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26 June 20246 minute read

ESIGN consumer disclosures must be provided and consent obtained to meet TCPA prior express written consent requirements

Because of the federal Electronic Signatures in Global and National Commerce Act (ESIGN) and equivalent state laws, companies are delivering via electronic means important disclosures and other information that traditionally needed to be presented "in writing." In addition, the medium of choice for communicating with consumers electronically is rapidly migrating from email to text messaging. As a result, understanding the requirements of the Telephone Consumer Protection Act (TCPA) and how those requirements may be implemented electronically under ESIGN are a must.

The application of ESIGN to other laws and understanding its overlay approach can be a source of confusion for many. The US District Court of the District of Maryland recently analyzed the TCPA and ESIGN in detail, and its findings underscore that, when prior express written consent is required under the TCPA, ESIGN consumer disclosures must first be provided and ESIGN consent obtained if TCPA consent is to be obtained using electronic means. This holding provides a good roadmap for ESIGN compliance.

In Bradley v. Dentalplans.com, 2024 US Dist. LEXIS 100550 (June 6, 2024), plaintiff enrolled in a dental insurance plan over the telephone and provided her verbal consent to receive telephone calls from defendant made using a prerecorded message or an automatic dialing system. However, after plaintiff’s plan expired without renewal, defendant continued to place prerecorded calls to plaintiff seeking to “win back” plaintiff’s business through renewal of her plan. Defendant moved for summary judgment, asserting that plaintiff’s verbal consent covered these “win back” calls. The court discussed the requirements of the TCPA and ESIGN.

Under the TCPA, if an automatic telephone dialing system or an artificial or prerecorded voice will be used for any telephone call that includes an advertisement or constitutes telemarketing, the caller must have the prior express “written” consent of the called party – and that consent must include certain specific disclosures. 47 CFR Sec. 64.1200(a)(2). Defendant bears the burden of proof under the TCPA.

The court noted that the “win back” calls were made using a prerecorded voice, and also constituted advertising under the TCPA as defendant made the calls intending to induce plaintiff to purchase a new membership with defendant – a second subscription to plaintiff’s expired dental plan. As such, the court concluded that defendant needed prior express written consent from plaintiff under the TCPA to make such calls.

The TCPA regulations define “prior express written consent” to mean:

[A]n agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered. 47 CFT Sec. 64.1200(f)(9).

This agreement must include "clear and conspicuous disclosure[s]" notifying the signatory that "[b]y executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice" and that "[t]he person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services." Id. at Sec. 64.1200(f)(9)(i).

The regulations further explain that "[t]he term 'signature' shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law." Id. at Sec. 64.1200(f)(9)(i). The Federal Communications Commission (FCC) has issued guidance that “consent obtained in compliance with the E-Sign Act [15 USC Sec. 7001 et seq.] will satisfy the requirements of [the TCPA], including permission obtained via an email, website form, text message, telephone keypress, or voice recording.” In the Matter of Rules & Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C. Rcd. 1830, 1844 (2012) (emphasis added).

Under ESIGN, an agreement is considered “in writing” if it exists in any electronic record form and complies with the requirements of ESIGN. Notably, ESIGN imposes "consumer disclosure" requirements "if a statute, regulation, or other rule of law requires that information relating to a transaction ... be provided or made available to a consumer in writing." 15 USC Sec. 7001(c). This section of ESIGN provides that a required disclosure provided via an "electronic record" "satisfies the requirement that such information be in writing" if certain additional consumer disclosures are made concerning the use of electronic records and additional consent is received. Id. at Sec. 7001(c)(1). However, this section of ESIGN also specifically provides that "[a]n oral communication or a recording of an oral communication shall not qualify as an electronic record for purposes of this subsection except as otherwise provided under applicable law." Id. at Sec. 7001(c)(6).

With this as background, the court concluded that, to meet the prior express written consent requirements of the TCPA, the defendant must show:

  1. the existence of an agreement authorizing the defendant to send advertising or telemarketing calls or messages to the plaintiff,
  2. that agreement is in writing,
  3. that agreement is signed by the plaintiff, and
  4. that agreement contains the required TCPA disclosures.

If an electronic record is being presented as the agreement, then ESIGN applies with respect to the writing and signing requirements of the TCPA.As a result, ESIGN does not permit the TCPA disclosures to be provided via voice recording, and the additional ESIGN consumer disclosures must also first be provided and consented to. The court noted that:

This conclusion is not in conflict with the FCC's guidance … [because] the signature and [TCPA] consent the consumer provides can still be provided via voice recording, as can the substance of the [TCPA] agreement; the only portion of the [TCPA] agreement that would not be able to be provided via voice recording under this outcome would be the TCPA's required disclosures.

In making the above conclusion, the court distinguished prior cases Morris v. Modernize, Inc., 2018 U.S. Dist. LEXIS 232701, and Reinert v. Power Home Remodeling Group, LLC, 2020 U.S. Dist. LEXIS 214666 (ED Mich November 17, 2020), as plaintiffs in those cases had not shown that the TCPA required the delivery of any written disclosures. The court also pointed to the supporting decision of Mantha v. Quotewizard.com, LLC,2021 US Dist LEXIS 245059 (D Mass December 13, 2021), report and recommendation adopted, 2022 US Dist LEXIS 19502 (D Mass February 3, 2022), which found that ESIGN’s consumer disclosures and consent were required first, because the TCPA required “written” disclosures as part of the agreement to receive telemarketing or advertising messages.

Rules under the TCPA and ESIGN are complex. For questions or additional information, please contact one of the authors.

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