whole season they wear the same clothes and everyone goes, I wonder, I wonder why and how.

Yeah. Well, today we're going to talk about PCPA just to cover a few basic topics. Talk about what's changed. There is a big change when it comes to consent that we'll talk about a little bit later. Some things with AI. And so let's dig into it. Tcpa, big scary topic, but not that hard to comply with if you just are a little bit conscientious, right?

Yeah, absolutely. And it's especially since the Facebook case, which is now a couple years old, it's gotten easier to comply with the tcpa, but it's still, it requires setting up the right procedures and then following them like that. That old commercial, set it and forget it. Right. It's kind of like that with tcpa. Once you set up your compliance program, then you can kind of just keep running it.

Now just to. And we're talking about everyone complying with the federal TCPA laws. There are state PCBA laws. There are also laws in place at the state level to where they don't want your business. You know, please don't contact me anymore. So we're talking about federal TCPA and some states that today. Let's first of all just take some of the basics. Talk about the definition of an ATDS and how that is in conjunction with the TCPA with cell phones, with scrubbing against the federal data contact, but just the very base.

Yeah, sure. So the acronym ATDS stands for an automatic telephone dialing system. And, and under the tcpa, that is a system that uses a random or sequential number generator to store produced numbers. And that phrase has been the source of much litigation and debate over the years. But in 2021, the Supreme Court ruled in a case called Facebook VDugid that in order to be an ATDS, a system has to use that randomer sequential number generator to produce the telephone numbers that that are being called and we've seen this reinforced by Quartz pretty much uniformly ever since, that systems that dial from a pre populated list of numbers, so you upload a list into the system and then the system dials off of that list are not an ATDS under the tcpa. And that's Been pretty uniform since the Facebook decision. Now, some states have slightly different definitions, as you mentioned, Scott, of what is an auto dialer or things like that at the state level. But that's at the TCPA level. And the reason that matters is because if you use an ATDS to make a marketing call or text to a cell phone or to any other line where someone's charged for the call, you need prior express written consent, which is a fairly onerous level of consent to make that communication. And so it's one of those situations where the court gave us kind of a benefit and some flexibility. People could use systems that maybe they couldn't use in the past where their consent wasn't great. But an ATDS is not the only thing under the TCPA that businesses need to worry about. And, and frankly, it's not where we're seeing most of the litigation anymore. We're primarily seeing claims under the rules around the use of pre recorded or artificial voices and around do not call violations, and in particular, do not call. We're seeing a lot of cases around do not call. And so those are, those are your three main ways that you can run a foul of the tcpa.

Okay, so let's, let's stick with atds for a second. Most dealers don't have to worry about that APDS definition. They're not getting it from a, from their desk phone. They're not getting an APDS from a click to call with their CRM or a manually initiated dialogue through volume right there. Those things generally they don't use, those are predictive dialers where they're dialing 20 people automatically and they've got five agents to join them. They do need to make sure that the call, that the outsourced. The call centers aren't using that service. Right, because they're on the hook.

So if you use an outsourced call center, there are two ways you can be liable under the tcpa. One is direct liability. You're the one who made the call. And the other is called vicarious liability, which is essentially you're the one who directed that the call be made. And so that's where an auto dealership who uses an outsourced call center could run afoul of the TCPA if the call center violates the tcpa.

So you should check, make sure that people are not using an atdf. If you outsource your call, always, always.

Do due diligence on your call centers.

Okay. We don't see this done anymore, but I run into it on occasion Ringless voicemail is a massive PCB evaluation. Right?

So, so, well, it can be done, right? It just, it requires some, some hurdles. So the FCC and courts have now made abundantly clear that ringless voicemail is the use of a prerecorded voice under the tcpa. And when you use a prerecorded voice, that also requires prior express written consent for marketing purposes, lower levels of consent perhaps for certain non marketing communications like appointment reminders, stuff like that. But there are content requirements and people don't realize that, that there are rules around what has to be in that message. And we see those violations all the time.

