New “Junk Fax” Rule

New rules adopted in late July will soon prohibit restaurants from faxing daily menus to customers unless they obtain expressed written consent in advance from each recipient, according to Paul H. Ode, a business attorney with the local law firm of Downs Rachlin Martin PLLC. Violators face a fine of $500 per fax. The rules, published on July 25, will be fully effective on August 25.
Under the Telephone Consumer Protection Act of 1991, it is a violation of federal law to send an unsolicited advertisement to a fax machine. Until recently, the Federal Communications Commission held that a fax from a person with an established business relationship with the recipient could be deemed to be invited or permitted by the recipient. So, it has been permissible for the corner deli to fax today’s menu to its customers, or for a manufacturer to fax product updates to its dealers.
“The situation has changed,” Ode said, “and many businesses have less than a month to collect permission from their customers or stop faxing menus and product update information.” On July 25, the FCC published new rules that require the prior express invitation or permission of the recipient before an ad can be transmitted by fax. The permission must be in writing, include the recipient’s signature and provide the fax number to which faxes may be sent. Permission cannot be inferred from an established business relationship, from inclusion of a fax number in a trade association directory or from the recipient’s publication of its fax number in the phone book.
The penalty for violation of the “junk fax” rules includes damages of $500 per fax, which can be tripled if the court finds that the sender willfully or knowingly violated the rule. In one noted case, Ode said, the Hooters restaurant chain was found liable for almost $12 million in damages for sending six unsolicited faxes to each of 1,321 fax numbers.
Not all unsolicited fax transmissions fall within the reach of the “junk fax” rules. The rules apply only to “material advertising the commercial availability or quality of any property, goods or services.” So, non-commercial announcements may be exempt, but any fax intended to lead to a sale of goods or services falls within the scope of the rules.
The new rules take effect on August 25. If you rely on the fax machine to communicate with your customers and prospects, you should seek their express, written permission to continue receiving faxes from you. Until August 25, you will be able to solicit that permission by fax, but after the rules go into effect you will need to obtain the permission by other means.
Ode is a senior attorney and director in DRM’s Burlington Office. DRM is Vermont’s largest law firm with offices in Burlington, St. Johnsbury, Montpelier and Brattleboro, VT and in Littleton, NH. For more information, please contact Ode through the firm’s web site at www.drm.com.