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Cutting Edge TCPA SolutionsPresentation by attorney Eric Allen – 5/13/15
DNC.com Overview
• Recognized leader in compliance
• Over 30 Billion scrubs over 12 years with no violations
• Automatic scrubs for TCPA wireless ID
• Full coverage for VoIP and DNC scrubbing
• Compliance Guide-The industry resource for regulatory info
• New Exclusive Litigator Scrub solution identifies serial litigatorsFree Test for Webinar Attendees
Agenda• Today we focus on practical solutions
• Quick recap on the TCPA and new wireless dialer rules.
• Innovative techniques for obtaining “express written consent.”
• New VoIP risks.
• Risk related to professional litigators.
• State and Fed DNC updates.
• Important reminders about state licensing, bonding and exemptions.
Who is watching you?
• Today we focus on the Federal Communications Commission (FCC), but don’t forget:
• Federal Trade Commission (FTC)
• Consumer Financial Protection Bureau (CFPB)
• The US Department of Justice / US A.G.
• State Attorneys General and Divisions of Consumer Protection.
• Agencies now share complaint data! (Consumer Sentinel System)
• Better Business Bureau (BBB). BBB cannot regulate, but it investigates & reports.
• Private litigators and their legal counsel.
New TCPA wireless and dialer rules1. What the new rules require2. The death of EBR for autodialers3. Why scrub out wireless numbers4. Possible exemptions5. How to obtain “written consent” to call cell phones6. Recordkeeping for consent7. Creative solutions – thinking outside the box8. New technologies9. How calls to landlines and B2B are affected10. Telemarketing defined11. What to do if sued/subpoenad12. Potential penalties13. Call abandonment14. VoIP
What new rules?• Prior express written consent for all autodialed telemarketing
calls to cell phones (prerecorded, predictive, etc.).
• Prior express written consent for prerecorded telemarketing calls to consumer landlines. (No more EBR exemption)
• New rules and disclosures for obtaining proper consent.
• Automated IVR or key-press opt out option on prerecorded calls. Also must disclose a toll-free call back number for opt-out request if left on recipient’s voicemail.
• Abandoned call rules (max 3% abandonment/drop rate measured on successive 30-day per individual campaignbasis).
The death of EBR for autodialers • No more EBR exemption for robocalling residential landlines.
• Why does this suck? Can no longer blast the landlines of your customer base, inquiries, “no-buys”, etc. Need consent.
• EBR is still an exemption to the national DNC list, but not the dialer restrictions.
Wireless identificationWhy identify/scrub wireless numbers?
• Unless you have the proper consent, you generally may not autodial cell phones.
• Proper written consent is hard to obtain under the new FCC consent definition.
• Significant fines and penalties, private right of action allowing consumer to sue. Class actions.
How to scrub wireless numbers?
• Carrier file containing all wireless number prefixes.
• Ported number list of lines ported from landlines to cell phones.
• Limited 15-day safe harbor for certain autodialed calls to cell phones.
Possible exemptions to the new rules• Cell phones
• Prior express written consent (for telemarketing calls).
• Prior express consent (not written) for non-telemarketing robocallsand calls from tax-exempt nonprofits. (No change)
• Certain HIPAA-regulated health care messages (might still need consent, but not written).
• Residential lines• Prior express written consent.
• Calls made for emergency purposes.
• Calls not made for a commercial purpose.
• Calls made for a commercial purpose, but which do not include or introduce an advertisement or constitute telemarketing.
• Calls made by or on behalf of a tax-exempt nonprofit organization.
• Certain HIPAA-regulated health care messages (might still need consent, but not written).
How to obtain written consent to call cell phonesCFR § 64.1200(f)(8)
The term prior express written consent means an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered. (i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that: (A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and (B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.
How to obtain written consent to call cell phones• Requirements
• Written agreement which includes the signature of the person providing consent (can be an electronic signature per ESIGN Act).
• Agreement must indicate the specific seller (or sellers) to whom consent is being provided.
• Agreement must included the telephone number to be called.
• The person must take some affirmative action to clearly indicate their consent.
• Agreement must disclose:• The consumer authorizes the company to make telemarketing calls.
• The calls will be placed using an ATDS (including prerecorded if applicable).
