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FinCEN

TCPA

FinCEN

Financial Crimes Enforcement Network (FinCEN)

Customer Due Diligence Requirements – Effective January 1, 2018

In May of 2016, the Financial Crimes Enforcement Network (FinCEN) issued final rules under the Bank Secrecy Act (BSA). These rules were created to combat fraud and clarify and strengthen CDD (Customer Due Diligence) Requirements.

What you need to know

The US Department of Treasury, through the Financial Crimes Enforcement Network (FinCEN), proposed stronger Customer Due Diligence requirements for Financial Institutions. They, in addition to the intergovernmental organization Financial Action Task Force (FATP), work to combat money laundering and international terrorist financing.

Requirements

The new rule is described as a “two-prong” approach, which refers to ownership and control. Both will have to be considered for identification:

1. OWNERSHIP: Any natural persons with a 25% or more ownership of the legal entity.

If there is no beneficial owner with 25% or more, then there will be no owners listed for the ownership prong.
If a trust owns 25% or more of the legal entity, use a trustee as the beneficial owner.

2. CONTROL: At least one natural person within the management structure who has significant responsibility to control, manage or direct the legal entity. Examples include such common, well understood senior job titles as President, Chief Executive Officer, and others.

Both 1 and 2 (from above) will need to submit: Name, Address, Date of Birth, and Social Security Number.

Your financial institution may also ask for additional identifying documents.

Effective Date

Financial institutions have already began complying with this rule as of January 1, 2018 and will not accept applications without one of the above methods of verification. Full compliance with the final rule will be required by May 11, 2018.

Strong rules were created for customer due diligence

Customer Due Diligence exists to ensure that Financial Institutions are:

Verifying who their beneficial owners are, to better
Identify any suspicious or fraudulent activity.

This allows the bank to be able to predict, with relative certainty, the types of transactions that its customers will take part in, allowing them to determine potentially suspicious transactions more easily and efficiently. To learn more about Customer Due Diligence and delve deeper into Financial Crimes Enforcement Network’s new regulatory requirements, download the following pdf:

FinCEN-2016-10567.pdf

TCPA

2021 TCPA Rules: Need to Know Info for Car Dealerships

Like it or not, texting has become a basic part of our everyday lives. With 77% of Americans owning a smartphone and 97% of those consumers using text messaging, we’d say texting is here to stay. Not only are consumers using text messaging but businesses are, too. Over 6 billion text messages are sent in the US every day, and those messages have a staggering 98% open rate (compared to emails, which have a meager 20% open rate). With statistics like this, it’s hard to deny that text communications are becoming a mainstay of the consumer experience, and businesses across the country are beginning to catch on. Fast-forward to your own dealership. How can you get your service advi sors, sales people, or BDC to text? Well aside from the excellent efficiency of text communications, texting sets your employees up for success. By providing a convenient, quick, and frictionless way of communicating with customers, service advisors can deliver excellent customer service while also freeing up their own time to work on other tasks. Overall, texting can drastically improve your consumer experience and with research indicating $62 billion is lost by businesses each year in the US because of bad customer experiences, there’s no better time than now.

With great power comes great responsibility; since texting has become such a huge platform for businesses, there have been rules put in place to moderate business’ use of the medium. These rules are an extension of the Telephone Consumer Protection Act, and absolutely apply to your business. Here are the need-to-know facts about TCPA compliance in 2021, some FAQs, and tips to get you started.

Background

The TCPA, or Telephone Consumer Protection Act, was originally passed by Congress in 1991 to regulate the use of auto-dialers and pre-recorded messages in order to protect consumer privacy. Now, the TCPA regulates text messages, telemarketing calls, auto-dialed calls, prerecorded calls, and unsolicited faxes. This is also the authority that creates and maintains the National “Do-Not-Call” list.

In 2015, the Federal Communications Commission (FCC) released its TCPA Omnibus Declaratory Ruling and Order in order to clarify the rules and regulations of the TCPA[1]

Key Terms

TCPA-Telephone Consumer Protection Act
FCC-Federal Communications Commission. The regulatory force behind the TCPA.
ATDS-Automatic Telephone Dialing System or Auto-Dialer.

Any technology with the potential capacity to dial random or sequential numbers, regardless of whether the technology has the current capacity to make the call in issue & equipment to send internet-to-phone text messages.

Text Messages –In the TCPA, text messages are “calls”.
Telemarketing –telephone solicitation.

