It happens several times a day in virtually every office in America: the fax line rings, and moments later the machine spews forth an invitation to take a trip to sunny Cancun for only $500 per person, or a stock scam, or some other unwanted, annoying advertisement. For some, it’s a minor inconvenience. For others, it can be a major hassle and expense as supplies are used, fax lines are tied up, and important business documents are missed or accidentally thrown out with the junk. Regardless of whether the annoyance is minor or major, there is something you can do about it, and you might earn yourself some cash in the process.
The issue of unsolicited advertisements sent by fax (“junk fax”) was addressed by Congress in 1991. Under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, it is illegal for companies to send you junk faxes. And, what’s more, the law entitles you to sue the sender in state court for a minimum of $500 per page. The law also allows the judge to triple the damage award to $1,500 per page under certain circumstances, and those circumstances are fairly easy to show.
Have I got your attention now?
I should. Because whether you are the recipient of one of these junk faxes or someone who has considered advertising by junk fax, you should be aware of the financial stakes. When Hooters of Augusta hired a firm to send six junk faxes to several thousand people, 1,321 of the recipients joined together in a class action suit against the company. As a result, Hooters ended up paying out a judgment of $11.9 million. The Dallas Mavericks basketball team shelled out $650,000 to settle a similar case. In 2004, well-known anti-junk fax crusader Steven Kirsch obtained a $40,000 judgment against First Chartered Investments for sixteen faxes the company sent him. I’ve pursued junk fax cases on my own behalf and on behalf of clients, and have yet to lose a case.
In short, real money is at stake, and for that reason, you should arm yourself with information. It’s my hope that this simple FAQ will provide that information. Of course, if you have any other questions, you can always contact me to learn more. For your convenience, this FAQ is divided into several sections: General Background, Information for Junk Fax Recipients, Information for Potential Junk Fax Senders, and Links to More Information.
One more thing: this information is very general in nature. Each case is unique, and by no means is this information one-size-fits-all; specific advice should be sought from an attorney if you are considering advertising by fax or have received unsolicited junk faxes. Furthermore, much of this information is specific to Michigan, where I am licensed to practice. Many states have implemented junk fax laws, and these laws vary widely in their requirements and application. Always consult your local statutes and cases before launching headlong into potentially litigious activity.
Q: Why is junk faxing illegal?
There are several reasons why Congress chose to outlaw the sending of junk faxes. Any of them are reason enough for a potential junk faxer to avoid sending these faxes or for legislatures to act.
One reason is that junk fax broadcasters (the people who are paid to send out thousands of these faxes for their customers) have used incredibly aggressive and outright harmful methods to obtain the numbers; the University of Washington Medical Center had its telephone system shut down when notorious junk fax company Fax.com used a “war dialer” to send over 1,000 telephone calls to the hospital’s phone system at once. These war dialing techniques, although illegal, are common. On more than one occasion, I’ve had my sleep interrupted at 2 a.m. by a junk faxer’s war dialer calling my home telephone to see if there’s a fax machine attached to it.
Another reason is that these faxes cost American businesses hundreds of millions of dollars each year. The California Public Utilities Commission concluded in a published report that the costs of junk faxing in paper, toner, handling, and maintenance of fax machines top $10 million annually in that state alone.
Finally, there’s the unavoidable fact that the sending of a junk fax is, at its most basic level, one thing: theft. The advertiser is forcing an unwilling recipient to pay for the printing, delivery, and distribution of his advertising. Even if the costs are small—one to three cents per fax—these costs add up, and the fax broadcaster (who has avoided paying for the printing, paper, and distribution of the advertising) reaps the benefit.
Q: Why did Congress give fax recipients the right to sue broadcasters for a minimum of $500 per fax?
Again, there are a couple of reasons. The recipients are the ones bearing the brunt of the expense of junk faxing, and they’re the ones being stolen from, so it makes sense that they should be allowed to recover. Another reason is that the practice of junk fax broadcasting has become so pervasive that any effective government enforcement would be prohibitively expense, so what Congress decided to do was authorize private citizens to act as “private attorneys general” and sue the broadcasters themselves. The $500 minimum was intended to ensure that there was an incentive for citizens to pursue these claims, and to ensure that the cost of sending junk faxes would exceed the profits if even a few people sued the violator. Junk faxing is prevalent because it’s so cheap; once the costs exceed the benefits, junk faxers will (in theory) stop. (Do you think Hooters of Augusta will be sending out any more junk faxes?)
Q: Is there a “do not fax” list similar to the federal “Do not Call” list for telemarketers?