• The consumer is not required to provide consent as a condition of purchase.
• Methods• Website opt-in (proper language, affirmative action, store consents).
• Paper forms (but sweepstakes entry forms are risky). Can’t hide in fine print.
• Live recorded consent over the phone. Careful not to explode your internal DNC!
How to obtain written consent to call cell phones• By clicking below, you agree to be contacted by us and our affiliates
about promotional offers. (Not sufficient)
• By clicking the “SUBMIT” button below, I expressly authorize Allen Legal to deliver or cause to be delivered telemarketing calls, prerecorded messages, and SMS text messages regarding its products and services, using an automatic telephone dialing system or an artificial or prerecorded voice, to me at the telephone number I entered above, which I certify is my own number. I understand that I am not required to give my consent as a condition of purchasing any property, goods, or services. (Too long/impractical?)
• By clicking the “SUBMIT” button below, I expressly authorize Allen Legal to contact me at my number I entered above, about their services, including through the possibly use of an autodialer, prerecorded and text messages. I understand that I am not required to consent in order to make a purchase and I may opt out at any time. (Good compromise)
Real examples I’ve seen(not compliant)
• I confirm that I have provided the correct and valid information and agree to be contacted by XXXX, through any of the phone numbers provided above or by any other manner deemed appropriate by XXXX, for the purpose to follow up on my interest in the particular product(s) stated above. Further, I agree that XXXX is not responsible for misuse of the information provided above unless it is proven that it is caused by XXXX willful misconduct or gross negligence.
• By selecting this box, I am agreeing to share my information with XXXXInc. and to receive future communications from XXXXInc
• By participating, I agree to receive important recordings and texts on my cell phone from XXXX and its affiliates even if I am on the Do Not Call list.
Necessary consent elements
For obtaining “prior express written consent”:
• Identify specific telephone number to be called.
• Identify the sales/marketing purpose.
• Identify which specific business(es) will call them.
• Identify technology to be used (ATDS, Prerecorded, SMS).
• Disclose that they are not required to consent in order to buy.
• Collect an unambiguous, affirmative agreement evidencing consent after “clear and conspicuous” discloses. (Can’t be in fine print or in privacy policy, etc.)
• Obtain written signature (or electronic signature under ESIGN Act).
Consent Quiz – what’s missing?1. By clicking “I Agree,” you agree to receive marketing calls and
prerecorded messages from Student Loan Heroes using our automatic telephone dialing system, at the number you entered above.
2. By participating, you agree to receive autodialed telemarketing calls, recordings and text messages at your number above from Solar Energy Saviors. You are not required to consent in order to obtain our services.
3. By clicking “Go,” you agree that Education Consultants may call you or send you texts about important educational opportunities at the number/cell-phone you entered above, and you understand that you are not required to let us call/text you in order to enroll or purchase anything.
4. By clicking SUBMIT, you agree to be contacted about special vacation offers at the number you entered above using automated technology and prerecorded messages. You are not required to consent in order to purchase any vacation stay.
5. By clicking “Next Screen,” you agree that we at No Jokers Lending may call you using an automatic dialer and prerecorded messages about short term loan offers that may interest you. You are not required to consent in order to purchase.
(These are made up examples)
Consent Quiz – what’s missing?1. By clicking “I Agree,” you agree to receive marketing calls and
prerecorded messages from Student Loan Heroes using our automatic telephone dialing system, at the number you entered above. (missing consent not required disclosure)
2. By participating, you agree to receive autodialed telemarketing calls, recordings and text messages at your number above from Solar Energy Saviors. You are not required to consent in order to obtain our services. (no specific affirmative action evidencing consent)
3. By clicking “Go,” you agree that Education Consultants may call you or send you texts about important educational opportunities at the number/cell-phone you entered above, and you understand that you are not required to let us call/text you in order to enroll or purchase anything. (doesn’t state that ATDS will be used)
4. By clicking SUBMIT, you agree to be contacted about special vacationoffers at the number you entered above using automated technology and prerecorded messages. You are not required to consent in order to purchase any vacation stay. (missing the specific caller/business)
5. By clicking “Next Screen,” you agree that we at No Jokers Lending may call you using an automatic dialer and prerecorded messages about short term loan offers that may interest you. You are not required to consent in order to purchase. (missing specific phone number)
Consent Recordkeeping
• Store proof of consent for at least 5 years beyond the last date you or your partners/clients will call in reliance on that consent.
