May 15, 2020

In the Rush to Adapt, Businesses Cannot Turn a Blind Eye to Compliance

by Chris Wager, Mac Murray & Shuster LLP

The COVID-19 pandemic has presented most businesses with a stark decision: adapt or risk closing your doors permanently. Many have been able to quickly adapt their operations to face the new reality. Restaurants have adjusted menus and implemented online ordering, auto dealers have established contact-free purchase and delivery processes for transactions, and sellers have moved from in-person or door-to-door sales models to outbound telemarketing calls and text messages. Impressively, changes that normally might have taken months to plan and execute have been implemented on the fly over a week or even days.

However, in the rush to implement these new business practices, companies may have jumped out of the proverbial frying pan and into the fire. These new practices may not have been fully vetted from a compliance standpoint, and legal risks and potential class action liability could be lurking in the shadows.

As businesses begin to realize unexpected efficiencies or improved processes born out of necessity, changes that were originally thought to be temporary may become permanent adjustments to their business model. In looking at these trial-by-fire changes, a business would be wise to consider the associated compliance issues.

In particular, the emerging trend is for businesses to rely less on face-to-face interaction with consumers, as they move toward telephone and text messaging-based communications. If you find yourself in this circumstance, you should ensure that your new or expanding calling/texting campaigns consider the following:

  • Whether you have obtained the proper consent for the call/text;
  • That you are complying with state and federal do-not-call lists, and to the extent that you are not scrubbing against those lists, that calls/texts are properly exempt from those requirements;
  • Whether you are required to register as a telemarketer in each state that you intend to call or text; and
  • That you have a robust process in place to honor consumers’ requests to not be called.

Also remember that email communication with your customers presents its own set of regulatory schemes, including the federal CAN-SPAM Act, which imposes certain requirements on commercial emails, as well as state and federal unfair or deceptive acts or practices laws. Any corresponding changes to the collection, use and sharing of consumers’ personal information must also be evaluated. Even businesses with robust compliance systems in place may see their existing policies and procedures strained by the loss of control brought by a more decentralized workforce. Previously maintained safeguards to ensure compliance with telemarketing restrictions when employees are dialing from company equipment and enterprise systems may not be sufficient when employees are making these calls from their cellular or home phones. While businesses have faced daunting and unanticipated challenges in recent months, there will unquestionably be more to come as they return to a “new normal.” What has been constant is the regulatory oversight of business practices. There should be no expectation that regulators, consumers or courts will turn a blind eye to violations, even unintended ones. A proactive review and audit of your post-COVID compliance plan can help ensure that your business remains on solid ground.


In looking at these trial-by-fire changes, a business would be wise to consider the associated compliance issues.