On December 30, 2019, the TRACED (Telephone Robocall Abuse Criminal Enforcement and Deterrence) Act became law. It contains a series of requirements, primarily on telecommunication service providers, but also several that apply more broadly, including a mandate that within one year, the Federal Communications Commission (“FCC”) reevaluate certain exemptions it had previously granted regarding the consent requirements for prerecorded calls under the Telephone Consumer Protection Act (“TCPA”). As a result of this mandate, on December 30, 2020, the FCC released a Report and Order (“Order”) that imposed certain new restrictions on nonmarketing prerecorded calls to residential lines.

The effective date of these changes is delayed for six months (which will commence only after the Office of Management and Budget has approved the rule changes), so as a practical matter these changes are not likely to become effective for several more months. That said, dealers are encouraged to implement any necessary process changes now to accommodate these updated rules.

Previously, prerecorded calls to residential lines that were either noncommercial in nature or did not contain marketing (e.g., a vehicle was ready for pick up in the service department, appointment reminders, etc.) were exempt from TCPA consent requirements. In relevant part, the Order changes these exemptions by:

  1. requiring consent to send more than three such prerecorded calls per 30-day period to a residential line, and
  2. requiring callers to permit call recipients to opt out of such calls through an automated opt out mechanism.

The Order does not change existing exemptions for calls to wireless numbers, finding that these exemptions already satisfy the TRACED Act’s requirements. Nevertheless, the order codifies these exemptions, which previously were set forth only in FCC declaratory rulings.

As a practical matter, dealers should consider taking steps (if they do not already) to obtain consent from the consumer for such calls. The Order does not define what “consent” means in this context. Because these are nonmarketing calls by definition, it stands to reason that consent means “prior express consent,” as that term has been construed by the FCC. And while written consent is not required, dealers should consider obtaining it, as it makes proof of such consent much more straightforward if needed. Dealers could obtain such consent on the R.O. or other document when a customer brings their vehicle in for service, for example.

Again, dealers should take steps now to determine whether they send such prerecorded messages, and if so, to put processes in place to ensure that either consent is provided, or that they do not exceed the 30-day call limit is not exceeded, and that such calls contain the required opt out mechanism. Questions can be directed to NADA Regulatory Affairs at [email protected].

DISCLAIMER: This is not legal advice, dealers should consult with their attorney about compliance with all federal or state telemarketing duties or any other related legal or regulatory obligations.