Okay, so if it is an atds, they always need to scrub against the federal VMAT contact list. You can make a TCPA violation with your desk fund, right?

Yeah. So do not call an ATDS or Independent Theories of Liability. And what people don't realize is exactly what you said. You can make a Do Not Call violation with a desk phone. You can make a Do Not Call violation with your cell phone. Because Do Not Call is about calling someone who's on the federal Do Not Call Registry without the legal right to do so. And it's not dependent on the technology used to make that call or send that text. And so the, the way that Do Not Call works is before you make a marketing call or text, you should scrub against the federal Do Not Call Registry unless one of two exceptions applies. You have written consent from the consumer for that communication and they have not revoked that consent, or you have an established business relationship with that consumer. And there are two ways to have an established business relationship. The first is what we call an inquiry ebr. And that is the consumer voluntarily inquired about your goods or services, and that one lasts for 90 days from their last inquiry. The other is called a transactional ebr, that one's based on their last purchase. So when they last paid you, based on a financial transaction, when they last paid you for a good or service, and that one lasts for 18 months. And what we find is businesses often don't do a good job of tracking those EBRs and knowing when they expire. And particularly in the auto dealer context, the transactional EBR, businesses often forget that that only lasts for 18 months. And they think, well, they bought something from me, so I have this EBR with them. I don't need to scrub against the Do Not Call registry, but they're calling them three years after they last made a purchase.

Yeah, these are very common in a dealership when you are making equity or buyback Call to a database or even depending on how you make the call for your lease portfolio replacement. Yep. Talk about what calls, what kind of calls can you make? And this is tricky by the way. This is just us talking. This isn't legal advice, but thank you, Scott. What calls can you guys make without scrubbing against the do not contact. And I would always look for advice before I do this anyway on your scripts and such. So go ahead on that.

Yeah, yeah. Because the wording really matters, right? That you, what, what you say, what the purpose of the call is, what you're trying to achieve with the call really matters. So generally speaking, if you're making a non marketing communication, you don't need to scrub against the do not call. But what falls within non marketing? Well, that's usually things like a reminder for an appointment that someone has already scheduled. So you're not trying to get them to set an appointment, you're informing them about an appointment they've already scheduled. That's a customer service survey. So they've already come into your dealership, you've interacted with them. You want to know how that went. That can be something like a recall communication. There is some debate around that. And, and so we, we do, I do always like to just warn, like definitely have a conversation in depth with your counsel if you're going to do recall type communications. But there is a potential argument there and anything that again does not have marketing content or purpose. So where we see people get in trouble a lot is they'll call to do, say a survey and you know, oh, thank you for coming in. How did it go? Blah, blah, blah, blah, blah. Oh, by the way, we're running a four tire deal next week if you want to come get some tires. Well now you've taken that survey that was non marketing and you've made it marketing.

Okay, what about just to switch gears a bit. What about sms? SMS is considered, it's governed in the US the same way as a phone call, right?

That's correct, yes.

Just with a lot better documentation.

Yeah.

So sending an automatic text or a text from your cell phone, if they're on the do not call, it does matter if you've got the EBR if you're doing it from an ATDS or not from an atds. A lot of dealers subscribe to the automatic text programs that are a lot of violations. Right. Because they're, they're, you know, that automatic text class would be considered an atds.

It's possible. I mean, after the Facebook decision, it's probably not very likely, but it's possible. I think the bigger risk from an autodialer standpoint is probably in the state definitions with the text platforms, because some do have these really broad definitions of an auto dialer. But where we also see it with the text platforms is the do not call issue. And so people load up the whole batch into the tax platform. They're not scrubbing the federal do not call registry. They're not properly applying EBRs. They're not scrubbing against their own internal do not call list. That's the other thing. Right. Every business has to maintain an internal do not call list. And it doesn't matter if a person has an ebr. If they're on your internal do not call list. You can't make a marketing call or text to them and they don't. And they don't scrub that.

