When the Federal Communications Commission (“FCC”) issued its July 10, 2015 omnibus order regarding the Telephone Consumer Protection Act (“TCPA”), the agency made clear that it intends to find no bounds to the scope and application of the TCPA. The FCC’s latest move complements this theme, while bringing new questions to light. On September 11, 2015, the FCC issued dual citations: In the Matter of Lyft, Inc., Citation and Order, F.C.C. DA 15-997 (Sept. 11, 2015) (“Lyft”), and In the Matter of F.N.B. Corporation, Citation and Order, F.C.C. DA 15-996 (Sept. 11, 2015) (“FNB”). These latest orders address user agreements for online services in relation to users’ ability to opt out of telemarketing calls and texts. However, the FCC’s analysis leaves open whether the FCC might apply the Lyft and FNB consent theories outside the telemarketing context.

FCC regulations prevent the conditioning of consent to receive autodialed or prerecorded telemarketing or advertising calls/texts on the purchase of “any property, goods, or services.” 47 C.F.R. § 64.1200(f)(8) (2013).  In the Lyft and FNB citations, the FCC found that, among other violations of the TCPA and related regulations, both Lyft and FNB violated this particular provision by impairing customers’ access to services where customers chose to opt out of the receipt of telemarketing calls or texts. Lyft’s services require users to create an account, access to which obligates the consumer to accept Lyft’s terms of service, including a TCPA telemarketing consent provision. Although Lyft’s agreement notifies users of the right to opt out of promotional calls and messages through unsubscribe preferences, it also states that such an opt-out may impact use of the Lyft platform or services. In practice, the FCC found this to be true. Consequently, the FCC held that Lyft’s opt-out provisions were illusory and user consent was invalid. Similarly, the FCC found that FNB’s conditioning access to its online payment portal and use of FNB’s Apple Pay mobile banking services on acceptance of user agreements with similar TCPA consent provisions, where opting out of promotional calls and texts would affect access to such services, resulted in consent that was invalid.

Notably, the FCC’s order regarding FNB ignores the fact that opting out for promotional calls and texts for FNB’s services did not entirely prevent customers from the purchase of any property, good or service from FNB. Rather, FNB’s provisions merely limited a customer’s access to certain convenience services—namely online banking and Apple Pay. Consequently, the FCC’s ruling blurs the distinction between conditioning consent on the purchase of property, goods or services—as expressly prohibited by FCC regulations—and conditioning consent on one form of payment or add-on convenience service.

Possible solutions to avoid issues such as the ones in the Lyft and FNB enforcement actions, while still permitting TCPA consent through online user agreements or terms of service, may include providing a separate opt-in/out check box for telemarketing consent and/or setting out the terms for TCPA telemarketing consent next to a phone number box, where provision of the phone number is not required to sign up for the online service.

Although both the Lyft and FNB orders focus on telemarketing calls and texts to the exclusion of all other account-related contacts, the FCC’s rulings beg the question: does requiring access to online services present issues in the non-telemarketing context if providing a phone number is a prerequisite to signing up for the online service in addition to accepting a user agreement or terms of service advising that provision of any phone number constitutes TCPA consent to account-related contacts? In such a circumstance, might the FCC invalidate consent because there is no option not to consent by declining to provide a phone number in creating the user account? Thus, the consent provisions would appear to present the same issues as the illusory opt-out addressed in the Lyft order.  For these reasons, it might be wise for providers not to require the customer to provide a telephone number when he or she sets up his or her user account, regardless of whether the consent included in the user agreement or terms of service is limited solely to account-related contacts using an autodialer and/or automated or prerecorded voice or also includes telemarketing-related consent provisions.

For more information on the Lyft and FNB orders, please contact Alexandra N. Krasovec at ank@severson.com.