Report: The Future of Insurance


TCPA: The Cost of Non-Compliance

Compliance is sometimes viewed as one of those things that companies don’t worry about until the benefit of being compliant outweighs the cost of non-compliance. In the case of the Telephone Consumer Protection Act (TCPA), recent cases have shown that the cost and risk of litigation can be extremely high.

Recently a number of high-profile TCPA-related legal cases and decisions have brought some specific requirements to the forefront.

TCPA Compliance Requirements 

  • Organizations need to understand that they are responsible for the action or inaction of any partners or vendors from whom they purchase leads or whom they engage to dial or text consumers on their behalf.
  • The requirement to obtain consumer consent before contacting them, requires that proof of consent be maintained and available in the case of an inquiry regarding TCPA compliance.
  • Consumer consent must be disclosed and obtained in a manner that is clear and conspicuous – meaning that disclosure language displayed on any websites, forms, or documents must be clearly visible and understandable for consumers.
  • Organizations in all industries need to be aware of and ensure compliance with the TCPA. Recent cases have branched out in terms of industry, impacting companies in the cable, banking, automotive, travel and home services industries, just to name a few.

The Cost of Non-Compliance With the TCPA

While the TCPA provides for consumers to seek penalties for violation by pursuing litigation, what often gets overlooked is the cost companies incur just by answering legal inquiries and defending against TCPA-related litigation. It is estimated that costs can be as much as $500,000 for a class action case.

That does not take into account the internal and opportunity costs when staff are diverted from their normal functions to participate in these responses and defense. This also does not include potential cost of offsetting bad press and negative consumer sentiment which may result from any litigation, win or lose. And as recent cases have shown, if a class action suit is brought and your organization is found liable for damages and non-compliance, the penalty could be in the hundreds of millions of dollars.

Given the current regulatory and legal environment, it seems as though it is not a matter of if your company will be impacted by a TCPA-related complaint, but when. While there are legitimate cases being filed, there are also opportunistic plaintiffs and lawyers who are just looking for potential cases.

The key is to ensure that your organization and its partners are compliant and prepared to quickly address any TCPA related complaints. Jornaya’s TCPA Guardian was developed to help organizations do just that.

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