Recently I was reviewing client’s compliance on sending advertisements via fax.  Because the pharmacy industry is still extensively utilizing fax machines (and e-faxes), I decided to remind how to properly send promotional materials through fax.

First of all, a recent case prompted my compliance review. Last year, a doctor filed a legal action against a pharmacy who advertised its services and products by fax. Dr. Katz brought a class action against Benzer pharmacy for violating the Telephone Consumer Protection Act (“TCPA”).

The TCPA forbids sending unsolicited advertisement for goods or services via facsimile without the recipients’ prior express invitation and to recipients with whom the sender does not have an established business relationship. The TCPA requires that even if you send fax advertisements to those with whom you have an established business relationship, the fax must include an opt-out notice. In order to comply with the TCPA’s Opt-Out Notice requirements, each fax advertisement must include all of the following:

• Clear and conspicuous language on the first page stating that recipients may opt out from receiving any further fax communication;
• A toll free phone number (or any other no-cost method) that the recipient may use to submit an opt-out request.

The TCPA provides for statutory damages in the amount of $500 – $1,500 per violation.

In the Benzer Pharmacy case, the pharmacy was fax-blasting advertisements of its services to many prescribers with whom it had no prior contact or established business relationship (red flag No. 1). In addition, its faxes had no opt-out language (red flag No. 2).  As a result, the pharmacy is now in the middle of a very expensive litigation (to remind, this is a class action with many complex legal issues).

To avoid similar problems, review how and to whom you send faxes, and whether any of your faxes could be classified as “advertisement.” Does your fax (if it is an advertisement) contain an opt-out notice on the first page of the fax? If so, does the notice list a toll-free number to opt out. Do you send faxes only to the established business contacts?

California bonus: If you are located in California, even more stringent rules apply (no surprises here). California law requires an express permission to fax advertisement even if you are faxing to your established business contacts.