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Why Fax Machines Are a Legal Goldmine

Ron Livingston David Herman And Ajay Naidu Take Their Ultimate Revenge On Their Dreaded Nemesis ThRon Livingston David Herman And Ajay Naidu Take Their Ultimate Revenge On Their Dreaded Nemesis Th
Ron Livingston, David Herman And Ajay Naidu take their revenge on their nemesis, the office fax machine in a scene from "Office Space". Photograph by Getty Images

Fax machines are nearly extinct, but fax spam is turning them into money making machines.

The number of fax-related lawsuits has grown significantly in recent years as plaintiffs increasingly use consumer protection laws that allow them to receive $500 each time they get an unsolicited ad via fax. Just 44 lawsuits related to fax spamming were filed in 2009, but that number swelled to nearly 5,000 last year, according The Wall Street Journal.

One attorney who spoke to the Journal has filed more than 1,000 fax spam cases since 2003.

In 1991, Congress passed the Telephone Consumer Protection Act, which lets people file lawsuits against companies that send them unwanted ads on their fax machines. The separate Junk Fax Prevention Act, passed in 2005, went further by setting damages of at least $500 per unsolicited fax.

The intent is to keep people from being inundated with ads through their fax machines and missing legitimate faxes. The ads also use up ink and paper, causing fax owners financial harm.

The Journal notes that class-action lawsuits can push damages well beyond the $500 level and into the millions of dollars for companies that send spam to large numbers of people. If a court finds intent to spam consumers, damages can reach $1,500 per fax, according to the Journal.

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Fax machines have been used since the 1960s and quickly became one of the more popular ways for companies and individuals to quickly send documents. While email, online document storage services, and other tools have largely rendered fax machines obsolete, they’re still used in the legal world and play an important role in the health care and hospitality industries.

According to the Journal, some recent fax spam lawsuits have involved ads sent for everything from medical supplies to air conditioners. However, in most cases, the lawsuits are settled out of court, with companies paying several hundred dollars per fax to the plaintiffs.

But some cases have had more dramatic results. In January, for instance, laser-treatment company Cynosure agreed to a $16 million fax-spam settlement, according to the Journal. Meanwhile, medical group Advanced Care Scripts last year agreed to pay more than $9 million in a similar case.