For web opt-ins, capture and store:
• URL
• Time and date stamp
• IP address
• Screenshot or other data showing what they saw when they consented and what they entered into the form.
• Consider how easy it would be to demonstrate consent to a judge who is not familiar with complicated web op in and telemarketing processes.
Additional consent best-practices
• Consider making them promise they own the number.
• Remind them they can opt-out at any time.
• Consider using a dual/double opt-in.
• Ask for consent at every consumer touch point in order to build up large database of opt-in, callable numbers.
• Opt-in, preference based marketing is the way of the future!
• Don’t just try to sneak it in there or trick the consumer.
• Audit yourself frequently.
Thinking outside the box
Incentivizing consent
• As a valued Pizza King customer, we are offering you a limited-time 50%-off discount Pizza coupon! By clicking the activation link below (within the next 5 days) to activate your discount pizza card, you consent to receive autodialed text message offers from Pizza King at the number you entered above. You are not required to consent to our marketing in order to purchase as you can always contact us directly to purchase pizza for standard pricing without allowing us to market to you... Thoughts?
• The new rule says we can’t make consent a condition of purchase, but it does not prohibit us from incentivizing consent. Even if the FCC might frown upon this, nothing in the TCPA prohibits us from essentially buying consent from the consumer.
• Truthful time-limited offers are allowed (FTC) as long as they do not create a false sense of urgency.
Thinking outside the boxVerbal recorded consent
• Eric, one more thing - there is never any obligation, but would it be alright for Allen Legal to call you in the future about our legal services? Wonderful! So just for compliance reasons, I’ll need to read you this short statement and then have you answer with a clear “Yes”, ok? To ensure you receive these great offers, you agree that Allen Legal may call you for marketing purposes using automated technology at the number you called us on today, which is your own number, and you understand that you are not required to consent to purchase and you may opt out at any time. You agree that your recorded permission today will constitute you express written consent, is that all correct?
• The FCC comments about the amended TCPA state that written consent may be obtained though any process that complies with the ESIGN Act or similar state law, including consent obtained during a recorded phone call.
Thinking outside the box
Avoiding the new autodialer rules by using technology which is not an ATDS.
• ATDS = “Equipment that has the capacity to (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.” The FCC has emphasized that this definition covers any software which has the capacity to generate numbers and dial them without human intervention, regardless of whether the numbers called are randomly/sequentially generated or come from calling lists.
Thinking outside the box“Manual Dialers” – an oxymoron? What about Preview Dialers:
• An autodialer includes any software which has the ability/capacity to autodial. Therefore, you can’t just switch your predictive dialer into “preview” mode and be safe – it’s still an autodialer and can’t be used to call cells without consent.
• A truly compliant preview dialer will have no ability to: (1) do random/sequential number generation/storage, or (2) call numbers except by presenting the agent with a number to call, then forcing the agent to click to call that number live (one at a time with human intervention on each call initiation).
• Certain preview dialers are likely NOT autodialers, so long as they have no capacity to autodial – contain no software code allowing for random/sequential, predictive, prerecorded, sms, power dialing, multi-line, etc.
• Still a small risk related to future/theoretical capacity.
• What about multi-line manual dialers?
Tips:
• Be careful not to use a predictive platform that is branded as an autodialer in advertising materials.
• Get a developer specs certification and legal opinion letter!
Thinking outside the boxNew technologies
• Direct-To-Voicemail Messaging. Not a “call” per se. Circumvents the need to call the consumer’s telephone number, but still may require a call to the carrier and also causes a message waiting indicator (MWA).
• Avatar/Pre-Recorded Snippets played by live agents. This is certainly not traditional robocall, but it does make use of recorded messages, although they are played by live agents who can also interject with own voice. Live agent can often handle 2+ calls at once, which makes it look like autodialing.
• Blue-tooth broadcasting. Transmits a generic invitation to view an offer to any blue-tooth enabled devices in range (tablets, phones, car, etc.). Consumer can elect to receive and view the message or decline. This is not a “call” per se, but if received by a cell phone, could it be construed as a call?
