TCPA Violations Could Cost Your Business Millions via Searchbug
Mar
16

TCPA Violations Could Cost Your Business Millions

No, that’s not an exaggeration. TCPA violations can easily rack up millions in fines and litigation fees.

In 2019, the average cost of a TCPA settlement was $6,600,000. And, TCPA class action lawsuits increased by 21 percent in 2018.

Class action lawsuits can be expensive enough to bankrupt small businesses. In Illinois, the CEO of a medical supply company was ruled to be personally liable for $7.8 million in TCPA violation fines.

Here’s what TCPA violations look like, by the numbers:

TCPA violations of settlements and costs

  • A Place for Mom, Inc., a senior housing company, settled for $6 million dollars in a class-action lawsuit for making automated calls to over 56,000 people.
  • Rack Room Shoes, Inc. settled a TCPA lawsuit for $26 million dollars for sending automated text messages.
  • Grieco Ford of Fort Lauderdale, a Florida car dealership, settled for $4.8 million in a class-action lawsuit for unsolicited robocalls and text messages.
  • Compass Bank settled for $1.15 million dollars in a TCPA lawsuit for unsolicited survey calls made with an autodialer.
  • HSBC Bank paid out $2.4 million dollars in a TCPA violation settlement which included $600,000 in attorney’s fees and $51,071.92 in litigation costs.
  • Dish Network paid $280 million in the largest-ever settlement for Do-Not-Call registry violations.
  • Home Depot settled for $4.35 million dollars for automated phone calls to phone numbers on a phone list they purchased from Atlantic Water and Air.
  • Chase Bank paid $34 million to close a class action lawsuit for placing unwanted calls to customer cell phone numbers.
  • T-Mobile agreed to pay $5 million to end a class-action lawsuit over robocalls.
  • The LA Clippers were forced to pay $5 million in a class-action lawsuit over text messages to fans during games. The settlement included up to two home game tickets to each class member in the lawsuit.
  • QC Holdings paid $1.5 million dollars to settle a TCPA lawsuit over prerecorded messages sent to people’s cell phones to collect an unknown debt.

The list goes on. But, you can see the trend here: MILLIONS. TCPA violations regularly cost businesses millions of dollars. And, even if the settlement is less than a million, the legal fees themselves are quite steep.

A good lawyer is one solution. But, ultimately, it’s best to avoid TCPA litigation altogether.

How the TCPA works

The TCPA was originally written as a law that would be enforced in small claims court. It was intended to be a way for consumers to get direct compensation for the abuse of their phone numbers.

That’s why the fine is enforced on a per violation basis. And, the penalty is set at $500 to $1500 per violation.

Without getting too deep into the legal lingo weeds, this means two things:

  1. Class action lawsuits—where consumers sue companies as a group—are incredibly expensive. The judge determines the fine. Then, the fine gets multiplied by the number of class members in the class-action lawsuit. Attorney and litigation fees are also often added to the settlement.
  2. Consumers initiate the most TCPA violation lawsuits. It’s actually very easy for consumers to bring TCPA lawsuits against companies.

It’s so easy, in fact, that there’s one person who has filed at least 45 TCPA lawsuits through a lawsuit generation scheme. The consumer would place an order and stop the credit card payment. Then file a TCPA lawsuit when the company called to resolve the payment issue.

So, consumers care about how you use their phone numbers. And, they will report you if they believe you’re abusing their telephone numbers.

How to avoid TCPA lawsuits

The TCPA has been updated a few times. And, the definition of what is considered an “autodialer” is still a bit murky.

However, if you follow a few TCPA compliance best practices, you will most likely be safe from TCPA violations and lawsuits.

TCPA compliance best practices

Get written consent before making marketing calls or sending marketing text messages.

This is what you need to get adequate express written consent:

  • A written agreement.
  • The agreement must be signed by the person receiving the call or text.
  • The written agreement must specifically authorize you to call the telephone number that you will be contacting.
  • The notification that the person receiving the calls or text is consenting to receive telemarketing materials from an automatic telephone dialing system or an artificial or prerecorded voice must be a “clear and conspicuous disclosure.”
  • The agreement must clearly state that the person is not required to sign as a condition of purchasing any property, goods, or services.

Avoid anything that could be considered an autodialer or a robocall.

There are nuances. But, it’s best to follow these best practices for making marketing calls and sending texts:

  • Manually dial phone numbers and type out marketing texts. If you need to use automation equipment (such as mass text messages from a shortcode), consult with an attorney or telemarketing consultant to ensure that your equipment and process is compliant with the TCPA.
  • Always get consent before calling or texting anyone.
  • Never call a phone number on the Do-Not-Call list. Use the Searchbug bulk phone validator to identify phone numbers that are on the Do-Not-Call Registry.
  • Always honor do-not-call requests.

If you run your telemarketing programs this way, you should be on the right side of the law. And, that could save your business from bankruptcy.

What to do now

If you’re concerned about TCPA compliance, adding phone number validation to your technology stack is the best place to start. A phone validator enables you to avoid telephone numbers that are on the Do-Not-Call list and separate cell phone numbers from landlines.

Both of these are essential functions for determining what you can and can’t do with a customer’s phone number.

If you need to validate phone lists to maintain TCPA compliance, use the Searchbug bulk phone validator.

If you’d like to automate the process of validating phone numbers through data integration, use the Searchbug phone validator API. It’s a free phone validator API. All you pay for is the phone lookup data itself.



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