At least one federal court ruled that an “established business relationship” can be created during a telephone call – and prevent further calls from violating the TCPA – even if that call is a “telephone solicitation” that violates the Telephone Consumer Protection Act. Charvat v. Southard Corp., No. 2:18-cv-190 (S.D. Ohio).


In Southard, the plaintiff alleged he received numerous telephone solicitations from the defendant.  The plaintiff did not object to a number of the calls or tell the defendant to stop calling.  In fact, the plaintiff engaged the defendant in conversation and asked about the defendant and its services.

The plaintiff filed a class action lawsuit and the defendant moved for partial judgment – arguing that the plaintiff’s inquiries into the defendant services created an “existing business relationship.”  The plaintiff argued that he was not really interested in the defendant’s services and instead was pretending just to obtain information to use for the TCPA lawsuit.

TCPA Restrictions

Under essentially identical provisions of the Telemarketing Sales Rule and the TCPA, it is unlawful to telemarket to phone numbers on the National Do-Not-Call Registry.

The only exceptions are where a called party gives prior express consent to phone solicitations from a company or has an established business relationship with it.  Under both the TSR and TCPA rules, an EBR exists based on a consumer having inquired about a company’s products or services within three months before the telephone solicitation, or a purchase or other transaction with the company within eighteen months.

Caveat:  State laws may vary.

What is an EBR?

An EBR is defined as “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, … on the basis of the subscriber’s inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been terminated by either party.”

How is an EBR Created?

An EBR can be created in numerous ways.

Generally, the Federal Communications Commission states that EBR inquiries are those from which “a consumer might reasonably expect a prompt follow-up telephone call regarding the initial inquiry or application.”

A consumer can become an “existing customer” by “an inquiry, application, purchase or transaction by the residential telephone subscriber regarding products or services offered by the telemarketer.”  A consumer’s inquiry into a telemarketer’s products and services is sufficient to create an EBR, even where a purchase, transaction or exchange of consideration has not occurred.

Court Rules in Favor of the Defendant

In determining that the plaintiff had established an EBR, the concluded that the relationship was a voluntary communication and that the plaintiff made an inquiry or application regarding the defendant’s services.

With respect to the former, the court did not buy the plaintiff argument that the communications were not voluntary because his number is on the National DNC Registry, or because he was only engaging with the defendant to discovery its identity.

The court noted that the plaintiff chose to communicate with the defendant, did not hang up and did not ask to have his number suppressed.  The court concluded that the plaintiff’s motivations were irrelevant.

After reviewing the call transcripts, the court also noted that the plaintiff asked numerous questions about the defendant’s services which created an EBR.  The plaintiff controlled how long the calls lasted and the calls ceased when the defendant received notice that the plaintiff no longer wished to receive them any longer.

Takeaway:  The context of a telephone call matters.  The EBR exception is not necessarily limited to relationships established prior to or during the first call.  An EBR can arguably be created during any call and the person making an “inquiry” does not necessarily be genuinely  interested in the seller and its services.  The Federal Trade Commission can and will initiate investigations and enforcement actions for telemarketing violations, including, but not limited to, violating the National Do Not Call Registry, initiating unlawful pre-recorded messages, failing to honor DNC request, failing to make required oral disclosures, assisting and facilitating abusive telemarketing acts and practices,

Richard B. Newman is an FTC defense attorney at Hinch Newman LLP.  Follow FTC attorney on Twitter @ FTC defense lawyer.

Informational purposes only. Not legal advice. State law may vary. May be considered attorney advertising.