Mortgage Dialer - FTC & FCC Compliance, Laws, and Regulations

Disclaimer:

The below is an introduction to the FCC and FTC rules and is not legal advice. It is not to be considered a replacement for the advice of competent legal counsel. For further information on regulatory compliance please consult with your firm's attorney, call center compliance consultant and/or compliance officer.

Getting up to Speed on Do Not Call (DNC) Regulations

The last several years have certainly been times of fast-moving change for the teleservices industry. No aspect has been more affected than the outbound consumer sales component known as "telemarketing". Making sure you are on the right side of the law can be a time consuming, expensive and often confusing process. After reviewing our guide, hopefully you will come away with a clearer understanding of the regulations and how to efficiently bring (and keep) your firm in compliance with them.

Introduction:

Regulatory Agencies
Two United States Government Agencies (USGAs) are responsible for nearly all regulation and enforcement of telemarketing and teleservices activities. They are:

The Federal Trade Commission (FTC).

The Federal Communications Commission (FCC).

Some regulated industries (for example, financial services) are subject to further industry regulation that may be more stringent or comprehensive that issued by the agencies mentioned above. Additionally, nearly every state has prescribed regulations in addition to those of the federal agencies which apply to calls terminated within those states.

Overview
The FCC has jurisdiction over all telephone calls placed from or terminated within the United States. The FTC has jurisdiction over most commerce, except for certain regulated industries (like financial services). The FTC and FCC enacted almost identical rules establishing a DNC list, and governing the use of predictive dialers and existence of abandoned calls. The FTC rules also govern advertisements, disclosures and related communications via broadcast fax, e-mail and mail.

The national DNC list is governed in part through the FTC's revised Telemarketing Sale Rule (TSR) and the FCC's revised Telephone Consumer Protection Act (TCPA). On June 27, 2003 the FTC began permitting consumers to enroll in a national DNC List. As of December 2003 there were 55 million registrants (including those on state do-not-call lists that were rolled into the national list). More than 63 million were registered by the end of June 2004. Consumers were permitted to enroll via a web site or toll-free number. Enrollment in the registry is for a term of five years and must be renewed in order to remain active.

The National DNC List
The national DNC list is available for sale to telemarketers, who are required by law to purchase the list and "scrub" their own lists against the numbers in the registry at least once every 31 days. If your call center is outsourced, you still must have your own subscription to the list. A separate fee is required for each company using the list. The contract to build and administer the national Do-Not-Call Registry went to AT&T. On October 1, 2007, a new contractor began operating DNC list.

State DNC Lists & Regulations
Currently, 35 states have created their own (or are in the process of doing so) DNC lists that govern calls to consumers within state borders. Marketers making calls to consumers must also comply with rules for state-specific DNC lists. Numerous states also have telemarketing regulations regarding registration of firms, prohibitions on blocking Caller ID data and prohibiting use of rebuttals when a consumer states that they are not interested. Additionally, most states have eavesdropping statutes that require one party (or in some cases, all parties) to consent before calls may be monitored or recorded. Finally, a growing number of states have laws requiring registration of those who seek charitable contributions on behalf of charities, while a few states require only the charity to register but not third parties working on their behalf.

DMA's DNC List
The Direct Marketing Association (DMA) has maintained a DNC list since 1985. Extensive information may be found about it on the DMA's own website, accessible by clicking here.

Court Challenges
Court challenges to the regulations have been completed and the regulations have been upheld. The rules are in effect, they are being enforced and compliance is required. Expensive fines and other unpleasantness can result from non-compliance.

Exemptions to DNC Rules:

Politicians & Charities
The two most notable exemptions to the FTC's DNC rules are politicians and charities. Politicians are exempt from nearly all telemarketing regulations (lawmakers consider it to be a matter of free speech when it involves politics). Charities are also enjoy several exemptions. However if a third-party teleservices firm places calls on behalf of a charity, the consumer may request that they not be called again and then must be placed on the charity’s DNC list. Calling again on behalf of that charity is punishable by a fine of up to $11,000. Although regulated business sectors including telephone companies, airlines and financial institutions are not subject to FTC jurisdiction, this is irrelevant with respect to DNC and abandoned call requirements, because they are still within the FCC's jurisdiction. The FCC has adopted DNC and predictive dialer rules in harmony with the FTC's.