“Telephone solicitation” means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but such term does NOT include a call or message

To any person with that person’s prior express invitation or permission
To any person with whom the caller has an established business relationship, or
By a tax exempt nonprofit organization[2]

Overall, car dealerships can ensure they are TCPA compliant by following a few outstanding principles. Below are key take- aways for businesses regarding the TCPA and its recent ruling.

Prior Express Written Consent

Previously, the secondary portion of the “telephone solicitation” definition of the TCPA allowed businesses to text consumers purely on the basis of an “established business relationship”. Now, businesses must receive “prior express written consent” before telemarketing, advertising, or texting from an ATDS (auto-dialer), prerecorded device, or any kind of software solution. Written consent can be captured through email, with a written signature, by checking a box on an online form, or by voice recording. However, you may not send an ATDS text to request a recipient to opt-in.

Text Messaging Software vs. Personal Phones

The FCC’s current definition and interpretation of an ATDS is extremely broad, and not limited by how the equipment actually functioned when making a call or sending a text message. Text Communications Solution software as well as an employee’s personal smart phone can both be considered an ATDS; several other factors, including the content and frequency of the messages, come into play. Because of this vagueness, it’s prudent for businesses to assume that their method of communication most likely falls under TCPA regulation, and seek out the proper authorization prior to initiating text conversations with consumers.[3]

Software solutions such as UpdatePromise have built-in measures to ensure 100% compliance with the TCPA rules, taking out any guess work. This is made possible by including an op code in the DMS, by including the proper TCPA compliant language on the dealership’s website, and by also implementing training of employees of the proper language. Without these kinds of measures, using personal phones can put the dealership at extreme risk of violations.

Transactional and Informational vs. Marketing Texts

There is some gray area between what is an informational text, and what could be construed as a marketing or sales solicitation text. For example, some Text Messaging Solution Providers explain that if a business sends a non-commercial text to an individual, specific to an agreed upon relationship such as the consumer providing their mobile phone number, they do not need specifically required written consent. This is only 100% in cases concerning services that have already been purchased.

Imagine a service department customer bringing in their car for an oil change, but a dealership employee texts them to notify them that they also need new tires. Technically, it could be argued that this message is not within the scope of the exception, and count as marketing messages to sell other automotive services or products. UpdatePromise’s Text Messaging Solution ensures compliance via DMS integration and written authorization, to ensure that 100% of your bases are covered.

Frequently Asked Questions

What is the key takeaway for my dealership regarding recent TCPA regulations?

The TCPA was created to protect consumers’ privacy by restricting unsolicited text messages and phone calls, and essentially to prevent spam. To be compliant with TCPA regulations:

A caller must have unambiguous prior express written consent before sending calls via ATDS, if they are of a telemarketing or promotional nature.
A caller must make known that consent is NOT required as a condition of purchasing any goods and services.
telemarketing messages (phone and text) must have an automated opt-out option

Do the recent TCPA & FCC rulings benefit my dealership at all?

The most recent TCPA Omnibus Declaratory Ruling and Order ultimately benefits businesses in several ways. First, to an extent, it clarifies several vague and open-ended aspects of the original TCPA of 1991, and therefore closes several loopholes that fraudulent or malicious parties may use to sue or exploit your business. Of course, this also means that businesses cannot rely on the previous ambiguity; they must be 100% compliant. Second, in the case of non-marketing messages, this ruling reaffirms the previous order that consumers give prior express consent to receive a call or text simply by providing the business with a wireless number.

How can a dealership verify and track written consent?

Text Messaging Solution providers should have the option to show electronic written consent documentation as well as maintain records of written consent.

What about Internet-to-Phone Messaging?

Internet-to-phone messaging has been qualified by the FCC as an auto-dialer (ATDS) under the TCPA, and therefore requires the same prior express written consent as text messaging.

What are the exceptions to the TCPA texting rules?

For non-advertising and non-telemarketing calls, you do not need “prior express written consent”. By virtue of the recipient giving their mobile number to the person initiating the message, they are giving consent, and therefore this situation is an exception to TCPA.

Also, “emergencies”, or calls that are “necessary in any situation affecting the health and safety of consumers”, are excepted from these regulations.

What are the consequences of violation?

The statutory penalty for violation of TCPA regulations is $500 per violation (call/text), and these violations have no cap, making violations in the hundreds of thousands of dollars extremely possible for offenders.

Why are these TCPA Regulations so complicated, and why do I hear different regulations from different Text Messaging Solution Providers?

