New Federal Rules Ban Unsolicited Faxes to Clients

By David Cho, Assistant Counsel

Accounting firms must prepare to comply with one set of telemarketing regulations established by the Federal Communications Commission (FCC) even as they enjoy a reprieve from another set.

New FCC regulations, developed to enforce portions of the Telephone Consumer Protection Act of 1991 (TCPA), will prohibit telemarketing calls to phone numbers listed on a national “do-not-call” list. The FCC, however, put off similar rules targeting advertising by fax until Jan.1, 2005.

The federal do-not-call registry is set to go into effect on Oct. 1, 2003. With certain exceptions, businesses, including CPA firms, will not be allowed to place telemarketing calls after this date to phone numbers on the list. The exceptions include individuals who have provided prior consent or those with which a firm or company has a “prior business relationship,” which the FCC defines as a situation in which a consumer has made a purchase or transaction within the prior 18 months or has made an inquiry or application over the past three months.

In July, the FCC also moved to restrict fax advertising, but held off on enforcing these restrictions amid opposition from businesses and nonprofit groups.

The new fax rules, which were originally slated to go into effect Aug. 25, would have covered unsolicited faxes containing “any material advertising the commercial availability or quality of any property, goods or services.” But in August the FCC delayed the new fax advertising rules, in part to give businesses more time to obtain written consent and signatures from parties to whom they wish to fax. The 16-month reprieve will also give the FCC time to consider petitions and potential revisions to the rules.

Issues that may have contributed to the delay include a requirement that any business, service or association, including CPA firms, must first obtain the signed written consent of each fax recipient before facsimiles are sent. An oral request for information from a client or member would no longer be sufficient under the pending regulation. For CPA firms that regularly update their clients by fax, the new regs also would mean new record-keeping procedures.

The new FCC fax rules would eliminate the prior “established business relationship” language allowed in the do-not-call regs, so that an existing CPA-client relationship would no longer be sufficient for sending a fax that contains advertisements for products or services.

Critics of the FCC’s proposed fax rules also cite the broad definition of “unsolicited advertising” as encompassing too many types of business communication.

In addition, the fax prohibition would apply to fax machines at both businesses and residences, so CPAs who deal with corporate clients would not be immune from the new regulations.

CPA members with questions or comments about the new rules are encouraged to visit the FCC Web site at www.fcc.gov.