Two more topics before we wrap up today that I want to cover, pre recorded messages. In February, the government came out with a definition of how outbound AI is governed, correct?

Yeah, yeah. So outbound AI is the same as using a pre recorded voice under the tcpa. So just like I talked about mentioned earlier, with the consent requirements and the content requirements, those, those get triggered.

I should have had this topic at the top of the call. I hope everyone's listened to this point because this is brand new. You no longer can collect consent verbally, right? Yep.

That's so. So that's the Bradley decision, Bradley v. Dental Plans, which just came down. Well, depending on when the person's watching this video, it may, may not have just come down, but when we're recording it, it just came down from a federal court. And I've seen some commentators say, oh, this is just one federal court, don't worry about it. But that's not the view I take. This is a pretty significant decision without getting into the weeds of it. Basically what the court said is that collecting prior express written consent under the TCPA through a recorded phone call is not sufficient to be prior express written consent because it doesn't comply with the E Sign Act. And so the FCC has said and reiterated just a few months ago when they made some changes to what's required for prior express written consent, that if you collect that electronically, it has to be in compliance with the E Sign Act. And so I, I fully expect to see in light of this decision, a lot of cases coming up where businesses had a recorded call and they were using that as their prior express written consent and plaintiffs challenging that and bringing TCPA lawsuits.

So. But What's a dealer to do? I mean they get a phone up. You know phone inquiries every day where someone says hey, I'd like to hear about your, this camera you guys have. What are they supposed to do to conduct their business? When someone calls in, inquires about something and needs follow up, they gotta run their business.

Well, don't use an atds. Pay attention to your inquiry. Ebr.

Right.

Because that person calling up saying hey, I'm interested in this car, that's an inquiry EBR for 90 days. Right. So pay attention to that 90 day window.

So that is, that does count as the inquiry. Yeah, okay. Yep. But just long term opting people in over the phone won't work. A tangent on this. Inside of auto and outside of auto, there's a lot of confusion with what is an opt in and we've seen some changes there too. Right. I opted in to this app for something unrelated and now dealers marketing companies are using those as legitimate opt ins for everything else. There were changes in that as well, right?

Yeah. So the FCC has said they've changed the definition of prior express written consent. And now prior express written consent needs to be on a one to one basis. Meaning you give consent for one particular seller to call you and the collection of that consent has to be logically and topically related to the product that they're offering. So it can't be like you just go over onto a website about washing machines and you fill out some form and then an auto dealership gets that lead. I don't know when that would ever happen. And, and uses that as consent. Right. That's not logically and topically related.

Jason. Josh. Josh. That happens every day. For people who conquest marketing, they buy a list that is an auto file. Most people work off one or two companies, list marketing companies and they've got all these opt ins. I wouldn't trust them if I were you. If I were you the dealer.

Not, not in, not in light of the, the FCC's recent changes and also I the campaign registry, if you text they, they're getting a lot stricter than they used to be on consent and vetting that before they'll let you register your text campaigns. So we've seen a number of clients who have ran into that as well.

This is an ocean of stuff. Each of these topics could have been a two or three hour discussion. I just wanted to bubble a few of them up. I do appreciate you coming. We of course, as you know, I pay your bills. Luckily we've been, we've been good at this but we really watch it every month and we try to stay abreast. How can people get a hold of you if they've got questions for their own business?

Yeah, well of course they can always reach out to you and I know that your clients certainly enjoy your service and we love having you as a client because you actually do stay on top of things. But if anyone wants to reach out to me, my email is jstevens s t e v e n s at@mslawgroup.com or you can go to our website. We've got tons of resources, blogs, webinars, all kinds of stuff there including a TCPA FAQ that people can check out and that's MsLawGroup.com.

Thanks, Josh. Appreciate it and have a great day. I hope. Will you come back again and do this?

I will happily come back and anytime you'll have me.

All right, sounds good. Thank you.

Thanks.