• Social Media Messaging. Certainly not a “call,” but what if the social media message is converted by an app into a text message, or visa verse? Watch new platforms like “Google Hangouts,” etc.
Are landlines affected by the new rules?• Over 1/3 of all households are now wireless-only residences.
However, marketers still need to reach landlines.
• Unlike for cell phones, the TCPA still allows predictive telemarketing calls to landlines without consent (but not prerecorded). So long as no prerecorded message, no consent is needed to autodial a landline under the TCPA.
• For prerecorded telemarketing messages to landlines, we will need prior express written consent (just like for cell phones).
• For non-telemarketing prerecorded messages to landlines, no consent required.
• Some states are more restrictive!
What about B2B?• CFR § 64.1200 (a) No person or entity may:…(2) Initiate, or cause to
be initiated, any telephone call that includes or introduces an advertisement or constitutes telemarketing, using an automatic telephone dialing system or an artificial or prerecorded voice, to any of the lines or telephone numbers described in paragraphs (a)(1)(i) through (iii) of this section [any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call], other than a call made with the prior express written consent of the called party…
• Not consumer-specific; therefore, protects all cells, including business cells.
• Far less FCC and FTC enforcement against B2B.
• Still a huge risk from private suits.
But I’m not “telemarketing”!• Be careful – telemarketing is defined broadly.
• FTC: The TSR defines “telemarketing” as “a plan, program, or campaignwhich is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call.” Therefore, even if you do not collect money or directly solicit purchases over the phone, if your calls are part of a broader “plan, program or campaign” for which the goal is to ultimately induce a sale by someone, the call is considered a sales call.
• FCC: The TCPA defines a “telephone solicitation” as “the initiation of a telephone call or message for the purpose of encouraging the purchaseor rental of, or investment in, property, goods, or services, which is transmitted to any person…”
• What telemarketing is not: Collections calls, informational calls that do not promote, certain reminders/notifications, customer service calls -careful not to cross the line!
Potential fines and penalties• Potential Penalties
• Government fines of up to $16,000 per individual violation.
• State fines listed at TelemarketingFines.com
• Potential for multiple violations per call (no consent, failed disclosure, no opt-out, didn’t provide DNC policy, etc.)
• State Attorney General enforcement actions.
• Injunctions.
• Disclosure on future license applications.
• Criminal charges for violation of court orders or if significant consumer fraud component.
Potential fines and penalties• Private civil right of action allowing consumer to sue.
• 47 USC §227 (b)(3) Private right of action. A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State—(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation, (B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or (C) both such actions. If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.
• The private right to sue is probably the largest risk for violators. Consumer can sue you directly for $500 per violation (or $1500 if willful). Consumer class actions also possible.
• Both the federal courts and state courts have jurisdiction. Mims v. Arrow Financial Services, LLC.
If you are named in a TCPA suit• Don’t panic, but act fast.
• Preserve all documentation and retain counsel immediately.
• Assess whether violations occurred and amount of actual exposure.
• Consider an early, reasonable settlement if actual violations.
For class actions:
• If possible, remove case to federal court if filed in state court.
• Limit scope of case in terms of claims and geography.
• Many plaintiff’s firms will agree to settle a national class action only for one or a few states.
• Use creative legal techniques (“picking off” named plaintiff with individual offer of judgment, challenging class certification with consent issues, motions challenging plaintiff’s initial complaint, etc.)
If you are subpoenaed in a TCPA case• Again, don’t panic, but act quickly.
• Consult with counsel to determine what documents to preserve and what info to provide.
• Obtain extensions if needed.
• Object when appropriate (overbroad, vague, unduly burdensome, jeopardizes your privacy or proprietary business info, etc.)
• Respond as required, but limit your own company’s exposure.
• Resist the urge to overtly “take sides” (plaintiff vs. defendant).
• Act to limit the scope of the subpoena (time, data type, campaign-specific, etc.)
• Withdraw objections or provide additional information in exchange for assurances about you not being named.
• Never be deposed without legal counsel present.
Call abandonment ratesFinally, the FTC and FCC see eye to eye! (rate calculation harmonized)
• (Predictive Dialing) A call is considered “abandoned” if the recipient is not connected with a live agent within 2 seconds after the recipient’s completed greeting.
