Though telemarketing is an effective way to reach out to potential and existing customers, the flipside is that the telemarketing industry has become infamous for deceptive and overly aggressive selling tactics, especially during the last few years. To prevent the abuse of people's privacy rights, federal and state laws created Do-Not-Call (DNC) Registry and prescribed numerous guidelines to telemarketers. In this article, we are going to look at some useful tips to help telemarketers avoid legal pitfalls.
Telemarketing Rules and Regulations You Need to Stay Compliant With
Тhe Telephone Consumer Protection Act (TCPA)
The Telephone Consumer Protection Act (TCPA), on 16 October 2013, enforced a new set of regulations to prevent automated sales and marketing calls to cellphones, due to which many powerhouses such as Google and Papa John's had to bear multimillion-dollar settlements. Any violation of TCPA can cost the offender anywhere from $500-1500 per incident. That's why it is critical for businesses to be aware of the type of phone numbers used in outbound calling and how frequently the team is updating the business telemarketing lists.
There are many regulations that you need to follow. For example:
- Federal law specifies that such businesses can contact residential customers only between 8:00 a.m and 9:00 p.m.
- Calls are not supposed to be made to prospects who have registered themselves with the National and 12 State-wide Do Not Call (DNC) lists.
- If your business markets its products and services via telephone, you must mention the name of the business and caller/agent name when a customer asks for the information.
- Some companies and organizations are exempt from the National DNC list. These exceptions can be found on the Federal Communication Commissions (FCC) website.
Telemarketing Consumer Fraud & Abuse Prevention Act
According to the Telemarketing Consumer Fraud and Abuse Prevention Act, companies selling products and services should clearly communicate the details of their products and services to prospective consumers and also the specific terms of any such offers. Telemarketers should not deceive call recipients by fabricating their offer. They need to clarify the quantity and cost of the product, conditions of the offer, limitations on the purchase of the product, refund, and cancellation policies. The US states have the right to file a civil lawsuit on behalf of residents of that state against any company that violates the Telemarketing Consumer Fraud and Abuse Prevention Act.
The Telephone Sales Rule (TSR)
The Federal Trade Commission or FTC enforces the Telephone Sales Rule (TSR) as a federal statute to keep a check on telemarketing calls in the country. According to this rule, telemarketers cannot call their prospective customers if their numbers are listed on the National DNR created by the FTC. Besides, companies also need to obtain written permission from prospective customers before making any automated outbound solicitation calls.
State Specific DNC Lists & Cell Phone Laws
You may also be responsible to comply with a state-specific Do Not Call list or cell phone list. Wireless litigation tends to be the most common in today’s telemarketing era. Cell phone data is not compiled by the government so to our knowledge the only company providing that data currently is Neustar.
Canadian Telemarketing Regulations
Register With National DNCL
A telemarketer that makes unsolicited calls to Canadian citizens and the client(s) of a telemarketer is required to register with the national Do Not Call List (DNCL). If a third party is handling the subscriptions for a business, then that party also needs to register with DNCL. An identification process precedes this registration process; it takes a mere 10 minutes to complete this process on the national DNCL site.
Make Timely Payments of DNCL Subscription Fee
It is mandatory for a telemarketing agency to maintain an internal do not call list, even if they only make DND exempt calls. As you may already know, a DNCL subscription comes with an annual fee; the amount depends on your area code. If a telemarketing agency acquires Canadian business lists from a provider, it is best to ensure it is reliable and only issues numbers that are exempt from the DND list.
- Agents can only ‘promote’ insurance products and services of only one particular insurance company.
- If you’re telemarketing for a broker, you may promote the services of multiple insurance companies.
- CRTC assumes the agents of an insurance company are dealing on behalf of the insurance company in question and holds the company responsible for any violations committed.
- MGAs to brokers and insurance companies to MGAs telecommunication is exempted from DNCL rules (but not telemarketing rules and ADAD rules).
Learn the Canadian Radio-Television and Telecommunications Commission (CRTC’s) Unsolicited Telecommunications Rules
What you need to know about the CRTC Unsolicited Telecommunications Rules:
- Restrict which consumers phone numbers telemarketers can contact for solicitation purposes.
- Restrict calling hours.
- Prescribed Information that must be disclosed.
- Restrict the use of Automatic Dialing-Announcing Devices (ADAD’s).
- Impose Record-Keeping Obligations.
