Telemarketing Rules

Telemarketing Rules You Should Know About

If you are in sales, it is important to understand the telemarketing rules governing your industry to make sure that you don’t accidentally wind up violating one and slapped with a fine.

There are several laws that govern telemarketing including The Federal Trade Commission’s (FTC) Telemarketing Sales Rule (TSR), the Federal Communications Commissions’ (FCC) Do Not Call Registry, and the Telephone Consumer Protection Act.  Many of the guidelines overlap and in the past year some of the rules have tightened, for example, with calls made to cell phones.

Telemarketing Rules for Cell Phones

Previously, if you had an existing relationship with a customer, you could call their cell phone.  This was considered implied consent.  Basically, if they bought something from you they obviously would want to hear from you again, right?  Apparently not.  Enough consumers complained that the legislation was changed to require companies to secure “express written consent” prior calling someone on their cell phone.  The written consent can be in paper or electronic form and can be revoked by the consumer at any time.

Charging a Customer Over the Phone

If you are selling a product over the phone and collecting payment for it, you must receive “express informed consent” from the consumer prior to charging their card. This means that you must disclose the fact that the card is about to be charged and the exact amount of the charge itself. If you have their financial information prior to placing the call, you still must confirm the account they want to use, billing address and the dollar amount that will be charged now or in the future.

Telemarketing Rules for Caller ID

When placing a call, you need to make sure that your phone number, and when possible your name, shows up on the caller ID.  Do a test call to make sure everything shows up correctly and avoid a potential violation.

Live Transfer

In order to reduce abandoned calls, if you are using an auto dialer it must transfer the call to you or another live agent within two seconds of someone answering the phone.  This is to reduce the number of dead air calls and hang-ups.

Robocalls

Before a business can call with a pre-recorded message, it must have consent from the consumer to make that specific type of call.  For example, if you want to reach people with pre-recorded message, they must specifically approve that call.  This is the strictest form of calling regulation apart from making calls to cell phones.  The exception is if you are making an informative call to a customer, for example, an airline calling to say that the flight was delayed.

No list of cold calling rules would be complete without a reminder to scrub your lead list against the Do Not Call Registry.  It is also wise to have a policies and procedures manual, even if you are a solopreneur, that states the steps you are taking to stay in compliance with cold calling regulation.  Make sure that the entire staff reads and signs this document on an annual basis.  If you accidentally call someone on the DNC Registry or make another violation, this will demonstrate that it was accidental, and you have been trying to stay in compliance.

The NDNCR – What You Should Know

What You Should Know About the Do Not Call Registry as a Telemarketer

If you are making sales calls you are probably familiar with the National Do Not Call Registry.  As a telemarketing company you are required to comply with specific provisions of the TCPA regulation, including scrubbing your lead lists against the DNC registry.

Here is what you need to know about the Do Not Call Registry and staying in compliance.

  • The registry was created in 2003 and is monitored by the Federal Trade Commission (FTC).
  • People can list their home phones and personal phones on the registry.  Business numbers are typically not listed but it is smart to check in case a small business is using the owners cell phone.
  • Calls covered under the DNC are those with the purpose of selling something.  This includes people selling something directly or arranging a sale for someone else.
  • If you are conducting a survey and trying to sell something on the same call, it is covered under the DNC guidelines. If you want to make survey calls without worrying about the guidelines, gather the data you need and make a separate sales call.
  • In order to have use the established business exemption, a consumer needs to have bought something from you within the past eighteen months.  If they have applied for something from your company, but not purchased, you can call for an additional three months.

Exceptions

Political calls, charities, survey calls, and companies that a consumer has an existing relationship with do not need to abide by these provisions.  If a charity is calling to raise money they are not bound to the DNC rules, however, if a third party is calling on behalf of that charity than they have to abide by the rules and stop calling if the consumer requests it.

If you are a for profit company you can also gain exemption from the rules by doing the following:

  • Providing Information.  If your calls are for informational purposes you do not have to follow the DNC guidelines.  For example, an organization calling to inform people about a community event.
  • Business to Business Calls.  B2B sales calls are exempt from the DNC guidelines, making it easier for telemarketers to contact businesses rather than consumers. Just make sure not to call personal cell phones, as they could be registered.
  • Receive Written Permission.  If you want to call or text consumers that may be on the DNC you need to obtain  prior written permission to do so.  This can be a traditional document or electronically signed.  Prior written consent should be obtained whenever possible as you build your calling data base because it gives you the most calling and texting flexibility.

Remember to follow these guidelines in order to stay in compliance and avoid receiving unnecessary fines.  A recommended best practice is to create a procedural manual that lists out your policies and procedures for how to check numbers against the do not call list, what you do when someone asks to be taken off of your list, and how you train employees on regulation updates.  This binder should include a training log that employees have to sign, certifying they have read and understand the compliance.  Even if you are a small organization, this binder could prevent you from getting a fine if you make an accidental mistake.

