New Connecticut Telemarketing Law Increases Risks to Advertisers and Other Callers

Connecticut's recently enacted telemarketing legislation allows for higher penalties for unsolicited text or phone messages than the Telephone Consumer Protection Act, creating significant new compliance risks for companies already struggling to ward off an onslaught of litigation under the federal law.

Senate Bill 209, which was signed May 29 by Connecticut Governor Dannel Malloy and goes into effect Oct. 1, expands the scope of laws regulating telemarketers to include text and media messages sent to a person's cellphone or electronic device. It bans such unsolicited messages at any time regardless of whether the person is on the "Do Not Call" registry unless the telemarketer has received prior express written consent to send the messages.

While many of the provisions in the new state law are consistent with the TCPA, the Connecticut statute notably departs from its federal counterpart by setting the maximum fine the state can assess for each violation at $20,000; more than 13 times greater than the top penalty available under the TCPA. The enhanced state law piles on top of telemarketers' already hefty obligations under the TCPA, which features uncapped statutory damages of between $500 and $1,500 per violation and unclear statutory language that has been the topic of many contentious court battles and still-unresolved petitions for clarification filed with the Federal Communications Commission.

These factors have prompted an explosion in nationwide class actions accusing companies like social networking service Path Inc. and the Los Angeles Clippers of making unsolicited calls or sending unwanted texts. Under the Connecticut law, enforcement actions to recover the attention-grabbing penalties are limited to the state's Department of Consumer Protection. But even though private plaintiffs can't recover large judgments, telemarketers operating campaigns that touch the state shouldn't brush off the possibility of being hit with substantial fines. And telemarketers still need to be wary of running afoul of consumers, since Connecticut's new law deems violations to be unfair and deceptive trade practices, which consumers could target under a different law. Although they might run into preemption issues, private plaintiffs could use that language to bring an action under the state's Unfair Trade Practices Act, which provides for civil penalties ranging from $5,000 for willful violations to $25,000 for violating a restraining order.

Moreover, if telemarketers overlook the subtle but significant differences between the state and federal law, they could end up being hit with a whopping $20,000 per violation under the state law. For example, callers should note the difference in the language on what types of communications are covered by each statute. While the TCPA statute addresses calls and messages, the Connecticut law encompasses calls and "text or media messages," leaving open the possibility that the state law may span a broader range of communications. The state law also prohibits telemarketers from contacting consumers between 9 p.m. and 9 a.m., meaning companies that have set up national marketing campaigns to begin at 8 a.m., in line with the TCPA, will need to adjust their settings or face Connecticut's unparalleled fines.

While Connecticut has so far been the only state to tighten its telemarketing law and impose harsher penalties, it is not hard to envision others following the state's lead, especially if its changes prove to be a financial and regulatory success.

Categories: Technology & Privacy