Mutual Fund Providers and Financial Advisors
- Such telemarketers fall under the investment industry and need to comply with the guidelines issued by the Investment Industry Regulatory Organization of Canada (IIROC).
- Mutual fund dealers are liable to third parties and their clients for the acts and omissions of employees for violations committed during a call.
- The Security Related Business that an investment advisor conducts telephonically is in the name of his investment dealer.
- Unsolicited Telecommunication applies to the unsolicited calls that Financial Advisors make (to sell a service/product).
Frequently Asked Questions About the Telemarketing Sales Rule
Who Should Comply With the Telemarketing Sales Rule?
Everyone should comply with the Telemarketing Sales Rule, however, there are some exceptions like:
- Banks, Federal Credit Unions, Federal Savings and Loans.
- Common Carriers (long-distance telephone companies and airlines).
- Non-profit Organizations (entities that are not organized to carry on business for themselves or their members to profit).
If your company does not identify with one of these exemptions, then you must comply with the TSR.
Does the Telemarketing Sales Rule Apply to Businesses?
Businesses are not protected in the way that consumers are with the Telemarketing Sales Rules, the DNC list does not apply for calling businesses. “Robocalling” is generally permitted when telemarketing to businesses as well. It is the business’s responsibility to stay informed about the rules and regulations to avoid any lawsuit.
Does the TSR Apply to Charities & Telefunders?
Funding calls for nonprofits and charities are NOT considered as “telemarketing” entities. Thus, these calls do not fall under the TSR.
How Many Times Can a Telemarketer Call?
The TCPA has no minimum call limit for calls made to any number if the phone number isn’t registered for the DNC or if the company is exempt from the DNC list. However, if the consumer requests that they stop receiving calls from the company, then the company must comply. As you know, cold calling is here to stay, but there are some limitations to ensuring people’s privacy.
Is It Illegal For Telemarketers to Call Cell Phones?
No, if the number is not on the DNC list or if the company is exempt from complying with the DNC list, then they are able to call those cell phone numbers. While this is the case for cell phones there are also other outbound telemarketing laws that must be taken into consideration, like the Telephone Consumer Protection Act of 1991 and the Telemarketing Consumer Fraud and Abuse Prevention Act. Reading up on these will help you have a better understanding of what you can and cannot do in telemarketing.
When Can Telemarketers Call?
Telemarketers can call between Monday through Saturday from 8:00 AM—9:00 PM. However, telemarketers cannot call on public holidays and must consider the time zones of the person they are calling.
What Should Telemarketers Disclose on the Call?
Telemarketers are required to disclose the seller or charitable organization that they are calling on behalf of. Additionally, telemarketers must disclose material information about the good or service as well as the terms of the sale.
What Is the Call Abandonment Safe Harbor?
The Call Abandonment Safe Harbor is a Telemarketing Sales Rules that states companies that participate in telemarketing, must have less than 3% abandoned outbound calls. Abandoned calls are outbound calls where the consumer is not connected with an agent after two seconds of the consumer answering the phone.
What Are the Penalties for Violating the Telemarketing Sales Rule?
Anyone who violates the Telemarketing Sales Rules can face civil penalties of up to $40,000 per violation. Telemarketers who violate the TSR may also be required to pay restitution to injured consumers and are at risk of nationwide conjunctions.
Why Was the National Do Not Call Registry Created?
The National Do Not Call Registry was created to facilitate compliance with the Telephone Consumer Protection Act of 1991, which limits the use of pre-recorded voice messages, automatic dialing, SMS, and faxes.
How Are the DNC Registry and the Telemarketing Sales Rule Related?
The DNC Registry’s purpose is to restrict unwanted calls, whereas, the Telemarketing Sales Rule gives guidelines on what is allowed and how to conduct telemarketing calls.
What if My Company Accidentally Calls Someone on the Do Not Call List?
If your company calls someone on the Do Not Call list regardless of whether it was intentional or not, the company could face fines up to $41,484 per call.
What is DNC Scrubbing?
All telemarketers should Register for a SAN (Subscription Account Number) at the National Do Not Call registry. Any organization must have a profile and a subscription to area codes in order to access telephone numbers on the National Registry of Do Not Call Numbers. You’ll need to provide information about your organization and an authorized representative for contact purposes. Then you’ll receive the login info.
By registering, you’ll be able to download up to 5 free area codes of numbers registered on the DNC list to use for your telemarketing campaigns. Additional area codes may be purchased for a fee. After your account is activated, you’ll get your own SAN number. Make sure you select “Seller” when choosing your “Organization Function.”
