FCC Issues Citations To Lyft And First National Bank Due To Alleged TCPA Violations

On September 11, the FCC’s Enforcement Bureau issued two similar citations highlighting telemarketing practices by Lyft, Inc. and the First National Bank (FNB). These Citations stated that each entity had violated the TCPA by failing to allow their respective customers to opt out of receiving telemarketing messages. As we previously reported, the Bureau during the summer had alerted PayPal to similar concerns about its subscription agreement. After the warning, PayPal modified its agreement so as to permit PayPal users to opt out of receiving automated telemarketing messages. These recent citations are shots across the bow at other commercial entities with messaging policies that the FCC views as too restrictive.

Lyft Citation. Lyft provides a “transportation matchmaking service that allows users to either download a mobile application or create an account on the Lyft website.” Consumers seeking to register for service are required to agree to receive texts and calls on their cellphones that may be placed using automatic telephone dialing or delivered via pre-recorded message. While the Lyft user agreement contains instructions for opting out of telemarketing, the agreement further specifies that “opting out of receiving text messages or other communications may impact your use of the Lyft Platform or the Services.” The FCC Citation states that the opt out instructions provided in searching the Lyft website are incomplete as they deal only with text messages, and further, that when an opt out request is made and implemented it is no longer possible to use Lyft services. As a result, the Enforcement Bureau stated that this opt-out opportunity was “illusory” as there is no alternative to agreeing to receive telemarketing calls and texts in order to use Lyft’s services. Noting that it is unlawful to require that a consumer be required to consent to receive telemarketing calls as a condition of purchasing services, the Citation observes that Lyft also circumvented FCC disclosure requirements. Finally, to the extent that Lyft sent telemarketing texts or calls without prior written consent, the FCC Enforcement Bureau determined that each such call or text would be a separate violation of the agency’s rules. Lyft was given 30 days to respond to the Citation in writing or by requesting a meeting with the FCC staff. Because Lyft is not directly regulated by the FCC, the Citation was a warning without monetary penalties; however the Citation stated that continued or future actions the agency finds violate the TCPA rules could be subject to FCC fines. Within days Lyft reportedly modified its disclosure and opt-in policies to allow continued use of Lyft services without any requirement to consent to receive telemarketing texts or calls.

FNB Citation. FNB offers banking and credit card services to consumers in several states. Its online banking services are accessed by its website and in order to activate online banking, a consumer is presented with an Online Banking Services Agreement and is directed to review the disclosures. One such disclosure states “You also consent to receiving text messages and e-mails from us at that number for marketing purposes.” FNB’s Apple Pay terms and conditions contain a similar disclosure, with an added statement that: “If at any time you revoke this consent, we may suspend or cancel your ability to use your Card in Apple Pay.” The FNB Citation observes that any requirement to consent to telemarketing in order to purchase a service violates TCPA rules prohibiting the placement of consent to receive telemarketing as a condition on the ability to access services. Like Lyft, FNB was provided with 30 days to respond either in writing or by requesting a meeting with the FCC staff.

Commissioner O’Rielly Reacts.  FCC Commissioner Michael O’Rielly released a statement concurrent with the Citations that reads: “Today’s Enforcement Bureau action showcases once again the Commission’s complete cluelessness when it comes to the tech economy, missing the point about how these free, popular, and entirely optional services actually work. The Bureau is targeting two innovators who are putting power in consumers’ hands to pay for their groceries or locate a safe ride directly from their mobile phones, for communicating with their customers on mobile phones.” For now, Commissioner O’Rielly’s view is in the minority and the FCC’s Enforcement Bureau is continuing a very public campaign designed to publicize what it views as inadequate disclosures and opt-out implementations by commercial entities. The bottom line of the Lyft and FNB citations seems to be that the Enforcement Bureau sees telemarketing itself as an a la carte option, to be carved out like the dessert course on a menu.