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Summary of FCC Regulations:"Telephone Cold Calling Regulations"

This is a summary of the FCC regulations of telephone marketing regulations.

ISSUE:

The Federal Trade Commission issued final rules on Telemarketing Sales on August 16, 1995. This final rule implements the Telemarketing and Consumer Fraud and Abuse Prevention Act which was signed into law on August 16, 1994 to protect consumers from deceptive and abusive telemarketing. It places restrictions and prohibitions on most telemarketing calls to consumers. While cold calling activities are included in the definition of telemarketing, the rule includes an exemption for: Telephone calls in which the sale of goods and services is not completed, and payment or authorization of payment is not required, until after a face-to-face sales presentation by the seller.

Similar regulations are already in effect that implement the Telephone Consumer Protection Act of 1991. This law was enacted to address concerns over privacy rights of telephone customers and created new restrictions on certain telemarketing methods. In particular, the law prohibits auto-dailed and prerecorded voice messages to emergency lines, health care facilities, or cellular phones. These regulations went into effect Dec. 20, 1992.

NAR POSITION: NAR opposes burdensome regulations imposed on real estate professionals hindering cold-calling operations.

IMPACT ON REALTORS : REALTORS who participate in cold-calling or telemarketing are exempt from the provisions of this new rule. However, the telemarketing activities of state and local associations such as calls to solicit membership and to sell products will have to comply with the prohibitions and restrictions of the rule which include mandatory disclosures such as the identity and purpose of the call and the total cost of the product or service. The new rule prohibits misrepresentations of the products or services and places recordkeeping requirements of 24 months for all advertising and promotional pieces and sales transactions.

REALTORS are not exempt from the regulations embodied in the Telephone Consumer Protection Act and should pay attention to the following provisions:

LIVE COLD-CALLING RESTICTIONS:

  • Live telephone solicitations may not be made to residential telephone customers before 8:00 am or after 9:00 pm.
  • Person making the telephone solicitation must identify himself or herself, the name of the company, and a telephone number of the company.
  • Persons or businesses making live solicitations must do the following:
    • Implement procedures for maintaining a "do-not-call list" before initiating any telephone solicitations.
    • Develop written policy for maintaining a "do-not-call list" before initiating any telephone solicitations.
    • Train personnel engaged in telephone solicitations in accordance with business' "do-not-call" policy.
  • A residential telephone subscriber's do-not-call request shall apply to the particular business or entity making the call, and will not apply to affiliated entities unless the consumer reasonably would expect them to be includedgiven the identification of the caller and the product being advertised.
  • EXCEPTION - A company which has: (1) an established or prior business relationship; (2) permission or invitation, with or from a consumer may make live and prerecorded solicitations to that consumer, unless the consumer has previously terminated the business relationship by requesting not to be called.

AUTO-DIALED/PRE-RECORDED SOLICITATIONS:

A permanent injunction is in place enjoining the FCC from enforcing the following provisions relating to
auto-dialed/pre-recorded solicitations to residential telephone consumers.

  • Auto-dialed or pre-recorded message solicitations are prohibited to residential telephone customers unless solicitation falls within the following exceptions:

    (1) the company or person has an established or prior business relationship;
    (2) the company or person has permission or invitation, with or from a consumer;
    (3) the call is an emergency;
    (4) the call is not made for a commercial purpose;
    (5) there is no transmission of unsolicited advertisements; or
    (6) the caller is a tax-exempt nonprofit organization.

  • Auto-dialed or pre-recorded message solicitations are prohibited to emergency lines, health care facilities, paging & cellular phone numbers, unless the solicitation falls within the exception noted below.
  • No person may use an auto-dialer in a way that simultaneously engages two or more lines of a multi-line business.
  • All calls through an auto-dialer transmitting an artificial or prerecorded message, including calls placed to business numbers, must clearly state its identity at the beginning of the message, and must clearly state its telephone number and address during or after the message.

VIOLATIONS:

  • Consumer, state authorities, and the FCC may sue telemarketers for up to $500 in damages for violating the Telephone Consumer Protection Act or regulations. Telemarketers who have established practices implementing the Act and FCC regulations may present such compliance as an affirmative defense to alleged violations.

STATUS/OUTLOOK: The Telephone Consumer Protection Act was enacted in December 1991 and regulations implementing the law became effective in December 1992. At the time the law went into effect, the United States District Court for the District of Oregon issued a preliminary injunction which applies nationwide, enjoining the FCC from enforcing the provisions relating to auto-dialed/pre-recorded solicitations to residential subscribers. Since that time, the injunction has been made permanent and is pending an appeal by the FCC.

The Telemarketing and Consumer Fraud and Abuse Prevention Act, and the regulations implementing this act went into effect August 16, 1995

Information current as of: 07/07/98
One REALTOR Place Floor: Legal
One REALTOR Place Topic: Legal-Advertising

One REALTOR Place Category: H Other/Not Categorized
Source: NAR
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