How to Scrub Leads Against DNC?
Most dialer software such as the Dolphin Dialer has the ability to scrub a lead list against a DNC list. You can simply upload both lists into your dialer and the scrubbing will be done for you. If you’re using a multi-line dialer, such as a predictive dialer, you’ll need to make sure you are following the laws regarding auto-dialers as well.
Robocalls or dialers that do not have a live person on the phone are typically illegal to use for telemarketing in most cases. One-line power dialers or click-to-call inside sales software is a safer method for calling leads, but you should always consult an attorney if you feel unsure.
How to Stay Compliant With the Telemarketing Rules Easily
Understand The Law
Telemarketers need to stay informed about TCPA rules and regulations to avoid lawsuits and legal setbacks. Here is what you need to follow in order to ensure your company complies with the Telemarketing Sales Rule.
- The FTC (USA) and CRTC Do Not Call lists must be updated every 30 days.
- If there is an established relationship your company can call for up to 18 months after the consumer’s last purchase, payment, or delivery, even if the customer is on the DNC List.
- Your company may call for up to three months after the customer makes an inquiry to your company.
- If the customer submits written permission, your company may call the customer, even if the customer is on the DNC list.
- If a customer asks that your company not call, then your company may not call, regardless of whether or not the previous three rules apply.
Obtain Written Consent
In certain cases, telemarketers may not contact a prospect unless they have prior express written consent. The emphasis needs to be on the word written, as prior to the changes, the standard was limited to “prior express consent”. This implies that the majority of opt-in data in business telemarketing lists cannot be accepted as evidence of consumer consent.
On the other hand, electronic or digital forms of signature of the prospects whose names are present in the list are acceptable. To obtain consent, telemarketers may use any communication channel such as email, website form, SMS, and voice recording, among others.
Contact Number Categorization
Before starting any telemarketing campaign, check the mobile phone numbers that have already been exhausted and maintain a list of the fixed-line numbers ported to wireless. The non-fixed VoIP numbers are to be treated similarly to wireless numbers to avoid any penalty. This is necessary as some VoIP services such as Skype might forward the call to a cell phone. When in doubt, it is advisable to consult a legal expert before initiating the campaign.
Ensure Third-Party Data Verification
Telemarketers can hire a third-party service provider to verify the phone numbers of prospective customers while segregating mobile and fixed-line numbers. This is an ideal solution to eliminate inaccuracies in business telemarketing lists and create a database of the prospects who have provided written consent. The phone numbers with written consent are valid only if the prospect shared the same number when they gave the written consent; on the flip side, the written consent stands void if the prospect changes the phone number.
Why Consumers Should Not Register for the DNC Service?
In the middle of a meeting, movie, or family dinner – telemarketing calls had become an intruder in the personal and professional lives of US citizens until the introduction of the National Do Not Call Registry. Though the registration is open for all and can be done anytime by visiting DoNotCall.gov, the cooling-off period can be up to 31 days, after which telemarketers are obligated to cease all contact attempts. However, most subscribers fail to realize there is another side to the story.
Reason #1: Subscriptions & Offers
If you are someone who never keeps track of the broadband subscription, cable TV, or mobile number, do not subscribe for DNC. Chances are high that the customer service representatives might stop giving payment reminder calls to you. Also, they will not be able to inform you about the discount offers and freebies available with new schemes; needless to elaborate the savings you would desert by registering with DNC.
Reason #2: Reminder Calls
Forgetting the next appointment with a doctor or beautician is commonplace for most people. When you are always on your toes, it is always difficult to keep track of your engagements. Although most clinics, salons, and other entities following appointment-based customer engagement give a reminder or confirmation call, they might be unable to get through to you if your number is listed in the DNC registry.
Reason #3: Important Updates
DNC can sour your shopping experience for those who want to be the first one to shop as soon as a new product arrives. For instance, if you are a registered customer of a retail store, you might not receive the members-only sale notifications about upcoming products and their launch dates. Therefore, to stay in tune with time and be the first one to get your hands on the latest products, do not opt for DNC registration.
Stay On the Safe Side of the Law With TelephoneLists
Rules and regulations for outbound telemarketing have continued to change, post the introduction of TCPA rules. Telemarketers who fail to honor the guidelines prescribed may end up incurring substantial damages in compensations. To ensure that your business is set up for success, consider buying custom cold calling lists for your business with detailed and updated customer information to generate quality leads without breaking the law.
