JUNK FAXERS UNDER SEIGE
JUNK FAXERS UNDER SEIGE
2005-05-06 at 10:29:00 am #9182
Junk faxers under siegeThey’re pushing for a more lenient lawmai, 2005
When Gary Nappe is awakened at 4 a.m. by the ring, bleep and buzz of incoming
faxes advertising $199 Cancun vacations or two-for-one pizzas, he doesn’t get
mad. He gets even.
Junk faxes have been illegal since Dec. 20, 1992, the day the Telephone
Consumer Protection Act (TCPA) was enacted. But plug a fax machine into any
phone line these dozen years later, and it’s only a matter of time before the
offers roll in. “Insurance, mortgage refinance, car dealerships, rent a car,
restaurants — and it’s all junk,” Nappe said.
Nappe, who runs a Web consulting business from his Pompano Beach, Fla., home,
turns his junk faxes over to Fax Recovery Systems Inc., a Fort Lauderdale
company that sues the senders under the TCPA and shares the spoils if it wins.
So far, Nappe has collected $200. That doesn’t begin to cover the lost sleep
or wasted paper, toner and fax time, he said, but it is “a kind of sweet
The TCPA allows junk fax recipients to sue the advertiser responsible for the
message (and, if different, the fax service that sent it) for damages of $500
per fax. Damages may be tripled when the statute has been violated “willfully or
But few people know about the law, said Joel Jones, a partner in Fax Recovery
Even those aware they can sue rarely do, said Francis Salazar, director of
litigation for Consumer Crusade Inc., a Denver firm that also sues junk faxers
on behalf of others. “The process is incredibly involved, so few people bother,”
Enter companies like Jones’ and Salazar’s. Junk fax recipients “assign” their
claims to these firms, and when there are enough to make pursuing the claims
worthwhile, the consolidator hires a lawyer and sues. A successful outcome — a
judgment or settlement — nets the assignor a cut. Consumer Crusade pays $25 per
fax. Fax Recovery pays $100.
But the growing popularity of TCPA lawsuits, coupled with consternation over
a change in Federal Communication Commission rules, has businesses pressing for
legislation that critics charge will “open the floodgates” on junk faxing.
The biggest junk faxers, called “fax blasters,” can spew out hundreds of
thousands of unsolicited advertisements a day. In one recently litigated case,
the defendant was estimated to have sent 2.5 million junk faxes per month, each
costing the recipient 7 cents. Blasters typically charge $1,000 per 10,000
faxes, and some even assure doubtful clients that what they do is legal.
The FCC at one time interpreted a verbal go-ahead or an “existing business
relationship” as sufficient permission to fax unsolicited advertisements. In
2003, troubled by the rising number of junk fax claims, it ruled that commercial
faxes require prior written permission from the recipient.
That rule was to take effect in January. The effective date has been
postponed to July 1 as a coalition of businesses and associations lobbies
Congress to enshrine the business-relationship exemption in law.
Under the Junk Fax Prevention Act, junk faxes would remain illegal. But where
there is a legitimate business relationship, it becomes the fax recipient’s
responsibility to decline the faxes. Businesses would have to keep and honor
opt-out lists, much as telemarketers were supposed to in the days before the
national do-not-call list.
The legislation received a favorable recommendation from the Senate Committee
on Commerce, Science and Transportation on April 14. With bipartisan support and
backing from the business community, its chances of passage appear good. Last
year, the House and Senate each passed similar bills, but could not agree on a
Critics contend the Junk Fax Prevention Act will supply illegal faxers with a
ready-made defense against TCPA lawsuits, effectively gutting the antijunk-fax
provisions of the law.
“Only in Washington can they name a law the exact opposite of its intent,”
said Steve Kirsch, a Silicon Valley entrepreneur who runs Junkfax.org, a Web
site spearheading opposition to the measure. “If this bill becomes law, it will
essentially turn your fax machine into a printing press for junk faxers.”
Perhaps worse, Kirsch said, are the doors it throws open to legitimate
advertisers: “Any business you’ve ever had any contact with at all will be able
to fax you, legally.”
Despite the widespread use of e-mail, the fax machine is a staple of business
communication, said Jade West, senior vice president for government relations at
the National Association of Wholesaler-Distributors in Washington, D.C., and
director of a group called, in another twist of Washington logic, the “Fax Ban
Pharmacies, doctors and hospitals fax prescriptions and medical records.
Unlike e-mail, documents transmitted by fax are legally binding, making them
indispensable to many professionals, including attorneys and real estate agents.
Keeping track of signed permissions would pose an expensive logistical problem,
“If I send out a fax notice to my trade association members about a
conference that charges a $3 fee, that is by definition an unsolicited fax and I
must have written permission from each and every member I fax it to,” she said.
Junk fax foes agree that the FCC went too far in requiring written
permission, but say industry is going too far to correct it. Kirsch has
suggested amending the TCPA to make verbal permission sufficient.
West rejects this idea, in part because business owners fear opening
themselves to TCPA lawsuits. “What if one person in an office gives permission
but another turns our fax over (to a consolidator)?” she asked.
Trish Dill, owner of a Denver-area employment firm, contends that’s just what
happened to her. She’s being sued by Consumer Crusade for more than 50 allegedly
In an interview, Dill said she sent the faxes from her own office, not a fax
blaster. She described the recipients as longtime clients. If Consumer Crusade’s
$75,000 suit is successful, she said, it could be the end of her business, “all
over a few faxes.”
Dill calls Consumer Crusade and similar companies little more than litigation
mills that prey on small-business owners’ ignorance and fear.
“They’re just out to make money,” she said. “They hit you with a demand
letter for $500 per fax and most people just pay because they’re scared to
death, but I’m fighting.”
Consumer Crusade’s Salazar, however, said all 50 of Dill’s accusers insist
they’ve had no prior dealings with her. He added that the faxes collected by his
company generally represent less than 1 percent of any faxer’s output.
Both Fax Recovery Systems and Consumer Crusade say that after fees for
lawyers, investigators and other expenses, they usually collect less money than
their clients. Salazar said Consumer Crusade runs in the red.
Even so, Jones, of Fax Recovery Systems, admits that the little guys,
especially those who fax from their own machines, are easier to track down and
hence to sue.
Salazar agreed. “The big guys are hard to get because they hide behind layers
of false identity, and when you do get to them, they have lots of money to spend
on lawyers because junk faxing pays,” he said.
And, said Jones, whether a junk fax comes from the local carwash or a
multinational company, it costs the recipient the same in money and grief.
Nappe, for his part, has little sympathy for small-business owners who plead
ignorance or hardship when confronted with their junk fax misdeeds.
“I’m a small-business person, too,” he said. “I don’t ask them to send faxes
that I don’t want, late at night and at my expense, and I don’t send any to