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Unsolicited Faxing Can Be Costly
By
Mike Wilson, J.D.
The practice of
advertising goods or services through unsolicited faxes has been illegal since
1991, but a multi-million dollar industry in mass faxing nonetheless continued
to send unsolicited faxes on behalf of its clients.
In 1999, the Federal Communications Commission (FCC) announced it had
received nearly 1,300 complaints from consumers about unsolicited faxes. As a result, the FCC declared that it would step-up
enforcement of the law and educate consumers about their rights under the law.
The efforts appear to be bearing fruit.
During recent years, the FCC, state attorney generals, and consumer
groups have initiated litigation against companies engaged in mass faxing of
unsolicited advertising, resulting in some large verdicts and settlements.
The FCC imposed a $1.1 million
fine against 21st Century Fax for willful and repeated violations
of the law. In 1999, the Dallas
Cowboys had to pay $1.73 million to settle a class action suit over violation
of the law. And a Hooters
restaurant in Augusta, Georgia had nearly $12 million in damages assessed
against it. This should send a
message to companies considering advertising through unsolicited faxes.
The Telephone
Consumer Protection Act (TCPA), 47 U.S.C. section 277,
prohibits
unsolicited fax advertisements.
The federal law also applies to automated telephone dialing systems and
prerecorded voice messages. Damages
are a minimum of $500 per fax and if the violation is willful, the damages can
be up to $1,500 per fax. A court
has held that a company cannot avoid the effect of the law by initiating the
fax from outside the United States. Most
Federal Circuit Courts have ruled that private lawsuits can only be brought in
state court and subject to the consent of the state.
However, state attorney generals can enforce the law in federal court.
The Federal Communications Commission also can bring actions for
enforcement. Remedies can include both monetary damages and injunctions
against future unsolicited faxes. Not
only can the fax sender be cited, but the entity transmitting the fax can be
cited as well if the transmitter has "a high degree of involvement or actual
notice of an illegal use and has failed to take steps to prevent such
transmissions."
Not all unsolicited faxes are
prohibited by the law. The key is
whether the unsolicited fax constitutes an "unsolicited advertisement."
There are two aspects to what constitutes an unsolicited advertisement.
First, the fax must have been sent without the express prior invitation
or consent of the recipient. The
FCC has taken the position that an established business relationship
constitutes prior consent. To be
safe, document consent if it was given. Second,
the fax must be "material advertising the commercial availability or quality
of any property, goods, or services." Would
a company press release qualify? If
you are considering engaging in a mass unsolicited faxing campaign but think
it doesn't constitute an advertisement, you may want to get an opinion from
your attorney before proceeding.
In addition to the Federal law,
many states have their own laws against unsolicited fax advertisements with
comparable, and in some cases greater, penalties, including the right to court
costs and attorney fees. So far,
these laws have survived challenges on the First Amendment. Increased consumer awareness appears to be resulting in more
complaints. The FCC recently
reported that they had received nearly 6,000 complaints of violations of the
TCPA (not all of which were for unsolicited faxes) during the first quarter of
2002.
Mike
Wilson is an attorney and author. He
teaches at Sullivan University in Lexington, Kentucky.
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