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Focus on Regulation

FCC Imposes $1.84 Million TCPA Penalty for Fax Advertisements

The Federal Communications Commission (“FCC”) recently imposed a $1.84 million penalty for sending unsolicited fax advertisements.  According to the agency’s forfeiture order, Scott Malcolm, DSM Supply, LLC and Somaticare, LLC (the “DSM Parties”) sent 115 unsolicited fax advertisements to 26 consumers, primarily health care practitioners, in violation of the FCC’s Telephone Consumer Protection Act (“TCPA”) fax rules.

In imposing the penalty, the FCC said that the “intrusion, expense, and disruption of business activities (including patient care) that resulted from these junk faxes highlight the harms that Congress sought to prevent by prohibiting unsolicited fax advertisements.”

Section 64.1200 of the FCC’s rules prohibits the delivering of advertisements to telephone facsimile machines without “prior express invitation or permission” or without meeting the requirements for advertisements faxed under an “established business relationship.”  And in February 2014, the FCC issued a Notice of Apparently Liability for Forfeiture against the DSM Parties for doing just that.  According to the FCC, the DSM Parties waited nearly seven months after the response deadline to file a response to that Notice.  The DSM Parties argued in the response that the ads were not unsolicited and that they had an established business relationship with the recipients, but did not provide any documentary support for these claims.

Additionally, while three of the fax recipients confirmed that they had purchased something from the DSM Parties, the fax ads in question did not include required opt-out notices, in violation of the rules.

The FCC also denied the DSM Parties’ request for clarification and retroactive waiver of the rules, in large part because the DSM Parties never reached out to the FCC after receiving citations for sending unsolicited fax ads in 2011.  The FCC therefore rejected any claims of “confusion” as to the law and found that the DSM Parties were “operating under no uncertainty as to the applicability of the opt-out requirements on fax advertisements during the time period covered by this forfeiture.”

How Can We Help?

Our TCPA Working Group brings together more than 25 attorneys in our litigation, communications, commercial, and privacy practice areas.  We provide regular TCPA counseling to clients from a broad range of industries, including technology, healthcare, communications, transportation, and financial services.  We have secured dismissals and nominal settlements for clients in TCPA actions and have worked with the FCC to clarify rules addressing a number of key TCPA issues.