FCC Closes TCPA Lead Generator Loophole; Requires One-to-One Consent

6 minute read | December.20.2023

On December 13, 2023, the Federal Communications Commission (“FCC”) adopted new rules under the Telephone Consumer Protection Act (“TCPA”) that require comparison shopping websites, lead generators, and other companies obtaining consent on behalf of third parties to obtain a consumer’s prior express written consent to receive robocalls and robotexts one marketing partner at a time. Through this rule, the FCC seeks to end the practice of relying on a single consent from the consumer to apply to multiple marketing partners at once. The FCC’s announcement can be found here, and the Report and Order providing an in‑depth justification for the rules is available here.

Here’s a look at what the FCC is trying to accomplish, what the new rules require and what this means for your business:

1. What Is the FCC Trying to Accomplish?

The TCPA generally requires prior express written consent for marketing calls and texts (i) containing an artificial or prerecorded voice, or (ii) sent using an “automatic telephone dialing system.” While the TCPA defines “prior express written consent” with precision, it is silent on the extent to which consent can be obtained for more than one caller at the same time.

As a result, it is relatively common practice for comparison shopping websites, lead generators and other similar companies to ask consumers to provide a single prior express written consent to agree to receive robocalls or robotexts from any or all of the company’s relevant marketing partners, some of whom may in turn provide those “consents” through a daisy-chain of downstream sellers. While the FCC acknowledges that these types of comparison shopping or lead generation services provide a real benefit to consumers, they also raised concern that the one-to-many consent practices have led consumers to receive robocalls and robotexts from tens, or hundreds, of marketing partners on the basis of a single consent—numbers that most reasonable consumers would not expect to receive.

Due to this concern and perceived ongoing “abuse” of the system, the FCC determined that this “lead generator loophole” must be closed by amending the definition of prior express written consent to require that consent “clearly and conspicuously authorize[] no more than one identifier seller to deliver or cause to be delivered to the person called or texted advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.”

2. What Do the New “Lead Generator” Rules Require?

  • One-to-One Consent. Comparison shopping websites, lead generators, and similar companies must obtain a consumer’s prior express written consent separately for each marketing partner; a single consent to enable multiple marketing partners to send robocalls or robotexts is no longer valid.
  • Clear and Conspicuous Disclosure. The one-to-one consent must be in response to a clear and conspicuous disclosure that the consumer will receive robotexts and/or robocalls from the named marketing partner. To qualify as “clear and conspicuous,” the disclosure must be “apparent to a reasonable consumer.” The disclosure cannot be buried, barely visible, appear in fine print or only accessible through a hyperlink.
  • Logically and Topically Related. The content of the ensuing robotexts and robocalls must be “logically and topically associated with the interaction that prompted the consent.” The FCC advises the scope of permitted content can be reasonably inferred from the purpose of the website or location at which the consumer gave consent. However, the FCC declined to adopt a specific definition, and advised that, when in doubt, the seller should err on the side of limiting content to what a consumer would clearly expect.
  • Burden of Proof for Valid Consent. Under the existing rules, the burden of proof for evidencing consent is on the texter or caller (e.g., the party who received the lead). By clarifying the rules to require consent from the consumer directly to one individual caller or texter at a time, the caller or texter will be able to better demonstrate this burden of proof when the consent is obtained via a third party.

3. What Does This Mean for Your Business?

While the Report and Order takes effect 30 days after publication in the Federal Register, the amendments to the definition of prior express consent shall not become effective until twelve (12) months after publication – likely in late 2024 or early 2025.

To prepare for the new rules, lead generation or comparison shopping sites should consider taking the following actions before the rules go into effect:

  • Stop obtaining a single consent to a list of sellers (callers/texters) where prior express written consent is required under the TCPA—regardless of whether that list is displayed on the page where consent is obtained, hyperlinked, or set forth in the fine print of the website.
  • Consider an alternative means of facilitating lead generation in line with the new rules, such as:
    • Offering consumers a check box list that allows the consumer to specifically select each individual seller that they wish to hear from;
    • Offering consumers a clickthrough link to the specific seller’s website, where the seller itself may gather prior express written consent from the consumer directly; or
    • Shifting lead-generation follow-ups to communications that do not require prior express written consent, such as manually-dialed calls that to do not utilize an artificial or prerecorded voice, or communications sent via email or direct mail.
  • Ensure any marketing messages sent pursuant to one-to-one prior express written consent reasonably align with the context in which the consumer provided his or her consent and, if necessary, adjust consent prompts to better align with the consumer’s expectations.
  • Businesses that rely on lead generators for leads should take steps to verify the details of the consent obtained from the consumer and to develop procedures to maintain a record to demonstrate the business has a valid consent to send robocalls or robotexts to consumers obtained through the lead generation site.

Please note we anticipate the FCC will continue to make efforts to clarify its interpretation of the TCPA in light of what it considers to be fairly liberal and inaccurate perceptions of what the law requires. For example, the FCC also took the opportunity in these latest rules to codify that the National Do-Not-Call Registry protections apply to text messages (not just calls), and to informally state its position (in a footnote) that if a consumer revokes consent for TCPA-covered marketing communications on one particular communication chain, the caller must no longer contact the consumer at that number (rather than applying the opt-out request only to the specific chain on which the opt-out request was sent). As a result, companies should keep an eye out for additional rulemaking activity by the FCC in 2024.

The TCPA is a complex and litigious law. We strongly recommend confirming compliance efforts with legal counsel.