What are TCPA Violations: Causes and how to avoid them

Telemarketing is an effective tool for lead acquisition and nurturing, but it can prove harmful without proper management and adherence to crucial laws like the Telephone Consumer Protection Act (TCPA). The TCPA was enacted in 1991 to protect consumers from unsolicited and automated telemarketing calls and faxes. 

For businesses in the lead generation (and outbound calling texting) ecosystem, compliance with TCPA regulations is a critical aspect of operations. Violations can lead to dire consequences, making them a significant concern for businesses across the U.S. 

Understanding the intricacies of TCPA can help shield you from substantial fines, and litigation and safeguard your company’s reputation. This comprehensive guide will help you understand TCPA violations, how they arise, their potential impacts, and best practices to avoid them.

What Are TCPA Violations?

TCPA violations can occur when a company contacts individuals using automated telephone dialing systems (ATDS), prerecorded voice calls, SMS texts, or fax transmissions without prior express consent. Anura CEO Rich Kahn summed it up succinctly:

“A TCPA violation is the term for when a business is found to have broken the rules of TCPA in some way—such as by calling a number unsolicited and using automated marketing messages or using a robodialer to send thousands of pre-recorded messages.”

An important aspect of TCPA is its embodiment of U.S. consumer rights and privacy mandating that consent is necessary for telemarketing calls and text messages via automated systems. Additionally, the TCPA established a National  ‘Do Not Call’ DNC list program and allows consumers to revoke consent to be contacted on registered phone numbers and companies need to establish a process to check if numbers are on the national DNC before calling. 

But perhaps the most painful and expensive TCPA violation pathway is the regulations allowance for individuals (or a group/class) to initiate a legal claim (private right of action) of potential TCPA violations in calling practices and the company has the burden to prove if there was a violation. Depending on the merits of the case, the defending party has to decide if they will defend the claims (legal expenses with the potential of judgment against a company) or consider settling the claim for a lesser amount without legal expenses and risks.                  

The impact of FCC on TCPA violations

The governing body for TCPA enforcement, the Federal Communications Commission (FCC), continually updates TCPA rules in response to emerging communication technologies and consumer concerns. By enforcing the regulations and protecting consumer rights to privacy, the FCC shapes how businesses conduct telemarketing practices. In its most recent round of updates, the FCC has begun to crack down even further on the requirements of 1:1 consent and the revocation of consent.

As the FCC continues to reshape the industry, it is imperative to stay up-to-date with the latest rules and regulations to avoid any TCPA violations. These rules are not to be taken lightly and disregarding them can result in hefty fines, lawsuits, and irreparable brand damage.

Common TCPA violation causes for lead buyers and generators

For lead generators and buyers, TCPA violations can arise from a single misstep. Navigating the realm of lead generation and consumer calling or texting around TCPA can be a minefield of potential legal risk and analysis to identify the verifying root causes of these potential violations is instrumental in creating reliable compliant policies. Common TCPA violations caused by lead generators and lead buyers include:

Misinterpretation of consent

Lack of clarity on what constitutes ‘prior express written consent’ (PEWC) can lead to accidental violations. TCPA consent can be defined as the process of asking consumers for prior express written consent to be contacted to promote a product or service. Some companies fail to provide proper consent notice language to consumers or struggle to prove that consent was given by the individual.

Failure to scrub leads against Do-Not-Call lists

The National Do-Not-Call (DNC) registry is a black book for telemarketers. Not scrubbing your lead database against this list can result in contacting individuals who have explicitly declined to receive unsolicited marketing materials. There are also individual State DNC lists that need to be checked and company internal DNC lists that need to be operationalized. 

Inadequate record-keeping

A record-keeping system is critical to TCPA compliance. Companies include contact information in their marketing records or explore adding leads potentially interested in their products or services from external lead generators, which introduces the risk of acquiring inaccurate or outdated data. Without updated and clear documentation of consent, the source of the lead, and call histories, companies may face challenges in proving compliance with TCPA.

Call frequency and timing

The FCC’s TCPA regulations and the FTC’s Telemarketing Sales Rules (TSR) dictate the permissible frequency and timing of calls to consumers. Overcoming these restrictions requires robust scheduling and tracking mechanisms to prevent violations. There are also individual State allowances and restrictions on call times and frequency that also need to be consulted and operationalized.

Lack of internal compliance processes

Without stringent compliance controls in place, there is an increased risk of oversight or neglect regarding TCPA requirements. Sales and Marketing teams may inadvertently overlook compliance requirements leading to inadequate auditing mechanisms that can leave businesses vulnerable to TCPA violation claims. Without regular checks on sales, marketing practices, and data-handling procedures, it’s challenging to identify and rectify potential violations before they escalate into legal issues.

What is a possible consequence for violating the TCPA?

TCPA violation fines and penalties

The consequences for TCPA violations are substantial due to a strict liability statute that places companies legally responsible regardless of fault or intent, and uncapped damages. Furthermore, legal action can be taken by both the FCC and private consumers against violators with TCPA violations ranging from hefty fines to exorbitant class-action lawsuits. 