There is no such list. Such a list has been proposed, but as with most proposals, this one is a double-edged sword.
First, there are some recognized benefits. Small businesses that don’t mind stealing other people’s paper and toner in order to advertise their business would have a way to “legitimately” send out advertising very cheaply and safely. And the list would—in theory, at least—dramatically cut down on the number of junk faxes sent each day as broadcasters found an easy way to download a list of numbers that their computers should avoid dialing.
But there are negative implications, as well. Most importantly, the onus would be on the consumer to add his number to the list; this is like the government establishing a “do not burgle” list with which homeowners had to register in order to avoid having their belongings legally taken from their homes by anyone who wanted to take them. Second, it wouldn’t work; it has been illegal to send junk faxes for half a decade now, and the number of faxes sent has not dropped dramatically. The broadcasters have just gotten sneakier and better at hiding themselves. Some are even pulling scams to dupe naive third parties into doing their dirty work for them, and when the heat gets put onto these third parties, the broadcasters skip town and leave them high and dry.
A better solution would be a “Feel Free to Call” (or “opt-in”) list. Under this plan, any person or business wishing to receive unsolicited advertising by fax would add her number to the list, and advertisers could fax at will to these people. This solution is better in any number of ways: it puts the burden of proof on the broadcaster, it supplies the broadcaster with an easy way to prove it wasn’t liable if sued, and it supplies a broadcaster with a ready-made list of numbers to call (thus relieving the broadcaster of the cost of obtaining the numbers through purchase or other means). Of course, the fax broadcasters fight this idea tooth-and-nail because they know that nobody would sign up for a “Do Burgle” list.
Q: I saw a website that said it’s legal for companies to send these kinds of faxes as long as they have an “opt out” number on them and honor “opt out” requests. A fax broadcaster told me the same thing. Is this true?
The short answer is “no”. There is no such thing as an exemption for unsolicited faxes containing an “opt out” number (with one important exception we’ll get to in a moment). There’s a simple reason for this: the opt out numbers don’t work. In fact, more often than not, calling an “opt out” number is the best way to ensure that you’ll receive more junk faxes.
Although there are several different business models employed by fax broadcasters, a common one is this: the broadcaster (who we’ll call “Junk, Inc.”) has a massive database of fax numbers spanning the entire country. The customer (we’ll call him “Bob”) requests that a junk fax be sent to a specific set of numbers: fax machines in a certain ZIP code, for instance, or fax numbers with a specific prefix (the “555” in “444-555-6666”). The broadcaster then sells the customer three things: the database containing this subset, the transmission service, and an opt-out number. Assuming that the company is even remotely scrupulous, when a recipient calls the number to be removed from the database, the number is removed . . . from Bob’s database, but not from the Junk, Inc. database. In fact, the callback has just confirmed to Junk, Inc. that there is a live fax machine at the number given, and Junk, Inc. adds this data to its own database, which it may then sell to another fax broadcaster. Of course, it’s unlikely that Bob will ever send another junk fax from that same database anyway, so the opt-out has little if any impact.
Yes, I’ve seen websites (including some written by pro-junk fax attorneys) that claim that an opt-out number gives cover to a junk faxer. The authors often cite a statute to that effect. But without exception, they cite state law, and it’s true that there are statutes in some states that have an opt-out exemption. However, this does not mean it’s legal to send junk faxes in these states if the faxes include an “opt-out” number because the federal TCPA is effective nationwide. (One unique feature of the TCPA is that it grants states the authority to disallow enforcement within their own borders by affirmative legislative action, but to date no state has done so.) That’s why these authors never cite federal law to prove the legality of an opt-out number: there isn’t one. With, of course, that one exception mentioned earlier, which we’ll now discuss.
This aforementioned exception is found in the revision to the TCPA passed in July of 2005. Under this new law, a broadcaster is covered by an opt-out number if (and only if) the sender already has an existing business relationship (EBR) with the recipient, has received that fax number voluntarily from the recipient in the context of the EBR, displays the required opt-out information clearly and conspicuously on the first page of the fax (a simple “To stop receiving faxes, call 800-XXX-XXXX” is not sufficient), and honors opt-out requests within a reasonable period of time (not to exceed thirty days). All of these requirements must be met for the opt-out exception to apply. If a single one of these requirements is missing, the opt-out is ineffective and the $500 minimum is back in play.
Q: Is there any way for an advertiser to send unsolicited advertising by fax legally?
