S.E.C. Real Estate Observer

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Lawyers Target Companies Sending Fax Advertisements

A group of lawyers and enterprising debt collectors are filing thousands of lawsuits alleging violation of federal anti-fax laws. Companies sending advertisements by fax are the prime targets of these lawsuits. This anti-fax law is catching many innocent companies as well.

There is a federal law in place prohibiting unsolicited fax advertisements. If you fax an unsolicited ad touting products/services, the penalty is $500 per fax and possibly $1,500.00 per fax if the judge finds that it was intentional.

The law is called the telephone consumer protection act, and it has teeth. The federal government got involved in fax advertising about twelve years ago. Most states have laws prohibiting unsolicited fax advertisements, but the state laws were not very effective. A fax advertiser could avoid a state’s laws by setting up shop in another state and faxing those ads long distance.

At the request of many states, the federal government enacted the telephone consumer protection act, commonly known as the TCPA. Unless an advertiser obtains advance, express approval, sending fax ads is now illegal in most states. Now, don’t let those boys selling the fancy fax broadcast machines fool you. Courts are enforcing the federal law. Express consent from the recipient is needed to send a fax advertisement. Express consent means you better keep written records of that consent. Those who don’t follow the federal law are risking penalties of at least $500.00 per fax.

The $500.00 federal penalty is a stiff penalty for a one-page fax. The penalty was set at $500.00 to give individuals an incentive to seek recovery. Instead, enterprising lawyers and debt collectors pay people a fraction of that $500.00 to assign the unwanted faxes to them for collection. The lawyers and debt collectors then bundle these faxes into lawsuits. As a result, companies are being sued for not just one or two faxes sent to a single individual, but instead for hundreds of faxes sent to many different people.

Although you may not think you are at risk, you could be. Several of our clients have been sued simply because the people receiving the fax forgot that they asked for the fax in the first place! If you think you can just call up the assignee/lawyer and politely explain that this is all just a big mistake, think again. They will not drop the case.

The definition of a fax advertisement is very broad. If anything in the fax could be interpreted as promoting your goods or services, it is subject to the express consent rules.

So, if you are sending advertisements by fax, beware! The current law is not in your favor, and you can save all those fancy free speech arguments for the appeal. If a fax broadcast salesman knocks on your door, better tell them, no thanks!