Unpacking the Recent FCC Rulings


Unpacking the Recent FCC Rulings

The U.S. Federal Communications Commission (FCC) oversees powerful laws and regulations impacting the call center industry, notably the Telephone Consumer Protection Act (TCPA).

So, call centers should pay heed to a pair of recent FCC rulings that are poised to upend call center compliance in 2024 and beyond.

The FCC voted to ban AI (artificial intelligence)-generated robocalls and close the infamous “lead generator loophole” that allowed businesses to purchase leads through “consent farms.”

Both of these changes were made with customers’ best interests in mind and share a common goal. Namely to protect households and individuals from unnecessary spam callers.

However, they have significant implications for legitimate marketers, adding confusion to what was already a complex compliance landscape.

Call center leaders must be prepared to face these rule changes head on in order to remain fully compliant. Their challenge now is managing compliance risk while not compromising their ability to reach potential customers.

It’s a tricky balancing act, but it begins by understanding the details of each of these rule changes.

The FCC’s Recent Rule Changes Explained

What led the FCC to ban AI-generated robocalls?

The inciting incident happened in January 2024, when an AI-generated version of U.S. President Joe Biden’s voice called New Hampshire residents, discouraging them from voting in the upcoming presidential primary.

This incident is one of many reported controversies that have demonstrated the potential for advanced deepfake technology to spread political misinformation.

As with most FCC rulings, differing opinions have emerged regarding the interpretation of this change.

Some experts don’t see the ruling as an outright ban of AI-generated robocalls. Instead, they see the potential for these calls to simply be grouped with all other automated robocalls under the TCPA law. This would make call centers liable for obtaining express written consent prior to reaching out to customers with any AI-generated content.

Call centers have grown accustomed to this consent requirement since it went into effect in 2012. In response, some businesses turned to consent farms in addition to using traditional methods for capturing customer consent.

This was a turning point. Consent farms are effective at seducing online users into participation, then selling the “opt in” down the line to other telemarketers and businesses.

These tactics eventually succeeded in subverting the Do Not Call registry. It was only a matter of time before these questionable methods caught the eye of the FCC.

In December, the FCC announced a rule change that will end the lead generator loophole. Companies will now need to secure one-to-one-consent, meaning the customer must provide consent to the organization they receive calls from.

It’s difficult to understate just how disruptive this change will be. In order for businesses that rely on consent farms to remain profitable, they must reconfigure their entire approach to lead generation, while avoiding any compliance slip-ups.

U.S. Compliance Required Also for Non-U.S. Companies

American legislation and regulations do not just affect companies located in the country including its territories. They apply to any enterprise, regardless of where they are based, that does business, or seeks to, with U.S. consumers and businesses.

Therefore, any company that markets in the U.S. must be aware of – and comply with – these laws. And should regulators find that illicit actions have allegedly been made by non-U.S. businesses and executives you can expect that they will be pursued very vigorously, as seen by the recent Congressional action against TikTok.

The Legal Domino Effect

The FCC’s ruling on the lead generation loophole isn’t expected to go into effect until January 2025. While that might seem far away, call centers can’t afford to procrastinate, especially considering the high cost of a compliance mistake that results in legal action.

A compliance-related lawsuit is more than an expensive slap-on-the-wrist; it’s a distraction that reverberates across the whole organization. Employees are preoccupied as the organization’s focus shifts toward defending itself against the action, which shifts time and resources from revenue-generating activities.

The financial repercussions of non-compliance can also be significant. In addition to initial fines, there are legal fees to consider: costs that pile up the longer legal proceedings drag on.

Additionally, brand damage includes serious consequences, like reduced customer loyalty, lower revenue, and reduced shareholder value. Reputation damages can also hinder recruiting and retention efforts, which is already challenging in contact center environments.

Often, the offending business is issued a consent decree, which is a legally binding performance improvement plan. The consent decree gives the business a hard deadline for remediating and meeting the compliance requirement in question.

However, many organizations lack the infrastructure to adjust to large-scale compliance changes in a timely fashion. If you fail to meet the consent decree deadline, things can quickly spiral out of control, leading to a years-long legal battle that can tank employee morale and the future of the business.

That sounds like a recipe for disaster to me. To prevent this hypothetical scenario from becoming a reality, your organization must have a sense of urgency about these recent FCC changes.

How to Prepare for January 2025 Rule Changes

To a large degree, your company’s response to the FCC’s rulings on AI-generated robocalling and consent farms will depend on how heavily you rely on these two practices. However, I believe every organization should begin with the same foundation: a thorough marketing audit and compliance strategy.

The audit should identify all internal workflows that rely on consent farms or AI-generated robocalling. Consider the data collection methods, communication channels, and consent mechanisms that comprise these workflows. Which of them will need revamping by January 2025?

For businesses that rely on robocalling and consent farms, the clock is ticking to adapt to these new FCC changes. But compliance isn’t a box to check off…

For example, evaluate your marketing materials to ensure they explicitly state the purpose of data collection and outline how the customer’s data will be shared with third parties.

From there, develop a compliance strategy that outlines a clear timeline for essential tasks, determines which personnel and resources you need, and details how you plan to communicate these changes to relevant internal and external stakeholders.

This is where your business approach to robocalling and consent farms will dictate the specifics of your strategy. However, here are a few thoughts that all businesses should consider as they develop and implement their plan.

  • Explore alternative lead generation methods. Take time to develop new strategies to acquire leads that are based on individual opt-in consent.
  • For example, build opt-in lists through website forms, social media engagement, targeted ads, and content marketing. Collaborate with relevant businesses to reach new customers through co-marketing initiatives or referral programs. Explore building in-house expertise and resources for identifying and qualifying potential leads.
  • It will take some trial-and-error, but these experiments will ultimately lead to a more sustainable lead generation practice.
  • Implement compliance monitoring tools. Compliance is nearly impossible to manage manually, especially for call center leaders and employees who are focused on meeting sales quotas. This makes automated compliance monitoring tools worth considering.
  • Tools that track marketing activities and ensure compliance can lift a massive weight off employees and reduce the risk of human error. The right monitoring tools can keep an eye on data collection practices and robocalling policies to get ahead of any potential compliance issues.

The process may seem time-consuming and arduous now but think of it as a long-term investment. Not only will compliance monitoring tools and strategies help you respond to these changes from the FCC, but they’ll also leave you better prepared to adjust to future regulatory changes.

Building a More Sustainable Compliance Framework

For businesses that rely on robocalling and consent farms, the clock is ticking to adapt to these new FCC changes. But compliance isn’t a box to check off; it requires constant attention and a strategic approach to adapt to evolving regulations and industry best practices.

By reevaluating your marketing activities through a compliance lens, you can avoid being caught off guard by FCC or TCPA changes.

Ultimately, compliance-minded organizations should strive to develop the optimal combination of technology, internal expertise, and processes to guarantee full adherence to relevant – and evolving – regulations and processes. This will ensure they maintain compliance with applicable regulations.

Mark McKinney

Mark McKinney serves as the VP of Market Intelligence and Innovation at Gryphon.ai, a leading compliance and conversation intelligence platform. With over 30 years of experience building high performing teams that deliver innovative solutions and high impact results for his partners, he currently supports Gryphon.ai’s business strategy and strategic decision-making efforts.