As previously mentioned, the 2005 revisions to the TCPA create an exemption for faxes sent to a recipient who has voluntarily given her fax number to the sender as part of an existing business relationship (EBR) between the two if certain other requirements are met (the fax must include an opt out notice, for instance, and the opt-out must be honored). So if you own a computer store and you buy products from Sleazycorp, Sleazycorp can send you faxes advertising its latest products if you’ve ever given your fax number to a Sleazycorp representative, but Sleazycorp must conform to the other requirements of the statute. If Sleazycorp got your fax number by purchasing it from a marketing firm, Sleazycorp still cannot send you junk faxes legally even if there is an EBR between your two companies.
Q: Does Michigan have a junk fax statute?
Yes. MCLA § 445.1770 et seq gives the recipient of a junk fax the right to sue in state court for $500 per fax, much like the federal TCPA. Unlike the federal law, the Michigan statute has a “notice” requirement: the sender must have previously been issued a “cease and desist” order by the state Attorney General, have entered into an “Assurance of Discontinuance” to avoid a suit by the Attorney General, or have been sent a letter by the recipient forbidding the sender to send junk faxes. And although the state statute does not contain the treble damages provision of the federal TCPA, it does include a specific provision awarding attorney’s fees to the recipient. Note that the $500 per fax under the Michigan statute is in addition to the $500 minimum under the federal statute, making eligible faxes worth $1,000 minimum each (plus reasonable attorney’s fees).
Q: Isn’t this junk fax thing just a scam? I saw an article recently that said this was an email scam like that Nigerian cash transfer hoax.
No, the law is legitimate and enforceable. (You can look it up yourself, if you want, on the U.S. House of Representative website.) Unfortunately, there is such an email scam floating about. This does not mean, however, that one cannot file a legitimate suit under the TCPA, any more than an email phishing scam purporting to be from your bank means that banking is illegitimate. Just like banks, attorneys are highly unlikely to send you letters of this type over the internet; they’ll use the actual postal service. So in general, if you receive an email threatening you with a lawsuit, you’re probably safe, but if you receive the letter in the mail, you should contact an attorney.
Information for Junk Fax Recipients
Q: Is there any way to make these junk faxes stop?
The short answer is “probably not.” Outside of changing your fax number, there’s not really much you can do once the genie is out of the bottle. (And even changing your fax number is a temporary solution; eventually, fax broadcasters will find it even if it’s unlisted through war dialing or other means.) You can reduce the number of faxes you receive (and make them worth something to you) by suing the senders under the TCPA (and possibly state law), but you’ll never make them stop completely.
However, there are some measures you can take to slow the proliferation of your fax number to the junk faxers, or to decrease the burden that junk faxes cause to your operation:
- Do not include your fax number on your website, letterhead, business cards, advertising, or other promotional pieces, and do not list your fax number in telephone directories. For most businesses, it is unlikely that your fax number needs to be publicly available, so why publish it? Anyone wishing to send you a fax can simply call and get the number. (This is especially important for websites, since many junk faxers use spiders to harvest fax numbers from thousands of websites at a time.)
For those who do need a fax number publicly available (for instance, a restaurant that takes orders by fax), be sure to include the statement “Advertisements to our fax machine are prohibited” (or something similar) with the fax number.
- Pursue junk faxers in court. The best way to keep junk faxers at bay is to let them know you are serious. Once the broadcasters know that you can cause them trouble (directly, by suing them, or indirectly, by suing their customers), they’ll often blacklist your number just to avoid the hassle.
You should also know that although many kinds of lawsuits can be a real drain on time and money, this isn’t usually true in junk fax cases (although it can happen from time to time). There are many attorneys who will handle junk fax cases for a contingency fee. In that situation, all you have to do is give your faxes to the attorney, and (s)he will try to collect from the sender.
- Receive your faxes on a computer. What I finally ended up doing to reduce the amount of toner and paper being wasted by junk faxes (which became a significant expense) was put an old computer on the job as the fax machine recipient. This is very easy to do, and also quite inexpensive; if you poke around a bit, I’ll bet you can find someone with an old computer who is willing to give it to you just to get it out of his hair. And it doesn’t even have to be a good computer; for a long time, I ran an old 200 mHz computer with 16 MB of RAM as my incoming fax machine. All you need is the computer, a modem (which is probably built into the computer, but if it’s not, you can buy them cheap these days), some software (which, again, is probably already on the computer, or it will almost certainly come bundled with the modem), and a printer (or a connection to a network). That’s it. There are advantages to this arrangement above and beyond the savings in paper and toner: when you get faxes you actually want, you can print multiple copies, save them electronically (as PDF or JPG files, for instance), store them on the computer for future reference, and so on.
