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BUSINESS
AND CORPORATE LAW |
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February
2004
Unsolicited
Fax Ads Put Your Business at Risk
Fax
"spamming" is against the law, and the risks
of litigation far outweigh the commercial benefits
James
W. Armstrong
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Recently,
some of our clients have been sued (or threatened with lawsuits)
under a 1991 federal law, the Telephone Consumer Protection Act
(TCPA).
One
of the provisions of that law makes it “unlawful for any
person within the United States … to use any telephone
facsimile machine, computer, or other device to send an
unsolicited advertisement to a telephone facsimile
machine." The statute further defines "unsolicited
advertisement" as "any material advertising the
commercial availability or quality of any property, goods, or
services which is transmitted to any person without that
person’s prior express invitation or permission.”
In
short, any unsolicited fax sent for the purpose of advertising
the products or services of any business within the U.S.
subjects the sender to civil liability under the TCPA. Moreover,
TCPA lawsuits can be filed in state court:
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by
any business or individual who receives an unsolicited fax
advertisement,
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by
the state attorney general, and, potentially,
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by
large groups of class action plaintiffs.
Costly
damages. Most troubling, however, are the damages that
plaintiffs can recover in such lawsuits, regardless of whether
or not the fax sender intended to violate the TCPA or even knew
of its existence. Thus, in addition to issuing an injunction,
the court may award the plaintiff his or her “actual monetary
loss from such a violation, or … $500 in damages for each such
violation, whichever is greater.”
Because
fax advertisements are often sent to hundreds and even thousands
of recipients, the potential damages under the TCPA can be
enormous, given that a minimum of $500 can be assessed for each
fax. Furthermore, if the plaintiff can prove that the defendant
“willfully or knowingly” violated the TCPA, the court may
triple the amount of damages otherwise recoverable.
The
recent spate of TCPA lawsuits in Phoenix appears to be
attributable to a handful of local attorneys who must view such
litigation as a promising source of income. We therefore want to
advise you of this situation and urge you to be wary of any
company that offers to provide you with mass faxing services to
large lists of businesses or other potential customers.
Ignorance
no defense. The TCPA has been frequently attacked on
constitutional and other grounds, but we are unaware of any
successful challenges.
In
addition, as mentioned above, ignorance of the law is not a
defense to any TCPA lawsuit, nor can a defendant escape
liability by including a telephone number that the recipient of
his or her unsolicited fax can call to indicate that they do not
wish to receive any further faxes. The only safe course of
action, therefore, is not to send—or allow others to
send—any unsolicited faxes as a method of advertising your
business.
These materials
are designed to provide general information prepared by
professionals in regard to the subject matter covered. It is
provided with the understanding that the author is not engaged
in rendering legal, accounting, or other professional service.
Although prepared by professionals, these materials should not
be utilized as a substitute for professional service in specific
situations. If legal advice or other expert assistance is
required, the service of a professional should be sought.
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