Unsolicited Fax Advertisement Bill Becomes Law

After a two-and-a-half year effort, a broad-based business coalition has brought to conclusion the fight to reverse the Federal Communications Commission’s ill-conceived regulation which would have made it illegal for a business or other organizations to send an unsolicited commercial fax to even its long-time customers and vendors.

The Commission’s 2003 regulations would have removed the long-standing “established business relationship” (EBR) exception to the general ban on sending unsolicited advertisements via fax.

Unsolicited Fax Advertisement Bill Becomes Law

The NAW-led Fax Ban Coalition, which grew to over 600 members since it was formed in 2003, worked with allies in the U.S. House of Representatives and Senate to craft and pass legislation to reverse the proposed regulations and maintain by statute the EBR exception which had been in effect since 1992.

The Senate and House both passed S. 714, the Junk Fax Prevention Act of 2005, in late June, and on July 9, President Bush signed the bill into law. A copy of the Act is now posted at www.access.gpo.gov/nara/publaw/109publ.html.

Analysis of the Provisions of the New Law
The Act amends the Telephone Consumer Protection Act of 1991 (TCPA) and specifically maintains by statute an exception to the general prohibition on sending an unsolicited advertisement via fax, if the fax is sent to a recipient with whom the sender has an “established business relationship”, and certain other conditions are met. The Act makes clear that the establishment of an EBR does not have to be evidenced in writing, nor does it require the fax recipient’s signature.

An unsolicited advertisement is any material advertising the commercial availability or quality of any property, goods or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise. Effective July 9, 2005, the TCPA, as amended, prohibits the use of a fax machine, computer or similar device to send an unsolicited advertisement to another fax, unless:

  1. The unsolicited advertisement is from a sender with an established business relationship with the recipient (the TCPA, as amended, defines an “established business relationship” as a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential or business subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party);
  2. The sender obtained the number of the fax machine through voluntary communication of such number from the recipient within the context of an EBR, or the recipient has made its fax number available for public distribution in a directory, advertisement or an Internet site;
  3. The unsolicited advertisement contains an opt-out notice that meets certain requirements; and
  4. The sender has not been requested to stop sending unsolicited advertisements to such fax machine.

Placement and Content of the Opt-Out Notice
The TCPA does not prescribe particular language or methods to comply with the opt-out notice requirement, although the law does require the Federal Communications Commission (FCC) to issue regulations to implement P.L. 109-21 by April 2006. In general, the law requires that the notice:

  • Be clearly and conspicuously displayed on the first page of the unsolicited advertisement;
  • Inform the recipient of his or her ability to opt-out of future unsolicited advertisements to any fax machine(s) and that the request must be complied with by the sender in the shortest reasonable time;
  • Explain the proper requirements for a valid opt-out request; and
  • Include a domestic telephone and fax number that will receive an opt-out request, and describe a “cost-free mechanism” for the recipient to send such a request to the sender.

The telephone and fax numbers and the cost-free mechanism provided to a recipient must permit an individual or business to make an opt-out request at any time (i.e., 24/7). Generally, to be valid, the opt-out request needs to: 1) identify the telephone number(s) of the fax machine(s) subject to the request; 2) be made to the sender’s telephone or fax number or by any other method determined by the FCC; and 3) be made by a person who has not subsequently provided express invitation or permission, in writing or otherwise, to receive unsolicited fax advertisements.

State Junk Fax Laws Still Apply
The TCPA and the FCC regulations do not preempt any state law that imposes more restrictive intrastate requirements or regulations on, or prohibits the use of, a fax machine to send unsolicited fax advertisements. To further complicate matters, it is unclear whether a state law applies only to an intrastate fax (fax originated and received in same state), or whether it applies to interstate fax transmissions into the state as well. About 34 states have enacted some form of junk fax law.

Example of TCPA Opt-Out Notice
Unfortunately, it could be nine months before the FCC provides further guidance, or safe-harbor language, to businesses and associations on how to meet the TCPA’s opt-out notice requirements. At the present time, on advice of counsel, NAW and its affiliated organizations will attempt to comply with the TCPA opt-out notice mandate by including the following notice on any future faxes sent that are advertisements: If you wish to discontinue receiving future faxed advertisements from this sender, send your opt-out request to us by e-mail at [email address], by fax at [fax #], or by telephone at [telephone #]. Specify the telephone number(s) of the fax machine(s) covered by your request. As required by law, we will comply within the shortest reasonable time.

Caution: A business or other organization needs to consult its legal advisors concerning the TCPA, including the new opt-out notice requirements, to be assured it meets the needs of your operations and you are in compliance with its provisions. Of equal importance is your organization’s compliance with state laws applicable to unsolicited fax advertisements. By providing the above example notice, which is subject to ongoing review and modification if warranted, NAW is not representing or guaranteeing to the reader that use of the above notice on an unsolicited faxed advertisement will immunize your organization from any federal or state law claims.

This article is a Legal Avisory from the National Association of Wholesaler-Distributors. More information from the National Association of Wholesaler-Distributors can be found at www.naw.org. GAWDA is a member of NAW to benefit its members and support NAW’s lobbying efforts on behalf of distribution.

Gases and Welding Distributors Association