- Buy a fax machine with a caller ID block. Many modern fax machines include this feature, which will allow you to create a “blacklist” of numbers from which you will not receive faxes. Some will allow for a range of numbers, and some will allow you to block faxes from “private” (blocked) numbers. Of course, this also requires that you have caller ID on your phone line, and it requires you to manually enter some numbers (often a huge range of numbers), but it can be effective against some junk faxing.
Q: Is it worth it to sue over the loss of three cents in paper and toner?
Usually. First, it’s important to realize that the “three cents” needs to be multiplied by the several million faxes sent every year to give you the true scale of the problem. It’s like the movie Office Space, in which the main characters come up with a scheme to use a computer to steal fractions of a penny from each transaction that goes through a credit union. The individual thefts are too small to be noticed, but by the end of the week the fractions of pennies have added up to over $300,000.
Or, if you’re not a “big picture” person, you can always look at it this way: if you stick the guy who hijacked your fax machine with a bill for somewhere between $500 and $1,000 for every fax he sent you, is he likely to make that mistake again?
Q: Do people ever win these cases?
Yes. Some cases are easier than others, but if you can track down the sender you can almost always win. I have yet to lose a case in pursuing junk faxers. I have one client who pursues some of these cases on his own (in addition to the cases he refers to me), and he’s only lost one case out of over twenty he’s filed. I recently obtained a $74,500 default judgment on behalf of a client.
Q: What’s the hardest part of pursuing junk fax cases?
Before pursuing a junk fax case, you’ll have to track down the sender. This is often the most difficult part of the process, because the prolific fax broadcasters have become very good at hiding themselves. (Probably because they fear being hit with a class action suit like the $2.2 trillion—yes, that’s a “t”—suit that forced Fax.com out of business.) In general, the local advertisers are the easiest to pursue because they are easier to track down and serve. Most large-scale fax broadcasters have either moved out of the country and continued faxing (which is still illegal, but makes it more difficult to serve them), set up several layers of shell corporations to hide their identities, duped naive marks into acting as their agents, or done some combination of the above to avoid lawsuits.
The other potential problem is collecting once you’ve got a judgment. Collecting a judgment on an out-of-state defendant requires that you domesticate the judgment in the defendant’s home state (or country), and then somehow track down the defendant’s assets. In addition to hiding themselves, large-scale junk faxers have become adept at hiding their assets in shell corporations and overseas accounts. Again, this means that you are probably better off going after the local advertiser than the broadcaster because your hard work is far more likely to pay off in the end. While it’s more satisfying to go after the broadcaster, you still make life harder for the broadcasters by going after their customers. Once their potential customers realize that there are serious repercussions to spamming fax machines with junk, the fax broadcasters will stop having customers. (Besides, in many circumstances the local junk fax advertiser can turn around and sue the junk fax broadcaster.)
Q: Is this the kind of lawsuit I can pursue on my own or do I need to hire an attorney?
In many cases, you can handle (and are better off handling) these kinds of cases yourself in small claims court. There are some exceptions, however.
If you have several faxes, your potential claims could exceed the jurisdiction of the small claims court and you will have to pursue your case in District or Circuit Court. Under those circumstances, you’re better off hiring an attorney; unlike small claims court, the District and Circuit Courts follow the Rules of Evidence, which are difficult for lay-litigants to understand. (For that matter, there are many attorneys who have trouble understanding them.) If you have a great piece of evidence but can’t figure out how to get it admitted, it does you absolutely no good.
If your company is the recipient of the junk fax and your company is a corporation, you have no choice: you must hire an attorney if the case goes to District or Circuit Court; in Michigan, corporations must always be represented by an attorney in any court except small claims court. Neither shareholders, officers, nor employees are allowed to appear on behalf of a corporation (unless the shareholder, officer, or employee also happens to be a licensed attorney). Attempting to appear on behalf of your corporation is actually a crime: the practice of law without a license.
This brings me to another advantage of taking a case to District Court instead of small claims court: if the defendant is a corporation, it will have to hire an attorney. This added expense oftentimes spurs the defendant to settle more quickly. (After all, the corporation can pay $1,000 to settle your case, or it can pay the $1,000 in damages plus $1,000—or more—in attorney’s fees and court costs. Which would you do if you knew you were going to lose?) On the other hand, a corporation may be represented by an officer of the corporation in small claims court, and can not be represented by an attorney.
This gives you several things to think about. First, if your defendant wants to “play lawyer” you may be encouraging him to fight the case instead of settling if you take him to small claims court. (At the very least, you may be encouraging the defendant to just send someone in hopes that he’ll get lucky. After all, it’s not costing him anything more to fight you instead of settling, so what’s the downside?)