Established Business Relationship (EBR)
Both the FCC and FTC allow calls to people on the DNC who:

Purchased products or services from your firm in the past 18 months, or
Inquired/applied to you in the past 3 months, unless the consumer requested that you not do so, in which case they should be placed on your company-specific DNC list (which has been required since 1991 by the FCC and 1995 by the FTC anyway).

Establishing a Compliance Checklist:

Developing and implementing a Compliance Checklist can make the task of becoming compliant and ensuring that you remain complaint easier and more efficient thus less expensive. It will also allow you to spend less time worrying about being in compliance and more time focusing on your core business objectives.

What's in a Compliance Checklist?
There are several facets of a Compliance Checklist. To provide a better overview, we have broken them down into there sections: corporate, technical and operations components.

Corporate Components:

Establish areas of responsibility with all clients.

Update client contracts as needed.

Obtain client SAN (Subscription Account Number) for the national DNC list.

Verify area codes you are to call against what the client has subscribed to. Make changes as needed.

Subscribe to DMA's Telephone Preference Service and DNC List as warranted.

Check your state's laws (as well as all states you will be calling into) on telemarketing and obtain all required licenses, registrations and/or certifications.

Check the call monitoring laws in your state and ensure compliance.

Check laws in your state regarding permitted hours of calling, permission-to-continue requirements, any "no rebuttals" regulations and verify compliance.

Review federal, state and local sales requirements for compliance, depending on your firm's supported applications.

Review federal, state and local laws and regulations which may apply to your operation with counsel.

Technical Components:

Ensure that predictive dialers are setup to ring at least four times, or for not less than 15 seconds.

Ensure that predictive dialers are setup so that abandoned call rates do not exceed 3% (per day, per campaign if subject to FTC jurisdiction, 3% for all campaigns across 30 days if under the less stringent FCC regulations).

Ensure that predictive dialers are setup to play a pre-recorded outgoing message for abandoned calls on all outbound consumer campaigns. The message must include the company name and telephone number, which must be answered during normal business hours and it must be capable of handling a DNC request. It need not be toll-free. The recorded message must not include a sales message and must state that the call was made for telemarketing purposes.

A consumer telemarketing call must be connected within two seconds of the consumer finishing his/her greeting – otherwise its considered an abandoned call regardless of if the call is answered by a live rep after the two seconds or if the call is programmed to play a recorded sales message after less than 15 seconds or four rings.

Ensure all equipment is programmed to transmit Caller ID data that includes the name of the seller or service agency and a customer service telephone number that is answered during normal business hours.

Ensure that all equipment is setup to comply with local calling hours and any restrictions thereto.

Procedures must be established and implemented on a regular basis to scrub all lists against any and all required DNC lists.

Operations Components:

Consult with client to determine which number abandoned calls will be sent and to and who will be responsible for managing and maintaining it. Do the same for Caller ID callbacks.

Consult with client to determine what company name should appear on Caller for outbound calls. Also, determine what name will be on the message abandoned callers hear.

Assign and setup number(s) for abandoned calls and Caller ID, if needed.

Design scripts for both abandoned calls and Caller ID callbacks.

Keep in mind that callback numbers must be answered during normal business hours and must be able to process DNC requests if required.

Create training curriculum for handling DNC requests and related questions.

Create training curriculum for handling Permission-to-Continue and No Rebuttal state laws (if needed).

Create suitable forms for representatives to sign acknowledging that they have read and understand your policies and procedures. Be sure to obtain any required permissions to monitor them for training and quality control purposes in writing at this time.

Create training procedures for representatives, then put them into action.

Train (and re-train) representatives as warranted.

Have representatives review and sign acknowledgement and certification forms.

While at first glance the requirements of the checklist above can seem overwhelming, a closer look reveals that most of these items have been required by law and should already be a part of our regular routines. The key point to remember is that the teleservices industry is under the microscope now like never before. When a challenge comes up, we will be expected to prove compliance. By the same token, keeping our compliance records in order will help prove that any error was just that - an honest mistake.