Anti-Fax Law Exemption Bill Passes House Committee

Federal legislation that would exempt existing business relationships from anti-fax laws, including existing agent-client relationships, has advanced in the House and has been introduced in the Senate said the Independent Insurance Agents & Brokers of America.

Introduced by Rep. Fred Upton (R-Mich.), Energy and Commerce Committee Ranking Member John Dingell (D-Mich.), and a number of members from both parties, the Junk Fax Prevention Act, H.R. 4600, would reverse a June 2003 Federal Communications Commission (FCC) rule and exempt all commercial faxes to recipients with whom an existing business relationship exists. The bill was approved by the House panel last week.

Separately, Sens. Gordon Smith (R-Ore.), Ernest Hollings (D-S.C.), George Allen (R-Va.) and John Sununu (R-N.H.) introduced a companion bill, S. 2603, by the same title in the Senate.

According to IIABA, if the legislation becomes law, it will provide an important exemption for businesses and associations like the IIABA that need to send commercial faxes to individuals with whom they do business. The bill also protects consumers by creating an opt-out mechanism for those who wish to be removed from fax lists.

“This legislation creates a crucial exemption that will help the Big ‘I,’ other associations and their members conduct their work more efficiently and effectively while still protecting the wishes of consumers,” said Patrick O’Brien, Big ‘I’ Washington representative and grassroots coordinator. “This is a very positive development, because without the exemption, independent agencies, associations and other businesses that rely on faxes as a vital means of communication with their clients could face increased operating costs and other serious economic repercussions.”

The IIABA stated that without this exemption, all commercial-in-nature faxes would require expressed written permission from the recipient for distribution, and violators of the rule could face fines of $11,000 per incident.

Under the terms of the bill, faxes of a commercial nature would be allowed without the written permission of the recipient if there is an existing business relationship and a “clear and conspicuous” opt-out selection is presented on the cover sheet.

The bill does not establish a timeline for existing business relationships, but it does establish rulemaking authority for the FCC to determine within three years whether to limit the duration of existing business relationships. It is expected that if the commission limits the timeframe, the rule will permit relationships that were in existence over the previous five to seven years at the time of the fax communication.