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FCC Issues Rules for Fax Advertisements

The Federal Communications Commission (FCC) recently amended its rules governing fax advertisements, as required by the Junk Fax Prevention Act of 2005. The new rules will take effect 90 days after publication in the Federal Register.


The Telephone Consumer Protection Act of 1991 (TCPA) prohibits sending an unsolicited fax advertisement without the recipient’s prior express consent. For many years, marketers sent fax ads to existing customers based on an inferred established business relationship (EBR) exemption. Following the FCC’s 2003 order to eliminate the EBR exemption for fax ads, Congress responded with the Junk Fax Prevention Act of 2005 (JFPA), which codified an explicit EBR exemption for the transmission of fax advertisements and directed the FCC to issue new rules to reflect the EBR exemption. (Please see our previous alerts on commercial faxes for more details.)

Established Business Relationship

The TCPA, as amended by the JFPA, prohibits sending unsolicited advertisements by fax to businesses and residences unless:

  1. there is an established business relationship (EBR) or the recipient has given express, prior consent to receive fax advertisements;
  2. the sender provides certain contact information and an opt-out notice; and
  3. the sender obtained the fax number in statutorily prescribed ways.

The new rules define an established business relationship as “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a business or residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.”

A marketer can send fax advertisements to those with whom it has an EBR (if other requirements, discussed below, are met) unless the recipient terminates the EBR exemption. A recipient can terminate the EBR exemption by opting-out of future fax advertisements. The FCC stated that an opt-out request should be honored even if the sender continues to do business with the recipient.

This definition also provides that an EBR can be formed by an inquiry, application, purchase or transaction as long as it relates to products or services offered by the sender. Not all inquiries meet this standard. For example, the FCC stated that an inquiry about store location or hours or visiting a website without taking additional steps to request information would not form an EBR.

Senders bear the burden of proving the existence of an EBR and should therefore maintain records, such as purchase agreements, sales slips, inquiries and applications. The FCC specifically declined to limit the duration of the EBR exemption but plans to review this issue in the future.

The rules state that the EBR exemption is available only to the entity who had the voluntary two-way communication with the recipient that established the EBR and does not extend to affiliates of such entity.

Obtaining a Fax Number

Federal law requires that any person sending a fax advertisement under the EBR exemption must have obtained the recipient’s fax number within the context of the EBR or must ensure that the recipient voluntarily agreed to make the number available in a directory, advertisement or website available to the public. (There is an exception to this requirement, discussed below, if the EBR was established prior to July 9, 2005.)

Examples of obtaining a fax number voluntarily include the recipient providing the number on an application, information request, or membership renewal form, as well as providing the number orally over the phone, on company letterhead or through a web site maintained by the sender. A sender has the burden of showing that the recipient provided the fax number voluntarily within the context of the EBR.

Regarding the second option for obtaining a fax number, the FCC stated that a fax number obtained from the recipient’s own directory, advertisement or web site is considered to have been voluntarily provided by the recipient unless such directory, advertisement or web site says that the recipient does not wish to receive unsolicited advertisements at the listed fax number.

If a sender obtains fax numbers from third parties who compile numbers from sources such as membership directories or Internet listings, the sender must take reasonable steps to verify that the recipient consented to have the number listed. Such verification can be done by calling or emailing the recipient.

Note that if the sender had an EBR with the recipient prior to July 9, 2005, and the sender also possessed the fax number before July 9, 2005, then the sender does not need to demonstrate that it obtained the fax number in one of the two ways mentioned above.

Notice of Opt-Out and Contact Information

All unsolicited fax advertisements must contain a notice on the first page of the advertisement that the recipient can opt out of receiving future unsolicited fax ads from the sender. The opt-out notice must be clear and conspicuous and must be separate from the advertising copy or other disclosures. This notice must contain a domestic telephone and fax number as well as at least one cost-free mechanism for sending an opt-out request.

Examples of cost-free mechanisms include a website address, email address, toll-free (telephone or fax) number, or a local telephone number (as long as the recipient would not incur long distance or other charges for calling). If a sender uses a web site address, the first page of the site must describe the opt-out procedure clearly and conspicuously.

All faxes (not just unsolicited ads) must also include the sender’s identifying information on the top or bottom margin of every transmitted page, or on the first page of the fax. Each fax must clearly identify (1) the date and time the fax was sent, (2) the registered name of the company sending the fax, and (3) the telephone number of the company sending the fax or the sending fax machine’s number.

The Opt-Out Request

The opt-out mechanism must be able to receive opt-out requests 24 hours a day, 7 days a week. A marketer must honor an opt-out request within the shortest reasonable time, not to exceed 30 days from the time the request was made. Note that an opt-out request on behalf of a business fax machine applies to everyone who receives faxes at that fax number.

An opt-out request does not expire and need not be renewed. Subsequent permission (written or oral) to receive fax advertisements will terminate a previous opt-out request.

The sender (i.e., the business on whose behalf the fax is transmitted) is responsible for complying with the opt-out notice requirements and for honoring opt-out requests, even if the sender retains a third party to accept opt-out requests and the fax contains contact information for the third party.

Permission or Invitation to Receive Fax Advertisements

If a sender does not have an EBR with a recipient, unsolicited fax advertisements may not be sent without the recipient’s prior, express permission or invitation. The JFPA amended the definition of “unsolicited advertisement” to allow such permission to be oral as well as written. The sender has the burden of proving it received permission and should therefore maintain records or recordings that demonstrate the recipient’s written or oral permission.

An application that requests a fax number can include a clear statement that by providing a fax number the individual or business is agreeing to receive fax advertisements. In all instances, a sender cannot send a request for permission by fax unless the sender has an EBR with the recipient.

Transactional Faxes

The FCC order clarifies that faxes whose purpose is to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into are not advertisements. Examples include a receipt or invoice, account balance information, loan transaction documents, travel itineraries, and a subscription renewal notice to a current subscriber. In order for such messages to fall outside the definition of unsolicited advertisements they must relate specifically to existing accounts and ongoing transactions. Even messages that promote free goods or services that are not purely transactional are advertisements. Additionally, surveys that serve as a pretext to an advertisement are subject to the unsolicited fax rules.

Keep in mind that many states also have laws governing fax advertisements and some of these laws are more restrictive than federal law. Also, the issue of whether state fax laws apply to interstate faxes is unclear, although industry groups such as the Direct Marketing Association have taken the position that state laws that purport to restrict interstate faxes are preempted by federal law. A court recently ruled that California’s more restrictive fax law, that does not contain an EBR exemption, does not apply to interstate faxes, but this issue has not been resolved. Please contact us if you have questions about state or federal fax laws.

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.