• May not abandon more than 3% of all calls as measured on a successive 30-day basis, per individual calling campaign.
• On every abandoned call, the telemarketer must play a recording which clearly states the following and nothing more: (1) the identity of the business responsible for the call; (2) that the call was for telemarketing purposes; (3) a telephone number which can be used to call back and make an opt-out request; and (4) an automated opt-out mechanism (interactive voice or key-press), which will allow the recipient to make an automated opt-out request.
• When a person opts out using the automated mechanism, you must immediately terminate the call and honor the opt-out (internal DNC) request. You must maintain records to demonstrate your compliance with the call abandonment rules.
The new VoIP issue
Voice over Internet Protocol• VoIP is a category of hardware and software that enables people
to use the internet as the transmission medium for telephone calls by sending voice data in packets using IP rather than by traditional circuit transmissions of the PSTN.
• Many VoIP users pay a small fee per call, or per minute.
• Not completely safe to treat VoIP lines like regular landlines.
• Lynn v. Monarch Recovery Management, Inc. – Court held that because Plaintiff proved he was charged per call, Monarch’s autodialed calls to plaintiff’s VoIP line violated the TCPA. The Fourth Circuit Court of Appeals upheld the lower court’s decision on appeal.
• Tip: Seriously consider scrubbing for VoIP until we get a better interpretation from the courts or FCC, especially on higher risk campaigns that generate higher volumes of complaints.
Where does the VoIP risk arise:
47 U.S.C. §227 (TCPA)
(b)(1) Prohibitions It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—
(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice…
(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call;
State cell and SMS restrictions
• Five states in the U.S. ban unsolicited marketing calls to cell phones:
• Arizona
• Louisiana
• New Jersey
• Texas
• Wyoming. (except for EBRs)
(Thus, even when you are manually dialing, you may not call cell phones in these states without prior consent.)
• Some states also specifically prohibit unsolicited SMS text marketing: Arizona, California, Rhode Island, and Washington. Various exemptions may apply.
Do Not Call Update
• US Federal: The national DNC contains approximately 220,525,700 active registrations.
• 12 State DNC lists: Colorado (3.88mil) , Florida (14.1mil), Indiana (2.4mil), Louisiana (2.7mil), Massachusetts (5.9), Mississippi (1.5mil), Missouri, (4.5mil) Oklahoma (666k), Pennsylvania (2.67mil), Tennessee (4.9mil), Texas (14.7mil), Wisconsin (1.5mil, but recently discontinued), and Wyoming (1,662).
• Foreign: Australia, Canada (12.83mil), France, India, New Zealand, and the United Kingdom.
• Wireless: 4,875,484 wireless ported; 662,826 wireless block;
• VoIP: 6614 known prefixes.
• Public Safety DNC: Approved, but not yet in effect. Stay tuned…
• Entity Specific DNC: Your internal opt-out list.
• Known litigator list: 73,806
National DNC access
• Sellers obtain their unique “Subscription Account Number” (SAN) from the federal government.
• The SAN allows the subscriber to obtain any 5 initial area codes for free, but the rest must be purchased.
• A product seller generally may share it’s SAN with its 3rd party call vendors, but not visa versa.
• $60 per area code up to a maximum annual fee of $16,482 for the entire nation.
• Not required to purchase the area codes for areas/prefixes they do not call.
• An exempt caller can obtain an “exempt” SAN and download the list for free.
• A SAN can be obtained here: https://telemarketing.donotcall.gov/profile/create.aspx
DNC pointers
• Actually buy and scrub; don’t rely on “pre-scrubbed” lists.
• Use an expert vendor for DNC identification and scrubbing.
• (B2B) Consider scrubbing DNC even if exempt. Get a free/exempt SAN and scrub to ensure the “business” lists you are calling do not contain consumer numbers. Most consumer numbers are on the DNC.
• Create a good safe harbor program (policies, training, systems).
• Know where state and federal DNC programs differ (different scrubbing deadlines, EBR timeframes, etc.)
• Use a fail-safe, if possible.
• Take advantage of the 2 biggest DNC exemptions: Permission & EBR.