Second, if you are suing on behalf of your corporation, you’ll either have to take the time to show up in small claims court yourself or hire an attorney to pursue your case in District Court.
It may not be a bad idea to hire an attorney to pursue these cases, regardless. TCPA cases are not terribly difficult to win, and most attorneys who handle junk fax cases will handle them on a contingency, although it tends to be a rather high contingency compared to other kinds of cases. Still, if your attorney handles the cases for you on a 50% contingency basis, what this means is that you basically hand her a piece of paper and (hopefully) she hands you a check for $250 or more in a month or two. It’s hardly a bad arrangement for you.
Q: Do junk fax cases have to be brought in federal court, or can I pursue the case in state court?
The TCPA is an interesting piece of law in that it is possibly the only federal statute that gives exclusive jurisdiction to the state courts for handling a violation of federal law. What this means for you is that you must pursue your case in state court, and you are not even allowed to pursue it in federal court (unless there’s something called “diversity jurisdiction”, but that’s a whole other kettle of fish).
Q: Assuming the requirements have been met for a suit under both the TCPA and state law, under which law should I sue?
Both. The TCPA does not pre-empt state law, so if you can meet the requirements of both laws then you should sue under both. In Michigan, that means that each fax covered by both state and federal law is worth $1,000 minimum plus reasonable attorneys fees.
Q: What is the maximum that I can sue for?
That depends upon the fax. If you win a TCPA case, you’ll get a minimum of $500 per fax. The statute allows (but does not require) the judge to treble those damages to $1,500 per fax if you can show that the violation was “willful or knowing”. These are distinct terms of art; “willful” is defined under federal statutes as “the conscious and deliberate commission or omission of such act, irrespective of any intent to violate any . . . rule or regulation of the Commission . . . .” 47 U.S.C. § 312 (f)(1). The term “knowing” means that the defendant knew or should have known that its actions could violate the law. In plain English, this means that if the defendant intentionally and voluntarily did something that violated the statute—regardless of whether the defendant knew the act was illegal—or if the defendant knew that what he was doing was possibly illegal, then the judge has the option of trebling the damages. Therefore, the only situations in which the judge does not have the ability to treble the damages are those in which the defendant did not know he was sending an unsolicited fax: either he dialed the wrong number, he had a reasonable belief that the recipient actually wanted the fax (which would happen . . . when, exactly?), or the defendant did not know he was sending a fax (for instance, he was using a combination fax/copier and thought he was merely making a photocopy).
There is the possibility that you could sue over other violations, as well. Under the statute, the FCC is authorized to promulgate regulations that further govern the proper use of faxes. And, of course, when an administrative agency is authorized to regulate something, it will regulate it, so faxes are governed by both the TCPA and the Code of Federal Regulations (C.F.R.). These regulations, issued under the authority of the TCPA, include (among other things) requirements that faxes contain proper header information and both the telephone number and the name of the sender on the first page. So why do you care? Here’s why: if the regulations were issued under the authority of a specific subsection of the TCPA—47 U.S.C. 227(b), to be exact—then you can also sue for those violations separately. Thus, a fax that violates the regulatory rules is worth a minimum of $1,000, and possibly much more because each regulatory violation is a separate count worth an additional $500 minimum, and like statutory violations, the regulatory violations are subject to trebling if the judge finds that the violations were “willful” or “knowing”.
Now, here’s the part where it gets tricky: you cannot (as a general rule) sue for violations of regulations promulgated under any part of the TCPA other than subsection 227(b). So if the sender violates a regulation, but that regulation was promulgated under section 227(c), 227(d), 227(e), or 227(f) of the TCPA, you can’t collect additional damages for the regulatory violation. Unfortunately, the FCC has not gone out of its way to be clear about which regulations were promulgated under which sections of the statute. As a result, it is a matter of some debate within the legal community as to whether the header requirements were promulgated under 47 U.S.C. 227(b) (which would make them actionable) or 47 U.S.C. 227(d) (which would make them non-actionable). There are good arguments on both sides of this debate, and there’s very little direct legal authority on the point. (It should be noted that the bulk of the legal authority seems to support the idea that header violations are actionable; see McKenna v. Accurate Computer Svcs, Inc., 2002 TCPA Rep. 1135 (Colo. Dist. Feb. 24, 2002); Schraut v. Rocky Mtn. Reclamation, 2001 TCPA Rep. 1182 (Mo. Cir. Dec. 18, 2001); and Sterling Realty Co. v. Klein, 2005 TCPA Rep. 1353 (N.J. Super Mar. 21, 2005).) Thus, it’s impossible to give a clear answer on the maximum amount you can collect per fax under federal law. As a matter of practice, I usually include counts for header violations when they are present for two reasons. First, defendants in these cases often default, and in those circumstances it’s not even necessary to address the question of which subsection the regulations come from. Second, there is a reasonable chance of winning the argument that the regulations were promulgated under subsection b, and I’d rather make a good faith argument for further damages than just give up and not make the effort.
