The True Cost Of A TCPA Violation

As a firm that has represented telemarketing companies for decades, we have an intimate understanding of the Telephone Consumer Protection Act (TCPA). We have also written previously about the FTSA, which is Florida’s Mini-TCPA. Before we continue, here’s a quick refresher on some of the main points that the TCPA covers. Essentially, it limits how telemarketing companies make calls, whether they can or cannot use different types of technology to do so, and it also established the national Do-Not-Call (DNC) registry.

Failing to comply with the federal TCPA or the DNC registry can result in class action lawsuits and significant monetary damages. Although we have expressed how financially devastating these can be in the past, real-life examples are the best illustration of all. Let’s look at Keller Williams and a recent lawsuit they faced for alleged violations under the TCPA. 

Who Made the Calls?

The lawsuit was filed against Keller Williams Realty, Inc, and KW Management, LLC (which operated under Keller Williams Austin SW). Even though neither one of these technically made any calls directly; they trained their agents to make them and unlike other real estate agencies, Keller Williams takes a very active role in pursuing leads. 

The company’s co-founder has said that the “…lead generation game is in the numbers, so you simply can’t overdo it.” While that may be true, the issue is how those calls were made. Team leaders oversaw how many calls their employees made and how many hours they devoted to calling potential leads. There is nothing wrong, legally speaking, about this by itself.

Class Action Lawsuit

As it happens, a company called Phone Animal allegedly was making upwards of 1,000 calls a day on the agents’ behalf.

Numbers that high can usually be achieved only through autodialers. Of course, there is nothing illegal or inappropriate when using them to contact a person’s cell phone if the recipient provided written consent in advance but that was the question at issue.

The lawsuit was filed here in Florida, and claimed that beginning on August 10, 2016, Keller Williams Austin SW contacted people on their cell phones using a pre-recorded message – and that the calls were made without the requisite consent. 

In the end, presumably after taking a cold, hard look at the risks of litigating, Keller Williams reached an agreement to settle – for $40 million! 

Though this sounds like a significant sum, one must factor in that TCPA violations can result in damages of $500 per violation (and $1500 per violation if done “knowingly”). Keller Williams may now owe a lot of money to the more than the 2 million people they contacted, but that number is still significantly smaller than the potential damages which the TCPA specifies. At just $500 x 2,000,000 people the damages could be $1,000,000,000 (one billion dollars). 

Cove Law Understands The Challenges Telemarketing Companies Face

TCPA oversights can destroy a business. Cove Law is accustomed to assisting clients with compliance regarding the Telemarketing Sales Rule (TSR), the Telephone Consumer Protection Act, and the Do-Not-Call Registry. To continue this discussion with an attorney, contact Cove Law, P.A., to schedule your consultation.

Andrew Cove
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