Fines can range from $500 to $1,500 per violation (per call), potentially leading to tens of millions of dollars for large-scale marketing campaigns. These numbers are not just scare tactics. In April 2023, a Florida court preliminarily approved a $40 million class-action settlement by a privately held real estate company over claims that it violated TCPA rules. 

TCPA violation penalties also extend beyond financials–businesses can risk irreparable reputation damage and the permanent loss of customer trust.

Treble damages

Penalties can be even more severe if a court determines that the defendant intentionally or consciously engaged in TCPA violations. In this instance, treble damages can be incurred.

Treble damages is a term that indicates a statute exists to award a prevailing plaintiff up to three times actual or compensatory damages. So if the initial damages were $500 per call, they’d be trebled to $1,500 per call.

True TCPA violations cost

The cost of TCPA violations can be devastating for businesses, especially when the infraction involves unsolicited communications, like TCPA violations text messages or calls made without proper consent. These penalties are steep—starting at $500 per violation and rising to $1,500 for a willful or knowing TCPA SMS violation. This may not seem alarming initially, but the numbers add up quickly. For example, a single marketing campaign that violates TCPA regulations by contacting 10,000 people could result in fines of $5 to $15 million.

TCPA lawsuits, whether individual or class action, can impose not only hefty fines but also damage a company’s brand and consume resources needed to fight legal battles. Many businesses, like Keller Williams, have been hit with multi-million-dollar settlements. Their case, involving unauthorized auto-dialing, settled for $40 million, a fraction of what they could have faced if every call resulted in a $500 to $1,500 penalty.

Given the strict liability nature of the TCPA, companies engaging in telemarketing must be diligent. Even unintentional violations carry significant costs, so it’s essential to ensure compliance with the TCPA and related regulations to avoid such financial devastation.

TCPA violation prevention and compliance strategies

Proactive avoidance and prevention are the best defenses to avoid possible TCPA violations. To mitigate risk, businesses should adopt rigorous compliance strategies and software solutions that keep consent and consumer protection at the forefront of all communication. A few best practices include: 

Implement exemplary lead verification practices

Obtaining and verifying consent for every lead should be step one for all companies. The use of unambiguous and concise language can further these efforts by helping consumers understand exactly what they are consenting to. Moreover, with the announcement of the lead generator loophole officially closing in January 2025, it is also a best practice to make sure all consent is obtained through logical and topical outreach methods related to the product or service your company sells. 

Regular scrubbing of Do-Not-Call lists

Regularly updating and diligently scrubbing your database against internal, state, and National Do-Not-Call lists is essential. Automated tools can help streamline this process and help you avoid making contact with any person listed in the registry.

Develop and enforce strict policies

Developing policies that emphasize TCPA regulations and enforce compliance through staff training and performance metrics can maintain a culture of conformity. Consider developing an internal TCPA checklist that can be referenced any time a question of compliance arises. 

Keep meticulous records

Robust record-keeping policies can help companies store documentation of consent and demonstrate a commitment to transparency. Automated tracking systems can assist with this and ensure records are consistently maintained and accessible.

Monitor and limit call frequency

Monitor call frequency and timing to prevent excess or improper contact. By implementing internal Automatic Telephone Dialing System (ATDS) parameters, you can help your company avoid reaching out to prospects outside of the allowed hours or more frequently than the TCPA allows.

Legal Consultation

Seeking legal counsel from experts well-versed in TCPA can offer insights into the nuances of the law and provide tailored approaches to compliance for your business. Legal counsel can help clarify grey areas that will undoubtedly exist and can help keep your company on the best pathway to TCPA compliance.

The TrustedForm compliance solution

Although maneuvering through the updated regulatory environment may appear intimidating, innovative measures already exist to help facilitate continued TCPA adherence. With a twenty-year track record in consent-based marketing, we assist thousands of companies in certifying millions of leads annually with our premier record of consent, transparency, and compliance documentation solution, TrustedForm.

ActiveProspect’s TrustedForm is a leading compliance record of consent transparency solution for businesses that want to maintain the highest standard for independent proof of consent. TrustedForm maintains this standard with four key products: Certify, Retain, Insights, and Verify, all tailored to cater to the needs of lead buyers, lead sellers, and publishers alike.

TrustedForm can offer an effective way to mitigate compliance risks by providing real-time lead certification, documented consent records, and helping foster a commitment to transparency. By prioritizing compliance and leveraging advanced tools, businesses can help safeguard themselves against costly legal consequences and maintain trust with consumers.

Final thoughts

TCPA violations are a significant concern for all businesses involved in lead generation, sales, or marketing outreach by phone or text messaging. Understanding the causes and consequences of these violations is crucial for maintaining lawful, respectful consumer outreach and communications.

By adopting comprehensive compliance strategies and leveraging technology like TrustedForm, businesses can operate confidently within TCPA guidelines, reduce legal risks, and preserve consumer trust. Remember, when it comes to TCPA, an ounce of prevention is worth a pound of cure.

Discover the highest standard for independent proof of consent to contact; discover TrustedForm.

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