And, of course, there are state laws. If the sender violates both state and federal law in sending a fax, then the sender can be sued under both. However, the requirements for a suit under the state law are often different than those of the TCPA, so it is wise to check the statutes and caselaw and consult with an attorney.
Q: How do I go about pursuing a junk fax claim?
First, track down the offender. There are a number of ways of doing this, and there are many websites that list resources useful for this.
Second, see if you can get the offender to admit sending the fax. One trick I often use is to call the respond number and act like I’m interested in whatever it is the fax is promoting. I get into a nice chat with the defendant and usually get him to give up his name and location. And I record the whole thing; this is perfectly legal under both Michigan and federal law as long as one participant in the conversation is doing the recording. (In other words, as long as you are a participant in the call, you are perfectly free to record it.) (A note of caution: although the use of telephone lines across state boundaries should be the exact sort of “interstate commerce” that states can not regulate, some states have asserted that they can enforce their own laws about recording telephone calls against people in different states. So, better safe than sorry; if your junk faxer is out of state, it’s best to play it safe and not record the call.)
Junk faxers have caught onto this trick, however, and have started screening their responses and sending their faxes anonymously, forcing you to go through a third-party before talking to them. The idea is to make it more difficult to identify who it is you’re calling so you’ll have a harder time filing a lawsuit. (As an aside, this is also good circumstantial evidence you can use to show that these guys are “knowingly” violating the law.) Typically, the senders of these faxes either use a phony business name or don’t even bother to put a name on their faxes. Then, when you call the response number, you get an anonymous voicemail box. Only after you’ve left your name and number will a live human being contact you, and quite often that person is also a screener. You can beat them at their own game, however. Simply create a dedicated voicemail box at PrivatePhone.com (or a similar service) and when you call the response number on the fax, ask them to call you back at your voicemail box number. For each fax, use a unique name (never repeat the same name for different faxes) and write the name you used on the back of the fax; this will allow you to identify the fax to which the junk faxer is responding. (Make sure you also note on the fax the date and time when you called.) Then, when the junk faxer responds, not only will he knowingly leave you great evidence to present at a trial in the form of a downloadable message with a real contact phone number (and usually an admission that he is responding to the call about the fax), but you’ll usually get legitimate caller ID information. Frequently, they will call back more than once, giving you even more evidence to use later. (Note that this approach avoids the theoretical pitfalls of recording a telephone conversation with someone from out of state since the junk faxer knows he is leaving a recorded message.)
If at any time the junk faxer gives the name of his business, you should run a check for corporate filings through the office of the Secretary of State where the business is located. This can provide you with a great deal of useful information, including the names of the corporate officers, their addresses, and the names/addresses of their registered agent.
Third, send a demand letter. The letter should include a brief description of the statute(s) under which you are suing and a statement that you do not wish to receive any more faxes from the defendant (thus putting future faxes under the Michigan statute), state with specificity the time and date that the fax was sent, the fax number it was sent to, the amount you are demanding to settle the case, and the date on which you will file suit if the defendant does not settle the case. Also include a photocopy of the fax, and if you’ve drafted a complaint already, include that, too, to show that you mean business.
Fourth, if the defendant does not settle by the deadline (they usually don’t), trot down to the courthouse and file your case. Do this no later than a day or two after your deadline; it’s important to maintain your credibility.
Fifth, wait for an angry call from the defendant, accusing you of extortion and possibly making threats against you. If it’s convenient, tape this call, too, because more often than not the defendant will make excuses for sending the fax and in the process acknowledge (yet again) that he sent it.
Sixth, wait for the defendant to file an answer. Typically, the defendant will try to do this on his own instead of hiring an attorney. More often than not, the defendant will also try to lie and claim he knew nothing about the fax. Or (even better for you!) the junk faxer will simply fail to file any kind of answer at all within the time limit. If that happens, make haste to the court and ask the clerk to enter a default. Once that’s done you have, in essence, won your case and received a judgment for everything you asked for without even having to try the case.
