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Faxes to Your Members: New Rules Effective August 1, 2006


Note: The following discussion is provided for informational purposes only and is not intended to serve as legal advice. For specific information about fax advertising rules, consult your attorney.

Since 1991, the telemarketing and fax advertising rules promulgated by the Federal Communications Commission (FCC) under the Telephone Consumer Protection Act (TCPA) have been revised numerous times. The most significant revision was the FCC's reversal of its earlier ruling permitting persons or entities with an established business relationship with a recipient to send unsolicited fax advertisements. This reversal—and the legislation that succeeded it—can have significant consequences to all nonprofit organizations with large numbers of members.

An established business relationship, or EBR, is defined as "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such persons or entity, which relationship has not been previously terminated by either party." Common examples of EBRs include an organization's relationship with its members, donors, clients, or customers.

It is important to note that the TCPA, as originally enacted and as amended by the Junk Fax Protection Act of July 9, 2005, does not prohibit the sending of faxes that are not commercial in nature. The FCC recently clarified "that messages that do not promote a commercial product or service, including all messages involving political or religious discourse, such as a request for a donation to a political campaign, political action committee or charitable organization, are not unsolicited advertisements under the TCPA." Therefore, nonprofit organizations may continue to send faxes that are not commercial in nature to any recipient at any fax number and without the opt-out notice requirements described below without violating the TCPA.

Beginning August 1, 2006, however, nonprofit organizations sending unsolicited fax advertisements must comply with the following rules:

  • The organization must have either an EBR with the recipient or have received the recipient's express written permission to receive unsolicited fax advertisements.

  • If the organization is relying on an EBR to send unsolicited fax advertisements, the organization must have obtained the recipient's fax number directly from the recipient. In alternative, the organization may obtain the recipient's fax number from the recipient's own directory, advertisement, or site on the Internet, provided that the recipient has not noted on such materials that it does not accept unsolicited advertisements at the fax number in question. Additionally, an organization may obtain the recipient's fax number from a purchased mailing list, provided that the organization takes reasonable steps to verify that the recipient consented to have its fax number included in the purchased mailing list.

  • If, however, the EBR existed before July 9, 2005, and the organization also possessed the recipient's fax number before July 9, 2005, the organization may send the fax advertisements without demonstrating how the number was obtained.

  • The fax must identify the telephone number of the sending fax machine or the organization sending the fax.

  • The fax must include the date and time it was sent.

  • The fax must contain an opt-out notice stating that the recipient is entitled to request that the organization not send any future unsolicited advertisements.

  • The opt-out notice must be clear and conspicuous and on the first page of the fax.

  • The opt-out notice must include a telephone number, fax number, and cost-free mechanism (including a toll-free telephone number, local number for local recipients, toll-free fax number, Web site address, or e-mail address) to opt out of faxes. These numbers and cost-free mechanism must permit the recipient to make opt-out requests 24 hours a day, 7 days a week.

  • The fax must state that the recipient may request the organization not to send any future faxes and that failure to comply with the request within 30 days is unlawful.

  • The organizations must honor a recipient's request not to receive faxes within the shortest reasonable time from the date of such request, not to exceed 30 days. Thereafter, the organization may not send any fax advertisements to that recipient, regardless of whether an EBR continues to exist, unless the recipient later provides prior express permission to receive unsolicited fax advertisements.
Failure to comply with these rules can be very costly to an organization. The FCC may impose fines of up to $11,000 for each unsolicited fax advertisement sent in violation of the TCPA. More significantly, the TCPA authorizes recipients of unsolicited fax advertisements to file civil lawsuits against organizations and provides for statutory remedies of up to $1,500 for each unsolicited fax advertisement received. Although many such claims are brought by individual recipients, there are several class action lawsuits pending throughout the United States seeking statutory damages in the hundreds of millions of dollars on behalf of all of the recipients who ever received an unsolicited fax advertisement from a company in violation of the TCPA.

Elissa F. Borges, Esq., Ober|Kaler
© 2006, Ober|Kaler

Elissa F. Borges is an attorney practicing in the Nonprofits Group of Ober|Kaler. She is based in the firm's Baltimore office and can be reached at (410) 347-7327 or efborges@ober.com.
Topics: Law and Regulations