Telemarketing Rules for Debt Relief Companies

The Bureau of Consumer Protection Business Center has released a guide on telemarketing rules for debt relief companies.

There are basic provisions about cold calling that apply to all industries  For example, you must scrub your lead list against the Do Not Call Registry and must have a policy in place for how to follow these guidelines.  As of October 2013 companies are also not allowed to send text messages without prior written consent.

While many of these rules are the same across all industries that are specific, additional provisions that apply to debt relief companies.  These regulations have been created to protect consumers against what the government feels are deceptive or misleading practices.

The major difference with these new telemarketing rules is that it ALSO applies to calls you receive – not just outbound calls you place.

Here is what you need to know:

  • You must make specific disclosures before selling people your services. There are specific things that you have to disclose.  This includes how long it will take for the consumer to see results, the basics of what you will be doing for them, what they have to pay, how working with you will negatively impact their credit, and information on dedicated accounts. Basically, the consumer needs to be informed about how your business works, the steps along the way, and the good and bad results that they will experience.
  • You must be truthful about your services. You cannot make false or unsubstantiated claims about your services.  This is common sense but necessary to specifically mention it.
  • You can’t charge or collect upfront fees.  Until you have settled their debts or somehow negotiated a different payment scenario, you cannot collect fees from the customer.  If you negotiate each debt individually, you can collect a fee each time.  The caveat is that you cannot front-load any payments. If you are having customers make a payment of fees and to the creditor that goes into a specified account their are set rules for how that has to be handled.

The best way to protect yourself from violating telemarketing rules is to stay up to date on changes and create an internal policy that is regularly shared with your employees.  Make sure that employees are trained on the fact that telemarketing rules now also apply to in-bound calls they receive.  Keep a log where each employee signs that they were trained, or received a refresher course, on a specific day.  This is a good best practice for any company that is engaged in telemarketing.  The penalties are less severe for companies that can prove they are trying to abide by the regulation but may have had a rogue employee.

If you are providing outsourced telemarketing services make sure that your contract specifies who is liable for any violations, who would pay the fees, and if either party is required to provide legal support in the event that charges are brought.  It is important for each party to abide by the telemarketing rules and specific contracts can protect you in the event of an accidental violation.

Definitions Under the TCPA

Definitions Under the Telephone Consumer Protection Act (TCPA)

 

If you are in sales, marketing, or a telemarketer by trade it is important to understand the rules found within the Telephone Consumer Protection Act (TCPA) in order to avoid accidentally violating them. TCPA Violations can lead to fines or even losing the ability to telemarket.

Here is what you need to know:

Telemarketing Defined

The regulations consider a telemarketing call to be one made by advertisers to offer or sell products or services.  If you are simply providing information it is not telemarketing.  For example, an airline telling you a flight has been delayed is not considered telemarketing.

An Autodialer is a Machine or Software That Helps You Make Calls

When you have to pick up the phone and personally dial every call, it can take a lot of time and slow you down.  Minutes are wasted dialing, waiting for someone to answer, and getting busy signals.  An autodialer can automatically call people for you and give them a recorded message or connect you once they have answered.  While this is a more efficient calling method it is also more highly regulated.   If your autodialer delivers a pre-recorded message it is considered a robocall, the most highly regulated form of telemarketing.   Previously, if a consumer had an existing business relationship with you a robocall would be acceptable.  Now, there must be prior written consent in order to avoid a violation.

Text Messages Are Regulated by the TCPA

Recent regulation has made it more difficult for telemarketers to contact people on their cell phone.  Now, if you want to send a text message you need to have prior written consent from the consumer to do so.  This cannot be considered implied consent but must be clearly spelled out in writing.  You can have consumers sign their consent on a traditional piece of paper or electronically give their consent.  This is a big change because in the past an existing business relationship fulfilled this requirement. The only exception is text messages for the purpose of informing someone, rather than selling them something.

Do Not Call Registry 

It is important to always scrub your call list against the national Do Not Call Registry.  Remove anyone that is on the registry from your list.  If you contact someone that was not registered, but wants to be removed from your list, you must do so immediately.  It is wise to have a written policy in place for how you remove people once a request has been made.

Violating TCPA Regulations

If you violate the TCPA guidelines you could be fined anywhere from $500 to $1,500 per call, message, or text.  This is not per day but per call.  If you make 100 calls that violate these regulations that could be a $150,000 fine.  Many companies have gone out of business due to these penalties.

Stay up to date on regulation and create policies and procedures to protect yourself and your company.  Taking the time to ensure that you are in compliance could save you money and headaches down the road.