For years, consumer-facing companies have been subjected to draconian, disproportionate liability under the federal Telephone Consumer Protection Act (TCPA) for calling existing customers whose phone numbers have been reassigned without the company’s knowledge.
To address this problem, and provide much-needed relief to these well-intending companies, on Dec. 13, 2018, the FCC released new rules regarding the creation of a reassigned number database. Although they are no panacea, the rules are a step in the right direction to limit unintended TCPA liability. But implementation may prove difficult, especially given the delays related to the ongoing federal government shutdown that began on Dec. 22, 2018.
Hold the Line
According to the FCC and industry observers, the problem of unintended calls to reassigned numbers stems from the confluence of several issues:
- Tens of millions of phone numbers are available for reassignment each year;
- There is no minimum duration a carrier must hold a number before reassigning it; and
- Because numbers can be reassigned just days after disconnection, it is practically impossible for companies reliant on customer engagement to prevent calls to recycled numbers in the current environment.
Or, as the FCC succinctly put it, “a number used by one consumer today can be reassigned to another consumer almost immediately.”
FCC Chairman Ajit Pai’s statement about the commission’s creation of the reassigned number database illuminated this ongoing problem with an example in the health-care context: “The problem is a simple one. A doctor’s office is trying to reach a patient and calls what it thinks is the patient’s phone number. But the patient has changed numbers, and her old number has been reassigned to someone else. So someone with no relationship to the doctor’s office or the patient receives the call.”
“This isn’t good for anyone. The new holder of the number is annoyed by a call meant for someone else. The patient misses out on what could be an important call from her doctor’s office. And the doctor’s office is unable to reach the patient and could face a lawsuit under the [TCPA] for unknowingly placing the call in question.”
Specifically, the FCC proposed the following steps for the reassigned numbers database:
- Create a single, comprehensive reassigned number database enabling callers to verify whether a telephone number has been permanently disconnected—and is therefore eligible for reassignment—before calling that number;
- Establish a minimum “aging period” of 45 days before permanently disconnected telephone numbers can be reassigned;
- Require voice providers that receive North American Numbering Plan numbers and the Toll-Free Numbering Administrator to report monthly regarding permanently-disconnected numbers;
- Select an independent third-party administrator, using a competitive bidding process, to manage the reassigned numbers database; and
- Provide a “safe harbor” for callers relying on the database to learn if a number has been reassigned.
To protect consumer privacy and providers’ commercially sensitive information, the database will not contain subscriber information; instead it will only list the date of a specific number’s most recent permanent disconnection.
Database queries by callers will be met only with a “yes,” “no,” or “no data” response, indicating whether a number has been reassigned since the date provided by the caller. Callers will be required to certify they are using the database solely to determine whether a number has been permanently disconnected so that they can make lawful calls or send lawful texts. The cost of the database is to be covered by usage charges, which the FCC suggests will be under $0.01 per query, based on an anticipated 2.5 billion queries/year.
As for the new safe harbor, callers will bear the burden of demonstrating they appropriately relied upon the new database but received inaccurate information. The structure of the safe harbor suggests callers will still need to maintain comprehensive records, including the date the caller last contacted the customer at the number in question (or could be confident that the consumer could still be reached at that number), as well as records for all database queries made by the caller.
Setting aside the debate over whether the FCC’s rules provides sufficient protection to callers and consumers, it is important to note it will be at least a year before the database goes live. Although most carriers are immediately required to begin tracking and maintaining records regarding “permanent disconnects,” a third-party administrator for the project has not yet been chosen to oversee the database.
The FCC expected to start the bidding process “within the next twelve months”; however, as Commissioner Jessica Rosenworcel wrote in her accompanying statement, “[t]he database we establish today won’t be up and running anytime soon. There is no deadline for its implementation, no date by which we can ensure its operation, and no time by which we can ensure consumers relief.”
An added wrinkle delaying implementation is the ongoing federal government shutdown that began on Dec. 22, 2018, which impacts the operations of federal agencies like the FCC. As Rosenworcel tweeted on Jan. 4, 2018, “[t]he FCC has shut down due to a lapse in federal funding.” Commissioner Rosenworcel also expanded on the effects of the shutdown three days later—specifically noting its impact on the FCC’s efforts to curb so-called robocalls.
Hello It’s Me
The FCC’s December 2018 rules represent an important first step toward stemming the flood of reassigned number lawsuits under the TCPA. But questions regarding timing and the practicality remain, as well as uncertainty regarding good-faith defenses under the TCPA. Importantly, it remains unclear when the federal government, and the FCC, will reopen for business and when consumer-facing companies will be able to utilize these newly-created protections. In the interim, businesses can bolster their compliance efforts by engaging experienced counsel regarding best practices to implement proper policies, procedures, and ensure vendor oversight.
Jeffrey N. Rosenthal is a partner in Blank Rome’s Philadelphia office. He concentrates his complex corporate litigation practice on consumer and privacy class action defense, and has represented clients in TCPA matters up to and including before the U.S. Supreme Court. He can be reached at firstname.lastname@example.org.
Matthew P. Rubba is an associate in Blank Rome’s Philadelphia office. He concentrates his practice on complex commercial and corporate litigation in federal and state courts, and regularly advises clients in multiple industries on TCPA matters. He can be reached at email@example.com.
Justin M. Brandt is an associate in Blank Rome’s Los Angeles office. He regularly represents consumer-facing companies in TCPA litigation, and advises regarding TCPA compliance and best practices to minimize liability risk. He can reached at firstname.lastname@example.org.