What is Established Business Relationship (EBR)

In the world of performance marketing and lead generation, there has been much confusion about the meaning the term “Established Business Relationship” (EBR) and how it relates to the statutes and rules governing outbound and inbound marketing calls, including the Telephone Consumer Protection Act (TCPA) and the FTC’s Telemarketing Sales Rule (TSR).

The Role of EBR in the TCPA

The TCPA, enacted in 1991, is a federal law that restricts telemarketing calls, auto-dialed calls, prerecorded calls, text messages, and unsolicited faxes.  The TCPA also prohibits marketing calls to numbers on the National Do-Not-Call Registry (“National DNC”) unless the call falls into one of two exemptions: (1) the Prior Express Written Consent (PEWC) exemption; and (2) the Existing Business Relationship (EBR) exemption, each of which is discussed below.

The PEWC Exemption:

The TCPA allows marketing calls and texts to numbers on the National DNC if the caller has obtained valid PEWC of the called party. This means that the called party has given their explicit consent, in writing, to be contacted by that caller. The consumer’s express agreement must be in writing and must include the number to which calls may be made and the consumer’s signature, which may be electronic if the agreement is reached online.

The EBR Exemption:

Under the EBR exemption, a company may place a telemarketing call to a number on the National DNC if the called party has done either of the following:

• Purchased, rented, or leased the company's goods or services, or entered into a financial transaction with the company within 18 months preceding the call; or
• Inquired about or applied for the caller’s goods or services within three months preceding the call.

Note that the EBR exemption only applies to live calls that do not play a prerecorded message. Otherwise, armed with a valid EBR, a company can call a consumer with a DNC-listed number, provided the relationship falls within the defined 18-month or 3-month period.

PEWC vs EBR

Although both PEWC and EBR serve as legal exemptions to the general prohibition against calling numbers on the National DNC, there are important differences between the two exemptions, especially when it comes to using an Automated Telephone Dialing System (ATDS).

For example, the TCPA prohibits using an ATDS to call any cellular number, regardlessof whether the number is on the National DNC.  The PEWC exemption also covers ATDS calls to cellular numbers, while the EBR exemption is expressly limited to DNC violations. If a number is not on the National DNC, the EBR exemption becomes irrelevant.

In addition, the PEWC exemption also applies to prerecorded calls, as long as the caller follows the specific rules necessary to obtain PEWC to place such calls. The EBR exemption is strictly limited to live agent calls.

Practical Implications: The Case of a Website Form Submission

To understand how these rules play out in practice, consider the case of a website form submission for an insurance quote. If the form submission page is properly configured in accordance with FCC and FTC rules, it will generate a record sufficient to serve as PEWC to contact whoever submitted the form. This allows the use of an ATDS to contact the number, regardless of whether it is on the DNC.

However, if the form submission page lacks an essential element necessary to establish PEWC, it might still suffice to establish an EBR, which would cover a live agent call placed in response to the form submission, as long as the number is on the National DNC, and the call or text is placed within three months of the form submission date.

Does the EBR Exemption Apply to Text Messages?

The regulations enforcing the TCPA do not reference marketing texts specifically, but the FCC has ruled that texts are “calls” as far as the TCPA is concerned. And the EBR exemption only allows companies to place LIVE telemarketing calls to numbers on the DNC and does not cover calls placed using an ATDS or that feature a prerecorded or artificial voice, because the TCPA requires PEWC for those calls regardless of whether the called number is on the National DNC.

Likewise, the EBR exemption likely covers hand-placed texts to numbers belonging to customers with whom the sender has an existing business relationship but would NOT cover messages sent using an ATDS.

Conclusion

Understanding the TCPA and its implications for marketing calls and texts is crucial for businesses to ensure compliance and avoid hefty fines. The key lies in understanding the nuances of the PEWC and EBR exemptions, and how they apply to different scenarios, such as the use of an ATDS or the status of a number on the National DNC.

       

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