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.