The National Do-Not-Call Registry is a list of phone numbers from consumers who have indicated their preference to limit the telemarketing calls they receive. The registry is managed by the Federal Trade Commission (FTC), the nation’s consumer protection agency. It is enforced by the FTC, the Federal Communications Commission (FCC), and state officials. The registry was created in 2003 to offer consumers a choice regarding telemarketing calls. The do not call provisions of the Telemarketing Sales Rule (TSR) cover any plan, program or campaign to sell goods or services through interstate phone calls. This includes calls by telemarketers who solicit consumers, often on behalf of third party sellers. It also includes sellers who are paid to provide, offer to provide, or arrange to provide goods or services to consumers. Federal fines can reach $11,000 per violation and additional state fines may also be levied.
The National Do-Not-Call Registry covers intrastate telemarketing calls under the FCC’s rules. You can find information on the FCC’s regulations at www.fcc.gov/cgb/donotcall/.
Key Do-Not-Call rulings that affect the real estate industry may be found here.
In addition to the compliance information found in the Legal Section of NYSAR.com, members may also access the association's vendor partner program with PossibleNOW. More information about this DNC QuickCheck product is available on the member benefits page.
PossibleNOW has conducted compliance webinars for NYSAR members. These webinars are available in the NYSAR Media Center.
These articles are provided to the New York State Association of REALTORS by PossibleNOW. The views and/or opinions expressed in these articles, legal or otherwise, are those of the author and are not necessarily the views and/or opinions of the New York State Association of REALTORS.
A Reflection on Compliance Issues in 2010 and the Challenges Ahead for 2011 - This year brought about two significant changes in consumer privacy preference laws. The first proposal involved prerecorded telemarketing calls. The FCC published a Notice of Proposed Rulemaking (NPRM), which proposes new restrictions regarding artificial or prerecorded telemarketing calls (known as robocalls) under the TCPA. The proposed rule would more closely align the FCC's telemarketing rules to the Federal Trade Commission (FTC) Telemarketing Sales Rule (TSR) and could provide for a more stringent express consent standard for dialing mobile phones.
State Holidays May Impose Calling Restrictions - The holiday season is upon us and this festive time of the year also brings special calling time restrictions regarding Do Not Call compliance. Telemarketing on federal and state holidays is forbidden in several states. Although the federal rules allow for calling from 8 a.m. to 9 p.m. seven days a week with no holiday restrictions, your calling activity must adhere to the most restrictive state prohibitions.
Rules Governing the Use of "Free" in Advertising and Telemarketing - If your telemarketing scripts or advertisements use the word "free" (or similar words) to promote your product of service offerings, you should be aware of the Federal Trade Commissions's rules regarding this commonly used practice. The FTC considers improper use of this four letter word as deceptive and unfair to consumers.
Strategies for Reducing Consumer Complaints - If your business makes outbound telemarketing calls to consumers, including to web inquiries or referrals, your calls can generate consumer complaints. Even if you are certain that 100% of your outbound calls are compliant, you may still have to deal with the onerous task of answering state and perhaps federal inquiries. Our research indicates that roughly 70% of consumer complaints are about compliant calls, but the consumer is assumed to be right and you must prove that your call was compliant.
Compliance in the Global Marketplace: Thinking Globally, Acting Locally - Businesses increasingly operate on on international scale. Your success depends on your ability to operate profitably in diverse geographic markets and comply with the laws of the various countries into which you market products and services. You may face the challenges of coordinating with many people, in multiple jurisdictions, while complying with the distinct rules on data protection and privacy law, data transfer and the local marketing laws of each country.
Call Data Audits; An Imperative to Building a Defendable Position - Every day companies may place hundreds of thousands of outbound calls that are in violation of Do Not Call laws, wireless rules, or corporate or seller-specific requirements. Most companies are unaware that the calls were in violation of DNC laws. This is because they believe that the upstream processes are all compliant, so if everything works as designed, there should be no cause for concern.