Assuming the junk faxing defendant files a proper answer, the judge will usually (but not always) schedule a pretrial conference if you’re in District Court. Different judges handle these conferences differently; some do nothing more than set a date for trial. Others will order you to go into a conference room and try to settle the case right then and there. If the latter option is a possibility, you’ll want to bring your recording(s) of the defendant admitting he sent the fax. At some point, you should get the opportunity to play the recording for the defendant. Then you say, very politely, “How angry do you think Judge Smith will be when she hears this tape after you filed an answer under oath denying that you knew anything at all about this fax? My guess is that Judge Smith doesn’t like it when people think they can pull the wool over her eyes and she’ll be very inclined to award me my treble damages as well as court costs. Now, how about we add a few hundred dollars to my original settlement offer plus what it’s cost me to take things thus far and put this behind us?” Typically, that’s how you win the case.
If you’re in small claims court, the usual rules don’t apply and it’s more of a free-for-all. A good strategy here is to explain the law to the magistrate (who is not a judge, and is probably, but not necessarily, an attorney), state your case, and let the defendant deny that he ever had anything to do with the fax. Then play the recording for the magistrate. At that point, the defendant’s credibility is completely shot and nothing he can say will rehabilitate him. Now you’re just working on your treble damages, so make sure the magistrate understands the definition of “willful” and “knowing” in the context of TCPA law. Because the trebling is discretionary, the judge does not have to give you the extra damages even after you’ve proven a “willful” or “knowing” violation, but the fact that the defendant has tried to lie to the magistrate will certainly tip the scales in your favor.
Information for Potential Junk Fax Senders
Q: I received a fax from a company that offered to advertise my company by fax for only 3¢ per fax, and they said it was totally legal. So why are you trying to claim people can sue over this?
Because they can. And probably should. It’s not uncommon for junk fax broadcasters to make all kinds of claims about the supposed legality of what they are doing. They’ll claim that sending such faxes is legal, that if they add an “opt out” number you can’t be sued, or any number of other things. The fact of the matter is that they are simply lying to you; sending unsolicited advertisements by fax is illegal. Period.
Q: How can someone sue me for sending these faxes if I hired someone else to do it? The broadcaster is the one who actually sent the fax; I just hired them to do it.
Under the TCPA, both the advertiser and the broadcaster are liable for violations. Furthermore, when you hire someone to do something for you, they become your agent, and under the law of Michigan and most other states the principal (that’s you) is responsible for the acts of the agent (the broadcaster, in this case). And if agency theory doesn’t apply (which it probably doesn’t; an agreement to do an illegal act does not create a valid agency relationship, and sending junk faxes is illegal), then you and the broadcaster are simply joint tortfeasors who are both liable for the illegal act of sending the junk fax. In short, trying to hide behind someone else just won’t work.
Q: I bought some leads for my insurance company from a guy who turned out to be a junk faxer, and he got the leads from those faxes. Can I be sued?
Yes. Under the law of agency, the lead provider has become your agent and you are responsible for his actions even after the fact because you ratified his actions by accepting the benefit of those actions. And realistically, in this day and age, anyone who "buys leads" knows that these leads most likely came from junk faxes or email spam. You would be hard-pressed to convince a judge otherwise, even if your alleged ignorance provided a defense.
Q: The broadcaster signed an indemnity agreement, saying that they took all responsibility for sending the faxes, so I can’t be sued, right?
Wrong. You can still be sued; a contractual agreement between you and the broadcaster does not and can not affect the rights of an independent third party. You can still be sued, but you can make the broadcaster reimburse you. (Good luck in that, however.)
Q: Can I fax advertisements to my existing customers? A lot of them like to hear about sales.
Yes, there is a way you can legitimately send these faxes to existing customers who do not object. The Junk Fax Prevention Act of 2005 created a statutory “existing business relationship” (EBR) exception to the TCPA’s ban on junk faxes. For it to apply, you must already have an EBR with the recipient, you must have received that fax number voluntarily from the recipient in the context of the EBR (in other words, you didn’t just grab it from their website or a telephone book advertisement), your fax must display the required opt-out information clearly and conspicuously on the first page of the fax, and you absolutely must honor opt-out requests within a reasonable period of time (not to exceed thirty days). All of these requirements must be met for the exception to apply. If a single one of these requirements is missing, you will be liable for sending junk faxes.
