What Is the TCPA (Telephone Consumer Protection Act)?
The TCPA, or Telephone Consumer Protection Act, is a 1991 federal law that restricts telemarketing calls, auto-dialed calls, pre-recorded calls, text messages, and unsolicited faxes. For real estate investors -- especially wholesalers who cold call sellers and send SMS blasts to property owners -- the TCPA is one of the most important compliance laws to understand, because violations can result in penalties of $500 to $1,500 per call or text.
The law was originally written to address robocalls and junk faxes, but its scope has expanded through court interpretations and FCC rulings to cover many of the outreach methods that real estate investors rely on. If you're calling or texting people who haven't asked to hear from you, the TCPA applies to you.
Key TCPA Rules for Real Estate Investors
- No auto-dialed or pre-recorded calls/texts to cell phones without consent. If you're using an auto-dialer or sending bulk SMS, you need prior express consent from the recipient. For marketing messages, you need prior express written consent.
- Do Not Call (DNC) lists: You must scrub your call lists against both the National DNC Registry and your company's internal DNC list. If someone asks you to stop calling, you must add them to your internal list immediately.
- Calling hours: No telemarketing calls before 8 AM or after 9 PM in the recipient's time zone.
- Caller ID: You must transmit your phone number and, when possible, your name. Spoofing caller ID for telemarketing is prohibited.
- Opt-out mechanism: Every marketing text must include a way for the recipient to opt out (e.g., "Reply STOP to unsubscribe"). You must honor opt-outs immediately.
TCPA Penalties
$500 per violation for negligent violations (you didn't know you were breaking the law). $1,500 per violation for knowing or willful violations. Each call or text is a separate violation. Sending 1,000 texts to people who didn't consent could result in $500,000 to $1,500,000 in liability.
TCPA lawsuits are filed by individuals (often represented by specialized attorneys who work on contingency) and by the FCC. A cottage industry of "professional plaintiffs" exists -- people who intentionally keep their numbers on DNC lists and monitor incoming calls/texts to file TCPA lawsuits. These individuals are called TCPA litigators, and they are a real threat to real estate investors who do phone outreach.
How Wholesalers Stay Compliant
- Manual dialing: If you're personally dialing each number one at a time (not using an auto-dialer), the TCPA's auto-dialer restrictions don't apply. But DNC rules still do.
- DNC scrubbing: Before any outreach campaign, scrub your list against the National DNC Registry (subscription available at donotcall.gov) and check for known TCPA litigators.
- Written consent for SMS: If you're sending marketing texts, obtain written consent first. A webform opt-in, signed document, or text keyword opt-in (e.g., "Text YES to receive deal alerts") qualifies.
- Honor opt-outs immediately: When someone says "stop," "remove me," or "don't call again," add them to your internal DNC list and never contact them again.
- Record keeping: Maintain records of consent, DNC requests, and your scrubbing process. If you're ever sued, documentation is your defense.
TCPA and Skip Tracing
When you skip trace a property owner and get their phone number, that does not constitute consent to call or text them. Skip tracing gives you the ability to reach someone, but the TCPA governs whether you're legally permitted to do so. You can manually dial the number (within calling hours, after DNC scrubbing), but you cannot auto-dial or send bulk SMS without consent.