Wave of Class Actions Targeting Businesses Marketing to Florida
Is your business at risk?
With the 2022 surge of telemarketing class actions, businesses need to be increasingly concerned about their practices and procedures marketing via phone call or text to Florida area codes. The majority of recent claims stem from the recent amendment to the Florida Telephone Solicitation Act which became effective in July 2021.
The FTSA was signed into law during the pandemic and seemingly received little attention by businesses and marketers promoting their products or services to the State of Florida. Equally, we saw very little litigation activity under the new act. However, 2022 marked the year that consumer attorneys and their clients would swiftly turn focus to the FTSA.
Today, we are seeing class actions filed daily against some of the largest big-box retailers, coupon clubs, medispas, and virtually any other business communicating to Florida residents about their products and services.
A violation of the FTSA brings penalties of $500-$1,500 per call or text in addition to liability for attorneys’ fees and costs. With millions of calls being placed since 2021, companies now being sued under the FTSA are finding themselves in the cross-hairs of devastating class action risk.
The FTSA includes a wide array of restrictions related to communicating with Florida residents regarding a company’s products or services. At the core of the recent lawsuits, however, is the specific restriction related to making telephone sales calls or texts involving an automated system for the selection or dialing of telephone numbers or the playing of a recorded message to a number without the prior express written consent of the called party.
There are two critical components to this specific restriction.
- First, the term “automated system” is broadly defined by the FTSA as simply a system that automatically dials or selects numbers to be called. Since the U.S. Supreme court limited the definition of “automatic telephone dialing system” under the federal Telephone Consumer Protection Act (TCPA) in April 2021, many businesses, lead generators, and marketing vendors made general conclusions their telemarketing activity was now “TCPA Compliant” based on established practices. Indeed, TCPA lawsuits after the seminal Facebook decision dropped by more than 30% in just six months following the opinion. However, the Facebook decision has limited to no application to the FTSA given the lack of statutory definition similar to the TCPA. This unresolved question – what is an automated system under the FTSA? – has opened the door to these lawsuits that businesses believed were no longer a risk.
- Second, the FTSA requires “express written consent” in order to comply with this restriction. The term is defined by the Act and requires specific substantive content in the written consent form and, most importantly, that it “bears the signature of the called party”. Merely providing one’s cell phone number as part of an introduction or basic sign-up likely does not comply under these requirements and can expose your company to significant exposure.
With most cases still in their early stages, businesses need to be proactive in understanding the FTSA and complying with the specific restrictions on texting and calling Florida area codes, distinct from the TCPA’s compliance restrictions. Implementing procedures to ensure compliance with the FTSA will help mitigate the risk of litigation. Here are some action items that businesses can do now to be proactive:
- Consult with a law firm or in-house legal department on the proper procedures to gain express written consent and alter the current procedures accordingly.
- Take the proper time and means to secure prior express written consent in advance of communication as part of customer contact and lead generation.
- Audit your third-party vendors and lead generators to ensure customer consent is properly obtained and archived.
- Evaluate your telemarketing policies and procedures consistent with logging any revocation of consent and your internal do not call list policies and procedures.
- Ensure vendors certify they are both FTSA and TCPA compliant as part of your vendor agreements.
We will continue to monitor the case results out of Florida around the FTSA and keep you informed of further developments.