How Do You React in a Crisis? - Toyota. BP. You? It may seem like you have nothing in common with these two global and recently tainted brand names, but have you considered the impact one negative event could have on your firm and professional reputation?
Understanding the Requirements for Prerecorded Message Delivery - The delivery of prerecorded messages has long been a popular method of contacting consumers. Prerecorded messages allow telemarketers to contact consumers much more efficiently than live calls and at a much lower cost. These messages, however, are not nearly as popular among consumers.
Does Your Company Meet the Red Flags Rules Requirements? - Any company that regularly extends or merely arranges for the extension of credit is subject to the Red Flags Rule. Under the Red Flags Rule, companies must design and implement a written identity theft prevention program that is designed to detect, prevent, and mitigate identity theft in connection with the opening of a "covered account" or any existing covered account.
FTC’s New Privacy Framework: What Could This Mean for Telemarketers? - At the American Teleservices Association’s (ATA) summit this week, FTC Director David Vladeck spoke about current issues of importance at the FTC. Among other things, Director Vladeck addressed the FTC’s concern regarding the perceived ineffectiveness of the current privacy framework. His comments made it clear that changes are likely.
The FCC's Recent Proposed Rule: What it Could Mean for Your Business - The Federal Communications Commission issued Notice of Proposed Rulemaking on January 22, 2010. We had anticipated the official posting of the proposed rule in the Federal Register. On March 22, 2010, the Federal Communications Commission (FCC) officially posted its proposed rule (CG Docket No. 02-278; 10-18) in the Federal Register to revise rules under the Telephone Consumer Protection Act (TCPA). Public comments are due on or before May 21, 2010.
Are Your Calls Compliant at the Time of Dial? How to be 100% Sure! - Over the years we have audited millions of our clients’ dial records to determine if calls were compliant at the time of dial. Our audits include Do Not Call (including available grace periods), wireless, EBR exemption rules, and call abandonment compliance. We can also audit total attempts to the same number.
Why Compliance Training is Critical - An effective compliance training program can contribute to the success of a business. Well-trained employees have more confidence and are better prepared to achieve corporate tenets even when explicit guidance is not available. Companies that invest in compliance training gain the additional benefit of risk reduction through compliant employee performance and demonstrated ongoing efforts to comply.
MSCM Mobile Marketing Compliance - This is the second part of our 2-part series regarding mobile marketing compliance. Last month’s article focused on SMS. This month we turn our attention to MSCM. Again, the two primary mobile marketing delivery mechanisms are Short Message Service (SMS) and Mobile Service Commercial Messages (MSCM). While both of these technologies deliver messages to mobile devices, the regulatory requirements are vastly different.
A First Look at SMS Mobil Marketing Compliace - Mobile marketing efforts in the US are increasing exponentially. Even so, US marketers’ use of the mobile marketplace lags behind many other countries. As technologies become available to enable more economical and widespread use of mobile marketing campaigns, enforcement of laws is likely to become more prevalent. We will address SMS compliance in this month’s newsletter and MSCM next month.
Tips on Responding to a State Attorney General's Inquiry If you have ever prepared a response to an Attorney General’s investigative inquiry, you may question how to properly position your compliance efforts. Unlike federal investigations, Attorney General inquiries may be based on a single consumer’s allegation of violations of Do Not Call or telemarketing laws. Our experience has shown that there are several ways that you can improve your compliance position, even if the consumer’s allegation is true.
Test Your Knowledge of These Do Not Call Laws During our years of providing consumer privacy preference compliance services, we have encountered many unique requirements, especially at the state level. The launch of the Canadian Do Not Call List further added to the complexity and confusion. For this month’s article, we’d like to point out some of these unique requirements as well as some other interesting compliance facts.
Consumer Contact Attempts: How Many are Too Many? Instituting reasonable dialing attempt guidelines will greatly reduce your risk of dealing with consumer complaints. This should be a part of an overall strategy to reduce complaints through proactive measures including scripting modifications.
