Q: I am considering a unique marketing program involving faxing materials to existing and prospective customers. Is there any limitation on my use of the fax process to market my company?

A: Yes, there are statutory limitations and requirements on issuing faxes to third parties.

On July 9, 2005, Congress enacted the Junk Fax Prevention Act of 2005 (“JFPA”). The JFPA amended the telephone consumer protection act to codify an exemption permitting businesses to send unsolicited faxes to persons with whom they have an established business relationship (“EBR”).

An EBR is defined as a prior or existing relationship formed by a voluntary twoway 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. In order to prove the EBR defense, you should retain records reflecting your business relationship with the prospective recipients of your communication.

If you have no business relationship, then you can still send the fax if you have obtained the recipient’s fax number from a directory, advertisement or Web site, to which the recipient voluntarily discosed its fax number. Accordingly, unless you can meet one of the above two conditions regarding a prospective recipient, you should not send an unsolicited fax to that recipient.

The JFPA also requires senders of unsolicited facsimile advertisements to provide recipients with an opt-out mechanism. The opt-out notice must be clear and conspicuous, and on the first page of the advertisement state that the recipient may make a request to the sender not to send any future faxes, that failure to comply with the request is unlawful, and include a cost-free mechanism to allow the recipient to exercise the optout right which must be available 24 hours a day, 7 days a week. If you receive an opt-out request, you must honor such request within the shortest reasonable time not to exceed 30 days.

The statute provides for recovery of damages, including a minimum of $500 per fax, which can be trebled if “willful.” There are attorneys specializing in bringing these suits, so if you want to avoid unnecessary litigation you must take steps to ensure compliance with the statutory requirements. Other cautionary steps include reviewing your insurance coverage, to avoid purchasing lists of fax numbers, and educating your employees. As always, your final fax marketing program should be reviewed and approved by knowledgeable counsel.

Richard A. Goetz received his juris doctorate, cum laude, from State University of New York at Buffalo School of Law. His practice includes not only all types of business litigation, but also representation of country clubs in turnover disputes with developers and all club-related legal matters following completion of turnover. He has tried cases regarding contract disputes, corporate rights, enforcements of notes and security agreements, real estate, bankruptcy, construction disputes, Uniform Commercial Code claims, probate and intellectual property litigation, and product liability matters. The above article is for informational purposes only and should not be considered legal advice as to any specific matter. You should not act solely upon this information without consulting legal or other professional advice.