Telephone Consumer Protection Act

Telephone Consumer Protection Act (“TCPA”)
Kathy Mehringer
Broker of Record Compass

Introduction: Did you know that  E&O insurance is not likely to cover TCPA violations? In that case, the agent would be responsible for all associated costs if a lawsuit is threatened or filed.  This document is intended to provide a summary of key points regarding the Telephone Consumer Protection Act (TCPA). It outlines the Act's purpose, scope, requirements, restrictions, enforcement, and potential penalties. Please consult with your Broker of Record or Legal Counsel for specific information on how TCPA  violations may impact you.

Purpose and Scope:

• The Telephone Consumer Protection Act (“TCPA”), enacted in 1991, regulates and restricts the use of automated technology to initiate outbound telephone communications and marketing solicitations to individuals whose numbers are on any local or national Do Not Call (“DNC”) registries without advanced consent.

• It applies to voice calls, voice messages, SMS (text) messages, and facsimile transmissions.

• It addresses the use of artificial voices/pre-recorded messages or auto dialers, as well as calls or texts initiated by an individual for marketing purposes to a number on a DNC list.

• There is a four-year statute of limitations for TCPA violations.

• Please see link to the  National Do Not Call Registry https://telemarketing.donotcall.gov/ 

• Brokerage firms should maintain a record/registry of all consumer requests  NOT to be contacted.

Key Requirements and Restrictions:

• Prior Express Written Consent: The TCPA generally requires prior express written consent to contact consumers using automated technology or to contact someone on a DNC registry. Simply collecting phone numbers may not be sufficient proof of consent.

  • A phone number listed on a “For Sale By Owner” listing is not sufficient to confer consent to be contacted for marketing purposes. 

  • The same logic applies to MLS "Entry Only" listings

• Do Not Call (DNC) Registry: While there's a DNC registry for residential telephone numbers, it doesn't apply if you have prior express written consent.  It is a violation of the TCPA to contact a consumer for marketing purposes whose number appears on a DNC registry, regardless if you use automated technology or not. 

• Business Transaction Exception: If you've conducted a business transaction or service, you have an 18-month window to contact the consumer unless they tell you not to.

• Withdrawal of Consent: If a consumer withdraws their consent or requests that you not call again, you must comply and document this request, log the request in the Brokerage internal registry. 

• Open House Sign-In Registers: Include language to your sign-in sheets that states: “by providing my contact information, I agree to be contacted for marketing purposes about this property or other listing/purchase opportunities.” 

Enforcement and Penalties:

• Statute of Limitations: There's a four-year statute of limitations for TCPA violations.

• Statutory Damages: Statutory damages are $500.00 per violation.

• Class Action Lawsuits: One person can file a class action lawsuit for TCPA violations, which can result in millions of dollars in legal fees and settlements.

• Multiple Violations: There may be as many as three violations for each call.

• Significant Settlements: There have been substantial settlements for TCPA violations, such as the DeShay v. Keller Williams Realty, Inc. $40 million settlement in 2023.

• Breaking News: The parent company of Coldwell Banker, Realogy Holdings Corp., has agreed to a $20 million class action lawsuit settlement to resolve claims it violated the federal Telephone Consumer Protection Act (TCPA) with unsolicited phone calls.

Final Thoughts: Adherence to TCPA regulations is crucial for avoiding significant financial penalties, legal battles, and reputational damage. E&O insurance is not likely to cover TCPA violations. In that case, the agent would be responsible for costs, in the event a lawsuit is threatened or filed, they have contacted someone on the DNC registry or fail to honor "stop" requests. Purchasing leads from third parties without checking them against the DNC lists is not advisable.

Disclaimer: This article is designed to provide accurate and authoritative information regarding the subject matter covered. It is offered with the understanding that the author and publisher are not engaged in rendering professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought.  Articles which appear in this publication are an informational service to members.  Their contents are the opinions of the authors alone and do not necessarily represent those of SDAR.