Translating Regulatory Requirements into Operational Compliance - Over the years our privacy preference compliance consultants have performed assessments of a wide array of companies from Fortune 500 sellers to 25 seat service providers. Regardless of the company's size, many are challenged to implement the operational aspects of compliance. While attorneys and telemarketing compliance professionals can provide information about regulatory requirements, many companies struggle with determining how to translate those requirements into compliant operations.
Key Do-Not-Call Rulings
FCC issues order on FSBOs and expired listings - February 23, 2005
On February 18, 2005, the Federal Communications Commission (FCC) issued an Order addressing certain issues raised in NAR's Petition for Reconsideration of the Commission's 2003 Telephone Consumer Protection Act (TCPA, a.k.a. Do-Not-Call) rules. Specifically, NAR requested that the FCC clarify that calls to "For Sale By Owner" (FSBO) and expired listings fall outside the scope of the Do-Not-Call rules.
The FCC did clarify that calls to FSBOs by real estate professionals representing a potential buyer are not a telephone solicitation, so long as the purpose of the calls are to discuss the potential sale of the property to the represented buyer. Unfortunately, the FCC declined to exempt from the Do-Not-Call rules calls to expired listings and to FSBOs for the purpose of offering services to residential subscribers (homeowners).
The FCC also denied exemptions of Do-Not-Call rules that were requested by Independent Insurance Agents, the Direct Marketing Association and other professional associations. In issuing the Order, the FCC made a strong statement indicating its unwillingness to consider further exemptions of entities or calls from the Do-Not-Call rules.
NAR has lobbied the FCC on this issue since the Do-Not-Call rules were finalized in July 2003. Our advocacy efforts included a Call for Action (which generated about 7000 letters to the FCC), high-level meetings with NAR leadership and FCC Commissioners (including most recently, a meeting with Al Mansell and Chairman Powell), and securing a letter from Rep. Fred Upton (R-Mich.), Chairman House Subcommittee on Telecommunications and the Internet, to Chairman Powell supporting our position.
FCC scrubbing rule in effect as of January 1, 2005
On December 30, 2004, the FCC published a final rule amending its do-not-call rules requiring telemarketers to scrub their telephone lists against the National Do-Not-Call Registry at least every 31 days and maintain records documenting the process. This rule provision went into effect January 1, 2005. You will recall that in March of 2004, the FTC finalized a similar rule pursuant to a congressional mandate. The effective date of the FTC's monthly scrubbing rule is also January 1, 2005.
Federal Trade Commission releases proposed rates for industry access to Do-Not-Call Registry - April 2004
The Federal Trade Commission has approved the publication of a notice of proposed rulemaking in the Federal Register that would amend the Telemarketing Sales Rule to revise the fees charged for industry access to the National Do-Not-Call Registry. As detailed in the notice, which will be published shortly, the FTC is accepting comments on the proposed fee changes. Under the new fee structure proposed by the commission, the annual fee for each area code of data accessed would become $45, and the maximum amount that any entity would be charged – for access to 280 area codes of data or more – would become $12,375. The proposed rulemaking would continue to allow all entities accessing the Registry to obtain the first five area codes of data for free, and would still allow those entities exempt from the Registry’s requirements to obtain access at no charge.
The FTC is accepting public comments on the proposed rulemaking until June 1, 2004. Pending public comment, the new fee schedule will go into effect on September 1, 2004.
Copies of the documents mentioned in this release are available from the FTC’s website at http://www.ftc.gov/
FTC amends Telemarketing Sales Rule regarding access to national Do-Not-Call Registry; revision requires telemarketers to 'scrub' call lists every 31 days
As required by the Consolidated Appropriations Act of 2004, the Federal Trade Commission in February announced a proposal to amend the "Do Not Call" provisions of the Telemarketing Sales Rule (TSR) to require that telemarketers subject to the Rule access the National Do Not Call Registry and purge numbers on the Registry from their call lists every month, instead of every quarter as the Rule originally required. The Commission today announced that the final amended Rule provisions will become effective on January 1, 2005, with telemarketers required to "scrub" their lists against the Registry at least every 31 days.