The 2015 release of the Declaratory Ruling and Order served to resolve 21 separate requests to the FCC for clarification of the original TCPA in 1991. This document served to strengthen and make stricter several of the regulations that had previously existed; however, the vagueness of the original document, in addition to the relatively new nature of the Ruling, leave the enforcement of the regulations up to interpretation. Until more precedents can be set in court rulings, implementation of the law is largely subjective and uncertain.

How do I know which car dealership texting solution providers are TCPA complaint?

Texting Communications Software vendors should have various processes installed in order to educate and aid dealerships in TCPA compliance, but this is all that these software vendors can do. Ultimately, it is up to the Dealership to make use of these tools and education to ensure its employees are following the procedures put in place by the software. Also, a good software solution will guide personnel with pre-installed messages and screens that disable communication unless prior express written consent has been received, providing a safety net.

How can my business practice safe text messaging?

Use proper consent language, which can be provided by your Texting Communications Solution provider
Collect TCPA-compliant express written consent at all information transfer points, including:

– At the point of vehicle sale collect
– At the point of vehicle drop-off for service or repair
– Prior to engaging in website chats or forms
– Whenever leads are captured via forms or in person

Always ensure you have included a clear opt-out option in all messages, and always honor those opt-outs. Your Texting Communications Solution software should immediately block unsubscribed numbers from all future messages.

Should I discuss TCPA Regulations with an attorney?

Yes. Due to the sensitive and sometimes ambiguous nature of the TCPA and its Rulings, a strong legal advisor is always wise. This document has been created by UpdatePromise to help you better understand the TCPA and FCC Rules, and does NOT offer legal advice. Always consult your legal representative for concerns or legal matters.

Under the TCPA can a leadership or a service advisor….

Send appointment reminders via automated text?

YES

If the customer provided the dealership with a phone number relating to her service appointment.

Text a one-to-one personal message using texting software to gain approval for job repairs?

YES

The provision of a mobile number is sufficient consent for a service advisor to call or text customers regarding a repair order, if the message is not marketing in nature. This includes status updates, vehicle ready, automated online payment texts, and thank you texts. Using programs such as UpdatePromise ensures that any gray area (i.e., texts that do not solely concern previously purchased services) are still compliant.

Initiate an outbound text to a mobile # obtained from the DMS or CRM?

YES

If prior express written consent was received when the customer’s phone number was entered into the DMS or CRM. If it’s not a telemarketing text, a service advisor can text one-on-one without prior express written consent (see above).

Initiate an outbound text to a mobile # received from a marketing list or other mobile phone list?

This can be interpreted as text marketing and prior express written consent is needed. Dealerships are strongly advised against this action.

Follow up on a phone lead or voicemail with a text?

*This would be a violation of TCPA if the device used is an ATDS, and if the text is for marketing purposes. Prior express written consent is required. As long as the response is timely, includes opt-out instruc tions, and is not telemarketing, then it is likely not a TCPA issue.

Follow up on an email lead with a text?

*This would be a violation of TCPA if the device used is an ATDS, and if the text is for marketing purposes. Prior express written consent is required.

Follow up on a chat lead with a text?

*This would be a violation of TCPA if the device used is an ATDS, and if the text is for marketing purposes. The dealership must have recorded written confirmation in the chat of permission to text or call the number provided with automated technology, and notice that consent is not required for the purchase of goods or services.

Follow up on a text lead with a text?

Since it is unlikely that prior express written consent will be received in this scenario, it should be assumed not allowed under the strictest interpretation of the TCPA. However, there is gray area to this; since the inception of the lead came from text, it’s logical to assume the person is expecting a text in response. If it is timely, includes an opt out instruction and is not telemarketing, then it is likely not to be a TCPA issue.

Follow up with a lead via text with pictures or video of a vehicle using texting software, if the lead gave the salesperson their mobile #?

It depends, once again, upon the content of the message. If it is purely informational and not promotional in nature, then technically it should be compliant. However, photos and videos could be construed as marketing. There is risk in this area and should be treated cautiously.

Text a customer via ATDS to ask if it is okay to text them, or to request they opt-in?

You cannot text a customer via ATDS without prior express written consent.

FCC TCPA Declaratory Ruling and Order, et seq. (2015). https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf
Telephone Consumer Protection Act (1991), Definitions & Summary, SEC. 227. [47 U.S.C. 227] https://transition.fcc.gov/cgb/policy/TCPA-Rules.pdf
Gottshall, J., & Schaller, B. (2016, July 27). The FCC TCPA Order: What Does My Business Need To Know? Retrieved November, 2017, from https://www.infolawgroup.com/2015/07/articles/privcy-law/the-fcc-tcpa-order-what-does-my-business-need-to-know/

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