If your business has a fax machine, please keep reading, because--surprise, surprise--the feds now have a new law governing junk faxes that may have a big impact your business. The Junk Fax Prevention Act of 2005 (JFPA), which went into effect on July 9, 2005, has many new requirements or "surprises" that dictate how even "routine" faxes must be sent to your customers.
So for your financial benefit and business education, here's a list of the biggest surprises for businesses courtesy of the new federal junk fax law:
Surprise #1: The definition of "junk fax" includes more faxes than you'd think. While no business would ever consider its faxes to customers to be junk faxes, the new law defines junk faxes very broadly. A junk fax under the JFPA is an "unsolicited advertisement," meaning "any material advertising the commercial availability or quality of any property, goods or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise."
In other words, if you send out a fax announcing you've just added a new product or service, that could be considered a junk fax under the JFPA.
Surprise #2: Having "EBRs" is now critically important when it comes to marketing your business via fax. Even if your faxed message can be considered a junk fax under the new law, you are still allowed to send unsolicited faxes to anyone with whom your business has an "established business relationship," or EBR.
An EBR is defined as "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party." You should consult with your business attorney if you're unsure whom you're allowed to send unsolicited advertisements via fax to.
Surprise #3: Your fax cover sheets must now include "opt out" information. Even if your business has an EBR with a customer or prospect, the JFPA now requires that on the first page of every fax solicitation you send, you must tell the recipient how to "opt out" of receiving future fax solicitations from your company.
The JFPA's requirements for the opt-out notice are pretty extensive. The opt-out notice must:
- be "clear and conspicuous and on the first page of the" fax;
- indicate that your failure to comply within the shortest, reasonable amount of time with any opt-out notice sent by a customer will be a violation of the law;
- contain the "domestic contact telephone and facsimile machine number" for the recipient to transmit any opt-out notice request;
- contain a "cost-free mechanism" that the recipient can use to send the opt-out notice; and
- permit the recipient to opt out "at any time on any day of the week" or, in other words, 24/7.
Surprise #4: Noncompliance with the new junk fax law will be costly. The JFPA allows anyone who has illegally received a junk fax to sue for and recover $500 to $1,500 or more per junk fax violation. And for those with a litigious mind, it may be surprising to learn that the new law allows class action lawsuits and even small claims court lawsuits to be filed.
Surprise #5: State laws governing junk faxes may also still apply. Just when you thought you'd enough surprises, here's the last one: The new federal law doesn't supersede current or future state laws that govern junk faxes. To be on the safe side, be sure to check the laws of your state and any state into which you send faxes before hitting the "Send Fax" button.
The lesson to be learned from this month's column? Don't be caught off-guard by the new junk fax law. The JFPA also has other provisions that may be applicable to your business. To prevent any additional surprises, visit this site to view a PDF version of the complete text of the Junk Fax Prevention Act of 2005.
Chris Kelleher is an award-winning small-business advisor and attorney. He's also a sought-after speaker and the founder and resident legal guru of The Law Firm For Businesses, a boutique law firm that helps business owners creatively solve their business and legal problems.