The TCPA, as enforced by the Federal Communications Commission, makes it unlawful to fax an unsolicited advertisement or other communication unless the sender has an established business relationship with the recipient, the recipient consents to such communication, and the advertisement contains an opt-out notice. The TCPA applies not only to faxed advertisements, but also to unwanted text messages and voice messages, and the use of an automatic telephone dialing system in a manner prohibited by the statute.

The TCPA has formed the basis for many lawsuits, because it allows for statutory recovery of $500 for each and every violation of the statute, with treble damages if the defendant willingly and knowingly committed the violation. Standing alone, this $500 figure appears minimal, but class action lawsuits can be a powerful tool for combating these unlawful communications. When these TCPA communications are received, they usually form the basis for class action lawsuits and discovery, with attorneys seeking discovery and identify each and every similar fax, text messag, or unwantted voice message, which expands the class of recipients. The implications can be immense; in one case, an Illinois estate planning attorney sent more than 200 CPAs a targeted monthly fax called the “Daily Plan-It,” which purported to give advice but which also contained information about the attorney’s services. Based on a finding that over 8000 such faxes were sent over a period of several months, the federal trial judge granted summary judgment in favor of the class plaintiffs in an amount exceeding $4 million, and that award was upheld on appeal by the 7th Circuit. Ira Holtzman, C.P.A. & Assocs. v. Turza, 728 F. 3d 682 (7th Cir. 2013).

One might think liability would be covered by insurance companies. In 2013, the Illinois Supreme Court ruled that the $500 per violation damage provision was insurable under the “personal and advertising injury” portions of a general liability policy. Standard Mutual Ins. Co. v. Lay, 2013 IL 114617. Of course, in response to this decision, beginning in 2006, insurance companies have often implemented exclusions into their policies which expressly exclude coverage for TCPA and other statutory claims (contrary to their advertising, insurance companies generally only cover activities that rarely occur), and such exclusions have been recently upheld in Illinois. G.M. Sign Inc. v. State Farm Fire & Cas. Co., 2014 IL App (2d) 130593. Businesses should review their policies for the existence of such an exclusion.