National DNC list exemptions• EBR (established business relationship)
• Consent
• Personal relationship
• Non-telemarketing
• Informational
• Customer service
• Debt collection
• Delivery confirmations
• Emergency notifications
• Certain non-profit political/charitable calls
• Calls to genuine business numbers, even if added to DNC list
EBR exemptionTwo types of established business relationship (EBR) exemptions
from the national Do-Not-Call Registry:
• Transaction EBR: 18 months from date of last purchase (measured from date of last payment or provision of service).
• Inquiry EBR: 3 month DNC exemption from date of last product/service inquiry.
EBR tips:
1. Be sure to accurately calculate and document the triggering event of the EBR.
2. Remember as of 10/16/13 EBR no longer gets you around the prerecorded message ban.
DNC Safe harbor defense
• Often, companies are preemptively shielded from monetary fines related to DNC violations if they satisfy each of these elements and the calls in violation were made as part of an isolated error. You need all these safe harbor elements in place before you come under investigation for it to have any effect—you cannot create your safe harbor after you are already in trouble.
• Elements:
• (1) establish and implement written procedures to comply with do-not-call restrictions;
• (2) train personnel, and any entity assisting in compliance, in the written procedures;
• (3) monitor and enforce compliance with the written procedures;
• (4) maintain an entity-specific DNC list;
• (5) use a process to prevent telemarketing calls to numbers on the national and entity-specific/internal DNC lists.
Scrub DNC at least once every 31 days and be able to PROVE you did so.
Internal DNC rules
• Also referred to as your “in house” DNC or “entity-specific” DNC.
• Calls to consumers who believe they properly opted out are a leading cause of complaints, and therefore also of investigations and enforcement action.
• An opt out request must be honored as fast as your technology allows, but in no event more than 30 days after the request.
• TSR: It is an abusive telemarketing act or practice and a violation of this Rule for any seller or telemarketer to engage in the following conduct: …Initiating any outbound telephone call to a person when…that person previously has stated that he or she does not wish to receive an outbound telephone call made by or on behalf of the seller whose goods or services are being offered or made on behalf of the charitable organization for which a charitable contribution is being solicited.
State telemarketing licenses
• The following 33 states now have local telemarketer licensing requirements: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, DC, Florida, Idaho, Indiana, Kentucky, Louisiana, Maine, Mississippi, Montana, Nevada (not enforcing), New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin (NEW) and Wyoming.
• Entity vs individual licenses.
• Cost and complexity varies greatly. Example: VT vs UT.
• Tips: NV not currently enforcing license.
DC only requires general business license.
Entities subject to the FCC are exempt in TX, WA.
Wisconsin has new license requirement.
Free chart at TelemarketingLicenses.com
Telemarketing bonds
• As part of the local licensing process, the following states require applicants to obtain surety bonds: Alabama, Arizona, Arkansas, California, Delaware, DC, Florida, Kentucky, Louisiana, Maine, Mississippi, Montana, Nevada, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas, Utah, and West Virginia.
• Bond requirement amounts range between $10,000 and $500,000.
• Obtaining the bond is like applying for a loan, but the bond acts like an insurance policy.
• Tips: Virtually everyone is exempt from the NY bond & fee, so long as the business is registered somewhere!
• Free chart at TelemarketingBonds.com
License exemptions• Types of exemptions
• B2B only callers• EBR only• Face to face follow-up (appointment setters)• Isolated transactions• Publicly-traded companies• Prior permission or inquiry• Certain licensed professionals• No prize promotions• Inbound only• Retail businesses
• Tips: How to find exemptions• Read the actual code yourself;• Review state government websites, call regulators;• TelemarketingLicenses.com (click the “state exemptions” tab)• Consult with counsel if not absolutely certain you are exempt.
B2B exemption from license
• Business-to-business ("B2B") telemarketers. Some states have exemptions for telemarketers who only call other businesses. Whether you qualify may depend on what was sold, whether the business purchased something from you in the past, whether you send descriptive literature before the new transaction, or other factors.
• States having B2B exemptions from local licensing: Alabama, Arizona, Arkansas, Colorado, Delaware, Florida, Kentucky, Mississippi, Maine, Montana, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Washington, West Virginia, Wisconsin, Wyoming.
