Fax Law Update

Federal Communications Commission rules going into effect Aug. 1 codify, after nearly 15 years of regulation, exactly what constitutes an established business relationship. The FCC, which issues regulations for implementing the law, attempted to further limit the advertisers’ reach in 2003 with stricter rules. But Congress instead opted to step in and amend the statute itself with the Junk Fax Prevention Act of 2005.

Under the regulations about to take effect, advertisers can still send unsolicited faxes to recipients with whom they have an established business relationship or from whom they have express written permission. The commission now defines an established business relationship as a prior or existing relationship formed by two-way communications, with or without a money transaction.

The rules clarify that senders can only use fax numbers voluntarily provided by the recipient. However, the sender does not have to demonstrate how it obtained the fax number if it can prove an established business relationship prior to July 9, 2005. The changes also create a requirement for “opt out” language in the fax directing recipients to a cost-free mechanism for removing themselves from a fax list. The law still allows private parties to sue for a violation, with damages of up to $500 per faxed page or $1,500 per page if the court finds a willful violation. Although seemingly insignificant sums, these fines add up quickly in the class-action suits often brought against mass-fax advertisers.

Separately, the FCC can fine up to $11,000 for each fax violation it discovers as part of an investigation.

For companies distributing faxes, the most significant element of the rule changes is the opt-out language. If a fax does not have the right opt-out language penalties can be quite costly.
Note: This information is not meant to replace appropriate legal counsel. For updated information concerning lax communications contact your legal counsel.