FCC Proposes Rules To Block Illegal Text Messages and Close the “Lead Generator Loophole”

On February 23, 2023, the Federal Communications Commission (FCC) issued a Further Notice of Proposed Rulemaking (FNPRM) seeking public comment on proposed rules targeting unlawful text messages. If the proposed rules are adopted, they will comprise the FCC’s “first action to protect consumers from unwanted and illegal texts.”

If adopted, the proposed rules, together with earlier proposed rules that have already undergone a comment and reply period, would extend the existing Do-Not-Call Registry to cover text messages, and would require wireless service providers to:

  • Block text messages from numbers on a “Do Not Originate” list;
  • Maintain a single point of contact for texters to report erroneously blocked texts; and
  • Investigate and potentially block texts from a sender once on notice from the FCC that the sender is           transmitting suspected illegal texts.

These requirements mirror FCC requirements in place for gateway providers regarding voice calls. In addition, the proposed rules would:

  • Close the “lead generator loophole” by “ban[ning] the practice of obtaining a single consumer consent         as grounds for delivering calls and text messages from multiple marketers on subjects beyond the               scope of the original consent.”

According to the FCC, the “lead generator loophole” allows the harvesting and sharing of contact information from consumers who give the consent required by the Telephone Consumer Protection Act (TCPA), but are allegedly misled into doing so. Generating leads is not prohibited. As described in the FNPRM, a lead generator will typically gather customer contact data via a website that offers to send desirable information, conditioned on the requester consenting to receive communications. But the FNPRM points to reports of lead generators obtaining consent, in one single click, to receive texts and calls from hundreds or thousands of different companies listed at a single hyperlink. Conduct of this sort is what the FCC intends to ban.

To close the “loophole,” the FCC proposes narrowing its existing definition of “prior express written consent,” 47 CFR § 64.1200(f)(9), to state that a consumer can only validly give consent to communications from “multiple entities” at once if:

  • “[T]he entire list of entities” is “clearly and conspicuously displayed to the consumer at the time consent       is requested” which means, at a minimum, “displayed on the same webpage where the consumer gives       consent;” and
  • The entities are “logically and topically associated.”

As the proposal stands, the terms “logically and topically associated” are undefined, and may create uncertainty. For instance, the proposed rules apparently do not consider consumers who want communications from affiliated companies offering an array of products and services under the same brand name, but that may not be deemed “logically and topically associated” with each other. Under the proposed rule change, senders of texts and calls would have to somehow ensure, if a potential customer conveys a single consent for communications from “multiple” (two or more) companies, that those companies are “logically and topically associated.”

The proposed rule will tentatively be considered at the FCC’s March 16, 2023 open meeting.  Comments will be due 30 days after the FNPRM’s publication in the Federal Register.