A good alternative to sending unsolicited junk faxes is to offer a subscription-based fax newsletter or coupon-by-fax service that offers customers useful information or discounts on your products if they voluntarily and knowingly sign up to receive such faxes. Faxes sent to subscribers would not entail legal liability because they are not, by definition, “unsolicited”: the recipients have agreed to accept them. And the recipients might actually receive some benefit from them, thus improving your good will with your customers. Beware, however, that the burden of proof will be on you should someone decide to sue, so get all subscription requests in writing and keep them on file.
Q: A fax broadcaster contacted me and said they would only send faxes to people who had agreed to accept them. Can I still be sued if someone accidentally receives one of these faxes?
Yes. And I would strongly caution you to think twice about any broadcaster who says they are sending faxes only to people who “opted in”. How many people do you think would actually do that? Would you? Probably not. This is a common lie that fax broadcasters use to lull would-be customers into a false sense of security.
If you still want to send faxes through this service, there are a couple of things you can do to verify that only people who have consented to receive such faxes will be on the list. One is to provide the list yourself. The second is to request the list of numbers in advance so that you can send faxes asking the intended recipient(s) to verify that they have consented to receive such faxes, and then specifically list the faxes you have verified in the contract as the only numbers to which the faxes can be sent.
Q: I work for a non-profit. Can we still be sued?
Yes. A common scam run by fax broadcasters is to claim that non-profit organizations can’t be sued under the TCPA. That’s patently false; there is no such exemption.
Q: Can I send faxes soliciting charitable donations?
Yes. Even though there is no blanket exemption for non-profit organizations, there is an exemption for charitable solicitations. They key here is the TCPA’s definition of an “unsolicited advertisement”: “material advertising the commercial availability or quality of any property, goods, or services” (47 U.S.C. 227(a)(4)). A charitable solicitation does not meet this definition because it is not advertising “property, goods, or services”. Similarly, purely political speech (such as a fax advocating that a particular candidate be elected) is not subject to the TCPA’s ban on unsolicited advertisements by fax.
Q: So if charitable donations are excluded, can I just put a request for people to donate to my favorite charity at the bottom of the fax and be immune to lawsuits?
No. Not surprisingly, this has been tried and it failed. The presence of a request for a charitable donation does not exempt the fax if it also contains an advertisement for the “availability” or “quality” of “property, goods, or services.”
Q: I already got suckered into sending some of these faxes and now I’m being sued. What should I do?
The first thing you should do is contact an attorney. Usually, an attorney familiar with these kinds of cases will recommend that you offer the plaintiff a reasonable settlement: once you’ve been tracked down, it will be very easy for the plaintiff to prove your liability, so you should cut your losses.
You might also have the option of suing the broadcaster for indemnification. In other words, you can make the junk fax broadcaster reimburse you for some or all of your losses resulting from the sending of the junk fax. This is especially true if the broadcaster genuinely scammed you.
Links for More Information
The following sites contain useful information on junk faxes and the TCPA. Please note that the content of these sites is not in any way controlled or endorsed by Steven Shelton or Shelton Legal Services, PLLC; responsibility for the content of these sites lies solely with the owners of those sites.
- Junkfax.org. Originally started by Infoseek founder Steve Kirsch in May 2002, this site has become “the” place to go for information on junk faxes. Includes information on how to track down junk faxers, a list of attorneys who pursue junk fax cases, profiles of infamous junk faxers, and more.
- TCPATools.com. A repository of tools for assisting people in enforcing their rights under the TCPA, including applications for logging your calls and organizing transcripts, links to web sites with useful resources like reverse phone number lookups, user guides about various TCPA-related topics, and a TCPA wiki with plentiful information on frequent junk fax offenders.
- TCPALaw.com. In addition to being a specialized legal reporter subscription service (useful for researching TCPA caselaw), the site also includes free information on tracking down junk faxers, a list of books on the TCPA, and a list of attorneys who handle TCPA cases.
- JunkFaxes.org. A “sister site” of TCPALaw.com, Junkfaxes.org gives details instructions on how to file a complaint about junk faxes with both state and federal government agencies, gives an overview of junk fax laws for all fifty states, and includes a searchable database of junk faxes.
- Repel the Invaders. John “Doppler” Schiff’s personal accounts of the battle against junk faxers. In addition to being an informative and entertaining read, it also contains a searchable (if somewhat limited) database of known junk faxes with information on the people responsible for sending them.
- Fax Advertising: What You Need to Know. The FCC’s official page about junk faxes. Includes specific information on the federal regulations and instructions for filing junk fax complaints.
Steven Shelton is an attorney licensed in Michigan. Although his private practice is based in Fenton, Michigan, he handles criminal defense and general civil litigation cases statewide. You may contact him via telephone at 810-750-1420 or through this website.