• Read exemptions carefully – some are complex!
EBR exemption to licensing
• Established Business Relationship ("EBR"). Some states have exemptions for companies who only call their current and former customers. Be careful - whether you qualify may depend on how recent the customer’s prior purchase was, what they purchased, etc. Some of these states only allow the exemption for calls to customers who are receiving continuing services from you.
• States which have EBR exemptions: Alabama, Arizona, Arkansas, Colorado, DC, Delaware, Florida, Idaho, Kentucky, Louisiana, Mississippi, Montana, Nevada, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming.
• Read exemptions carefully before relying on them. Some states (like FL) require you to file for the exemption.
Face-to-face follow up
• Face-to-Face follow up (appointment setters). Some states have a telemarketing license exemption if you do not complete the transaction until after a face-to-face meeting with the consumer after the telephone call. These exemptions generally do not apply if the consumer agrees to the charges during the phone call - both the agreement and the collection of money cannot occur until after the face-to-face meeting.
• States which have appointment setter exemptions: Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, DC, Florida, Idaho, Louisiana, Mississippi, Nevada, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Washington, West Virginia.
• Read exemptions carefully!
Licensed professionals
• Licensed Real Estate Professionals. Some states exempt telemarketers who are properly licensed under the state's real estate licensing statutes. Merely having a real estate license in your home state is often not enough - you may also need the real estate license in the state you want to call into. Some of the states which have a telemarketing license exemption for certain real estate professionals include: Alabama, Alaska, Arkansas, Colorado, Delaware, Florida, Maine, Mississippi, Nevada, North Carolina, Oregon, Washington, and West Virginia.
• Licensed Insurance Professionals. Some states will not require you to get a telemarketing license if you are a licensed insurance professional. Be careful - some of these states only allow the exemption for licensed brokers, rather than licensed agents. Always be sure to check whether you need an insurance license in your home state only, or if you also need an insurance license in the state you want to call into. Some of the states which have a telemarketing exemption for certain licensed insurance professionals include: Alabama, Colorado, Delaware, DC, Florida, Louisiana, Montana, Nevada, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, Washington, and West Virginia.
Consent as a license exemption
• Prior Permission or Inquiry. Some states have a telemarketer licensing exemption for call centers who only call consumers who previously gave the call center permission to call them, or who previously inquired about the sellers products or services.
• Be careful - some of these exemptions only apply if you obtained very specific permission or if the inquiry was within a certain window of time. Read exemptions carefully.
• Sates who have licensing exemptions related to prior permission or inquiries are: Alabama, Colorado, DC, Idaho, Kentucky, Mississippi, South Dakota, Vermont, West Virginia, Wisconsin, Wyoming.
Prize promotions
• Prize promotions includes incentives such as sweepstakes, drawings, giveaways, “specially selected” offers, etc.
• “Prize Promo States” - Several states exempt telemarketers from registration if no prize promotions are used. These states include: Arkansas, California (other license triggers exist), Indiana, Louisiana, Montana, Nevada, Oregon, and Rhode Island.
• Conversely, if the telemarketer does in fact use prize promotions, additional telemarketing rules will apply – special disclosures, bonds, loss of license exemption, etc.
Eric’s final compliance tips• Make compliance a priority both in terms of budget and
corporate philosophy.
• Establish compliance systems early on and continually audit, adapt and update. Policies, training, checklists, fail-safes, etc.
• Have good recordkeeping. Don’t just be compliant - be able to PROVE you are compliant.
• Promptly resolve consumer complaints to the consumer’s full satisfaction. Complaints = investigations/fines/lawsuits.
• Due your due diligence on the companies you work with (lead brokers, dialer vendors, fulfillers, etc).
• Have good contracts with your partners/affiliates. Require them to follow the rules and to indemnify you for errors.
• Be aware of regulatory “pet projects” and avoid high-risk campaigns when possible (robocall, vulnerable populations -elderly, financially distressed).
• Bookmark and review TelemarketingCompliance.com
contact info
Eric S. Allen, Allen Legal Services PLLC
TelemarketingLawyer.com
801-930-1117
Ryan Thurman, Contact Center Compliance
DNC.com
866-DNC-LIST (362-5478) x 116
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