In its February notice of proposed rulemaking, the FTC requested comments on the proposed amendment's use of the phrase "thirty (30) days" rather than "once a month," the phrase used in the statute. In the notice, the Commission suggested the "thirty (30) days" language as a way to make the requirement clearer, and to achieve Congress' intent more effectively, which was to shorten from quarterly to monthly the interval for telemarketers and sellers to purge registered telephone numbers from their calling lists - in effect reducing the time consumers have to wait, after registering, for unwanted telemarketing calls to stop.
The FTC received 186 comments in response to the notice of proposed rulemaking from consumers, consumer groups, businesses, and trade associations. The Commission considered these comments in determining what the final rule would be. The Commission chose the interval "thirty-one (31)," as opposed to "thirty (30) days," to provide sellers and telemarketers the maximum time allowable under the Appropriations Act to simplify the process of scrubbing lists on a monthly basis. The Commission set the effective date of the Rule as January 1, 2005, to enable the Commission to modify the Registry system to account for increased download traffic and logic changes, and enable businesses, to the extent necessary, to implement new systems and procedures to accommodate the more frequent scrubbing interval. All of the public comments are available for review on the FTC's Web site.
To date, consumers have registered 58.4 million phone numbers on the Do-Not-Call Registry.
Copies of the notice of the final amended Telemarketing Rule and accompanying statement of basis and purpose are available from the FTC's Web site at http://www.ftc.gov/
and also from the FTC's Consumer Response Center , Room 130, 600 Pennsylvania Avenue, N.W. , Washington , DC 20580.
Do-Not-Call Registry Declared Constitutional - February 26, 2004
A federal appellate court has considered the constitutionality of the federal Do-Not-Call Registry ("Registry").
The United States Court of Appeals for the Tenth Circuit consolidated the appeals of various challenges to the Registry. Click here to read a summary of the earlier cases. As background, the Registry is administered by the Federal Trade Commission ("FTC"), pursuant to its telemarketing rules. The Federal Communications Commission ("FCC") also uses the Registry to enforce its telemarketing rules. The Registry allows consumers to stop commercial telephone solicitations by registering their phone number(s) with the FTC. Telemarketers are prohibited from calling anyone whose telephone number is in the Registry unless they meet certain criteria, impacting the cold-calling activities of real estate professionals. As of this writing, consumers had registered approximately 50 million phone numbers. Click here to learn more about the telemarketing rules.
The main issue for the court to consider on appeal was whether the First Amendment of the United States Constitution prohibits the government from creating the Registry. One court had ruled that the Registry impermissibly regulated telephone solicitations based on the content of the telephone solicitation, and so declared the Registry unconstitutional.
Looking at the Registry rules, the court found that the rules only regulated commercial speech and so the court applied a test developed in a previous US Supreme Court decision know as Central Hudson test to evaluate the constitutionality of commercial speech regulations. Under Central Hudson , a regulation must satisfy a three-part test in order to be found constitutional. First, the government must assert a substantial interest as the basis for its regulation. Second, the regulation must directly advance the stated governmental interest, and must regulate no further than the stated governmental interest. Finally, the regulation must be "narrowly" tailored to accomplish its stated objective.
Applying Central Hudson to the Registry rules, the court found that the government's stated interest of protecting the residential privacy of consumers and also protecting consumers from fraudulent and/or abusive solicitation were substantial governmental interests. Therefore, the Registry satisfied the first prong of Central Hudson.
Second, the court found that the Registry rules advanced the government's stated interests. The court found that the Registry allowed consumers to block a significant number of telephone calls that the legislative record showed consumers had found to be annoying, namely unsolicited telemarketing calls. Further, the court found that because the Registry is an "opt-in", it only stops solicitations to consumers who have chosen to not receive these calls.
The challengers to the Registry argued that the Registry was unconstitutionally underinclusive, since it only allowed consumers to bar commercial solicitations but not charitable or political solicitations. The court rejected this argument, determining that an under inclusive challenge can only succeed if the underinclusiveness of the legislation made the regulation so irrational that it failed to advance the stated governmental interest. Here, the Registry was directed at the types of calls which met the government's stated interest in creating these rules. Since the Registry rules were not irrationally underinclusive, the court rejected the underinclusiveness challenge to the Registry and found that it passed the second prong of Central Hudson.
