If you send out group fax notifications for your store promotions, this one is a victory for small businesses everywhere. The Consumer and Governmental Affairs Bureau of the Federal Communications Commission (FCC) has ruled faxes sent to “online fax services” are not faxes to “telephone fax machines,” a major victory declaring online fax services outside the scope of statutory provisions within the Telephone Consumer Protection Act of 1991 (TCPA) and the Junk Fax Protection Act of 2005.
The ruling distinguishes online fax services as “a cloud-based service consisting of a fax server or similar device” that allows users to access “faxes” the same way as email and asserts that online faxes do not result in the harm that Congress sought to avoid in the TCPA. In its petition for this highly anticipated declaratory ruling, Amerifactors Financial Group, LLC is represented by RumbergerKirk attorneys Douglas B. Brown and Samantha Duke, along with Steven A. Augustino of Kelley Drye.
What Exactly Counts as a Violation
Samantha Duke breaks down the TCPA and how the ruling is a victory for small businesses everywhere. “The TCPA applies to both telephone calls and faxes, but this recent order from the FCC only affects the fax provision of the TCPA. The fax provision makes it a violation to send unsolicited messages to fax machines. If a retailer is sending fax messages to other businesses or consumers that did not consent to receiving them, the retailer can be in violation of the TCPA.”
The TCPA also prohibits the use of automatic telephone dialing system to contact consumers on their mobile phones without their consent. While the traditional fax machine has faded out of today’s business communications, online fax services provide secure communications that are critical to providing consumers with secure information about their finances, health and other important matters.
Saving Small Businesses Millions of Dollars
But since the TCPA’s original provision was not well defined and came into play well before all the marketing tactics for retailers today, many small businesses were being sued based on marketing being sent via text messages and robo calls, according to Duke. Each violation fee is $500, and that’s per fax. If a retailer hires a third party marketing company to do a mass advertising campaign, and that campaign is sent to thousands of phones, there’s no defense that the retailer hired another party to handle the marketing and the violation fees can be $500 x thousands.
This ruling now concludes “in short, online fax services differ in critical ways from the traditional faxes sent to telephone facsimile machines Congress addressed in the TCPA” and refutes commenters suggesting “other inconveniences necessitate that all computers and devices being sent faxes be deemed telephone facsimile machines.” In doing so, the FCC further underscores the “more general harms that such commenters point to — such as time spent monitoring unwanted faxes stored by online fax services — are more general harms that go beyond the specific harms Congress identified in enacting the TCPA.”
“One of the issues with the fax provision is that most consumers don’t have a fax machine in their home, but when we get to the telephone provisions, one of the justifications of that was to protect consumers’ privacy because they don’t like being called in their home from someone they didn’t consent to,” Duke said. “This new FCC ruling is great because the TCPA has been a very difficult statue for businesses and retailers — potentially imposing millions of dollars of liability. The determination for how the fax was received will now be an individual determination instead of an automatic class action.