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Troubling legal trend emerging in ads sent to facsimile machines

November 24, 2010

Dealers who send unsolicited advertisements to telephone facsimile machines should be aware of an 11-yearold federal law that could leave them liable to lawsuits and even class action suits. The Telephone Consumer Protection Act makes it illegal to use any telephone, fax machine, computer or other device to send an unsolicited ad to a fax machine.

Recipients of such faxes can recover the greater of $500 or their actual damages for each offense, and treble damages if it is determined that the statute was willfully and knowingly violated. Moreover, the federal act does not require consumers to advise fax-based telemarketers that they do not wish to receive a solicitation prior to suing. In recent months, several cases have been allowed into the court system as class action suits, thereby increasing one's exposure from $500 for an individual suit to potentially thousands of dollars, depending on how many faxes were sent.

Dennis O'Keefe, the CATA's legal counsel, said dealer's should not transmit advertisements via facsimile, telephone or even e-mail. "If your dealership is considering such advertising or is directly involved with it, get the facts on how it might impact your dealership," O'Keefe said.

"Moreover, never assume that any and all claims arising out of advertising violations will be defended or indemnified by insurance. "Universal Underwriters Group warns that there are many different classes and categories of these lawsuits and also many different terms, conditions and exclusions that can come into play. "There are also classes of consumer protection violations that will not allow insurance companies to indemnify or even defend."