Finally, the court ruled that the Registry was narrowly tailored to accomplish the government's stated goals. Since the Registry did not regulate telephone solicitations generally but rather only solicitations to individuals who had stated their preference to not receive such calls, the court determined that the Registry did not attempt to overegulate solicitations and thus was narrowly tailored. Thus, the Registry passed the all parts of the Central Hudson test and so the court ruled that the Registry was constitutional.
The court considered the remaining challenges to the Registry before the court. First, the court considered whether the fees charged by the Registry for access to more than five area codes constituted an impermissible tax on speech. The court stated that while the government may not impose a tax on the enjoyment of free speech rights, the Registry fees were permissible because they were an incidental fee designed to help the government defray the administrative costs of legitimate government regulations.
The next challenge the court considered was whether the FCC violated administrative procedure rules in its process of creating the established business relationship exception to the Registry by failing to examine the anticompetitive effects of such an exception. The rules permit telephone solicitations to existing clients and customers, and extends for up to 18 months after the end of a transaction. If a consumer makes an inquiry to a business, the business can call the person for up to three months after the inquiry. The court found the FCC had requested comments on this subject during its rulemaking procedures, and had considered different options in creating this exception. Since the FCC did not act in an arbitrary manner in creating the established business relationship exception, the court found that the FCC had complied with the administrative law requirements.
Finally, the court considered whether the FTC had the power to administer and create the Registry. The court found that not only did the FTC have the requisite statutory authority to take such actions, subsequent actions by Congress explicitly granting the FTC such authority removed any doubt about the FTC's authority. Thus, the court upheld the Registry against the various challenges brought against it.
Mainstream Marketing Serv., Inc., v. F.T.C. , Nos. 03-1429, 03-9594, 03-6258, 03-9571, 2004 WL 296980 (10th Cir. Feb. 17, 2004). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].
Sept. 29, 2003
NYSAR legal counsel issues do-not-call advisory
The Law Offices of Michael T. Wallender, NYSAR's legal counsel, has issued the following advisory regarding the federal Do-not-call Registry and rules.
The coexistence of FCC authority, as well as the express authorization of the FTC which moots the Oklahoma federal court decision, complicates the legal landscape. The FCC rules are in effect, while the FTC rules are enjoined by the federal court in Colorado. It did so on a First Amendment basis, which would appear equally pertinent to the FCC rules, but in a new federal suit in the 10th Circuit federal appellate court, a stay of the FCC was denied. Given the existence of a private right of action under the FCC statute/rules, the counsel of prudence is to avoid being the test case. Licensees will proceed at their peril if they ignore the national Do-Not-Call Registry, as well as exacerbate a sensitive subject and risk a "private right of action" if they initiate a call to a homeowner on the list without an established business relationship, personal relationship, or express written consent.
Caution is advised.
We understand that NAR is expected to provide its recommendations and those will be provided to the membership as soon as possible.
NYSAR has prepared a sample office policy for compliance with the new rules as well as an overview of the do-not-call rules (Please note that the free Adobe Acrobat reader is required to view these documents. It may be downloaded from www.adobe.com.)
FCC Chairman Michael K. Powell issued the following statement before yesterday's Do-Not-Call Legislation signing ceremony with President George W. Bush: "The FCC will enforce its do-not-call rules against telemarketers that have obtained the do-not-call list from the FTC, beginning Wednesday. The FCC rules complement and expand on those of the FTC. FCC rules have not been disturbed by recent court cases. Last week, the 10th Circuit Court of Appeals refused to block the rules pending review—as the telemarketing industry had urged—citing the strong public interest of leaving the rules in place. The Commission intends to continue to administer and enforce its rules to the fullest extent possible as the litigation proceeds. The commission remains committed and determined to defend the choices of the American people."