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Be Careful What You Fax

The Telephone Consumer Protection Act (TCPA) prohibits any person within the United States from using a telephone facsimile machine to send an unsolicited advertisement to a person with whom the sender does not have an existing business relationship. A prior business relationship will be treated as consent to a faxed advertisement unless the recipient withdraws that consent.

Court remedies under the TCPA should command the attention of any company giving thought to a fax advertising blitz directed at potential customers. A person receiving an unsolicited fax may bring an action to prohibit violations of the TCPA and for actual damages, or statutory damages of $500 per violation. For a willful or knowing violation, a court has the discretion to triple the amount of statutory damages. Actual damages may amount to cents per page and the costs of tied-up telephone lines. Statutory damages, however, could reach into the millions for a “blast-faxed” advertising campaign with hundreds or thousands of faxes, with each transmission considered a separate violation.

Not only can the cost of TCPA violations be steep, but in some cases that cost may be extracted from the personal assets of corporate officers, not just the business itself. In one case, the officers and sole shareholders of a small advertising service were found to be personally responsible for statutory damages based upon nearly a million unlawful faxes a month, over five months.

They were personally liable not simply because they held particular offices and sat on the board of directors, but because they actively oversaw and directed the unlawful conduct. With good reason to believe that their actions violated the TCPA, the individual defendants had persisted, as the court put it, “with their eyes and pocketbooks wide open.”

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