Junk Fax Prevention Act 2005

Here's what you need to know about sending marketing related faxes

The Junk Fax Prevention Act of 2005 was enacted on June 28, 2005 to enable organizations to continue to send faxes to recipients with whom they have an existing business relationship, provided that the sender offers the recipient an opportunity to opt-out of receiving future commercial faxes. This Act will took effect on the date signed by President Bush.

Although unsolicited commercial faxes have long been prohibited by the Telephone Consumer Protection Act (TCPA), many businesses rely on faxes to communicate with existing customers. Senders understood these faxes to be permissible because the consent to the communication was implicit in the business relationship that existed with the recipient.

In July 2003, the Federal Communications Commission (FCC) revised the TCPA regulations and required fax senders to document that they had consent to send faxes by obtaining signed, written authorizations from all prospective recipients. The authorizations had to include the fax numbers to which faxes could be sent. The FCC required these authorizations to be obtained for all faxes, even for faxes sent to recipients with whom the senders had existing business relationships. Due to concerns about the costs and difficulty of obtaining authorizations from customers, the FCC stayed implementation of these regulations to allow companies to continue to send faxes to existing customers while obtaining the necessary consents.

The Junk Fax Prevention Act (JFPA) overrides the FCC's regulations and permits businesses to obtain consent to send faxes in writing or by other means. It specifically provides that consent can be inferred from an existing business relationship (EBR), and it permits sending faxes to recipients based on an EBR, as long as the sender offers an opt-out in accordance with the Act.

Established Business Relationships

For purposes of the JFPA, "existing business relationship" has the same definition as it does in the FCC's Do Not Call Rule. Specifically, an existing business relationship exists if the fax recipient has entered into a purchase or services transaction with the sender within the past eighteen (18) months or if the recipient has made an inquiry or application with the sender during the past three (3) months.

The JFPA authorizes the FCC to examine these time periods in the future, and to make rules to revise the time periods that establish the EBR. In particular, three months after the effective date of the JFPA, the FCC can revise the EBR time periods after considering various factors, including complaints received about faxes and the costs associated with demonstrating that an EBR exists.

The JFPA also imposes requirements on how fax numbers can be obtained. After the effective date, senders wishing to rely on the EBR may collect fax numbers from new customers only through (1) the voluntary communication of the fax number from the customer within the context of the business relationship, or (2) from a directory or internet site where recipients have voluntarily agreed to make fax numbers available for public distribution. EBR customer fax numbers possessed prior to the effective date are not subject to this requirement.

Opt-Out Notices and Requirements

The JFPA adds a new requirement to the TCPA that senders of commercial faxes must include a clear and conspicuous notice on the fax cover page informing recipients that they can opt-out of receiving future faxes from the sender. The opt-out notice must include:

· the sender's domestic telephone number,

· the sender's domestic facsimile number, and

· a no-cost mechanism for the recipient to opt-out of receiving further faxes from the sender (presumably such as a toll-free number or email address).

Recipients must be able to opt-out of receiving faxes using these numbers and mechanisms at all times and on all days of the week. Recipients are required to provide the sender the fax number(s) to which faxes may no longer be sent.

Within the next few months, the FCC will promulgate regulations regarding the opt-out notices and processing of opt-outs. In particular, the FCC will establish the time period within which opt-out requests must be processed . The FCC may also require additional or specific opt-out mechanisms or statements in the notice. For example, the FCC may require the no-cost opt-out mechanism to be a toll-free fax number. Additionally, the FCC may vary the rules if needed to assist small businesses and/or non-profit organizations with compliance.

Additional Considerations

The JFPA provides for various FCC and Government Accounting Office reports on junk fax complaints and enforcement.

The JPFA does not alter the TCPA's enforcement provisions. The TCPA may be enforced by the FCC or state authorities. It also includes a private right of action, and provides for statutory damages of up to $1500 per willful violation. Enforcement of the TCPA's fax provision has historically been strong, and private lawsuits to recover damages for violations are common.

The JPFA does not include any provisions that specifically preempt state do-not-fax rules. The FCC is currently considering to what extent (if any) the TCPA should preempt more restrictive state do-not-call rules. The FCC may decide to preempt inconsistent state laws, and, if so, that preemption should extend to the fax rules as well. However, until this decision is made, companies should continue to use caution when sending faxes to recipients in those states with more restrictive laws.

Conclusion

The JFPA provides significant comfort for the continued sending of faxes to those entities with whom you have an existing business relationship. The FCC rule-making processes should be monitored carefully so that evolving specific requirements for EBR faxes can be understood and implemented.