The overwhelming adoption of mobile devices creates new opportunities for banking institutions to connect with customers and deliver more meaningful communications. But companies must be mindful of the “rules of the road” that regulate all customer-engagement activities directed at mobile devices.
In the US, the rule book is the Telephone Consumer Protection Act (TCPA), enacted in 1991 primarily to protect consumers from unwanted telephone solicitations. You may have heard that the Federal Communications Commission (FCC) made some recent changes to its TCPA regulations, effective October 16, 2013. The changes harmonize TCPA rules with those of the Federal Trade Commission’s Telemarketing Sales Rule.
The most notable change involves the rules for telemarketing. Telephone calls to any mobile phone using an automatic telephone dialing system or an artificial or prerecorded voice will now require “prior express written consent” (formerly the standard was “prior express consent”) if the call introduces an advertisement or constitutes telemarketing. It's the same new requirement for telemarketing calls to a residential line using an artificial or prerecorded voice. In addition, the exemption for making telemarketing calls where there is an established business relationship has been eliminated.
However, this change does NOT impact the rules with respect to non-telemarketing calls and texts to mobile devices. As was the case before, TCPA regulations still prohibit non-telemarketing calls and texts to a mobile device initiated using an automatic telephone dialing system or an artificial or prerecorded voice, unless the sender has the consumer’s prior express consent.
FICO continues to receive client questions as to whether the new FCC rules will have an impact on core servicing updates, fraud alerts or debt collection related messages sent to customers’ mobile devices. The short answer is no. For these non-telemarketing messages sent to mobile devices, the rules have not changed.
How does a company get a consumer’s prior express consent to communicate using the consumer’s mobile device for fraud alerts or debt collection? The requirements are not detailed in the TCPA, but rather have evolved through FCC rulings and court cases.
In most cases, such consent is valid only if it is given by a consumer with knowledge of the how the phone number may be used. Also, consent usually cannot be given for another person. One important interpretation, made by the FCC in 2008, is that if a customer provides a mobile phone number in connection with a credit application, that’s sufficient evidence of the person’s “prior express consent.”
Nevertheless, the rules governing communications to mobile devices include additional wrinkles. Therefore, it's critical that you consult your legal advisor before engaging in these communications.
It’s clear that there is growing interest in finding new ways to leverage mobile communications to engage with customers. One new strategy, which may fall outside the TCPA and other current guidelines, involves direct communications between a company and its customers through a mobile application that resides on a customer mobile device.
Of course, this is just one innovative strategy among many, and my FICO colleagues can assist you with finding ways to improve your customer engagement strategies using our mobility solutions. We can also help you safely clear compliance hurdles that accompany these activities. While these rules of the road can be a bit tricky, those who master them are finding stronger customer engagement to be a worthy destination.