First Commerce Title
Some of us enjoy having our favorite television show or our dinner interrupted by a telephone call from a stranger who wishes to sell us something. Most of us don’t. In a 2003 survey, Americans rated telemarketing fourth among the one hundred worst ideas of the 20th century. Consumer complaints about telemarketing practices, as received by the Federal Trade Commission, increased tenfold between 1998 and 2002. This strong current of dissatisfaction has registered with policy makers and they have rushed to write multiple regulatory schemes to protect consumers. Perhaps, instead of “current of dissatisfaction”, I ought to have said “tidal wave of indignation.” In any event, the result has been a plethora of rulemaking undertakings concerning “do-not-call”. As of December 23, 2004, 69 million numbers had been registered on the national do-not-call database.
Realtors (like dolphins in tuna nets) have, unfortunately, been caught up in this wave of rulemaking.
As we all know, many beginning agents, as well as quite a few experienced agents, rely on telephone cold calling to build their business. Because of the complexity and expense of the new “do-not-call” rules, quite a few agents have simply opted to discontinue telemarketing. Hopefully, this article will be of some assistance in guiding those who would like to build their business over the telephone, but stay within legal bounds.
In order to understand where we are now, some legislative history is in order. In 1991, the U.S. Congress enacted TheTele-phone Consumer Protection Act (“TCPA”). Among other things, it authorized the Federal Trade Commission to implement regulations to control telemarketing calls. The FTC did promulgate regulations pursuant to its authority, but opted not to create a “do-not-call” database, believing that enforcement of same would be too difficult and expensive. Instead, the FTC made a rule which required telemarketers to maintain their own “do-not-call” databases, to be comprised of consumers who had objected to that telemarketer. This, of course, put the consumer in the position of registering with every telemarketer. Obviously, this plan was unworkable as a meaningful bulwark of consumer privacy. Nevertheless, you should be aware that this regulation is still on the books. Therefore, if you should call a consumer whose name is not on the do-not-call list, but who has previously requested that his name be removed from your list, you will, nevertheless, be subject to imposition of the same federal fine as you would receive for the violation of calling a consumer registered on the do-not-call list.
In 1994, the Congress, sensing that the telemarketing problem was accelerating, passed the Telemarketing Consumer Fraud and Abuse Prevention Act (“TCFAPA”). The FTC promulgated additional regulations to enable enforcement of TCFAPA. One portion of those regulations requires the telemarketer to disclose his identity and the purpose of his call. This is still the law and you should always comply with this provision.
Finally, the Congress decided that the telemarketing problem had reached a point that a national do-not-call list was the only available redress. In March, 2002, the Congress enacted the Do-not-call Implementation Act (“DNCIA”). Under DNCIA, the FTC was required to issue additional regulations for the establishment of a national do-not-call registry database. Because, arguably, FTC has jurisdiction over only calls made on an interstate basis, the Federal Communications Commission (FCC) was likewise empowered by Congress. FCC clearly has jurisdiction over both interstate calls and intrastate calls. FTC and FCC have now issued regulations which harmonize and, apparently, provide for a seamless enforcement structure for any telemarketing call made in violation of the rules. If you wish to read FTC’s actual regulation (which incorporates its rule-making delegation under TCPA, TCFAPA, and DNCIA), go to http://www.ftc.gov/os/2002/tsrfinalrule.pdf . If you wish to read the actual FCC regulation, you can find it at http://edocket.access.gpo.gov/cfr_2003octqtr/47cfr64.1200.htm.
Under the cited federal regulations, these are the rules:
This provision was amended from the previous requirement that the list be no more than 3 months old. The new version became effective January 1, 2005. Names stay on the list for five years.
So much for the federal rules. You might recall at the beginning of this article that I mentioned that all the policy makers wanted to weigh in on telemarketers. Well, that includes the State. On July 10, 2003, the Louisiana Public Service Commission issued its General Order regulating telemarketing. This regulation was issued pursuant to the authority granted the Public Service Com-mission in R.S. 45:844.11—844.15. If you wish to view the entirety of the regulation, it is on the internet at http://www.lpsc.org/GeneralOrder07-10-03.pdf. You can also read an easy to understand explanation of the regulation on the Louisiana Public Service Commission’s website at http://www.lpsc.org. As we go on here, you will note some discordance between the Louisiana Public Service Commission’s rules and the Federal Trade Commission’s rules. You should be aware that the federal legislation which authorizes do-not-call allows for states to make their own do-not-call rules; however, in any instance in which the state rule is less onerous than the federal rule, the state rule will be overruled by the federal rule. As I read the federal rules and the state rules together, if your action constitutes a violation of both rules, then you are subject to both fines; if your action constitutes a violation of only one of the rules, then you are subject to that government’s fine. Therefore, my advice is that your calling program complies with both the federal and state regulation whenever one regulation is more limiting than the other, you should comply with the more limiting regulation.
Here are the portions of the Public Service Commission’s regulation which I deem to be pertinent to brokers and agents:
While it appears that there is a move on for the LPSC to incorporate the FTC data-base into the LPSC database, the LPSC’s website explicitly disclaims that its database contains all the numbers listed in the FTC database. Therefore, I recommend that both databases be purchased and that both lists should be consulted before a call is initiated, especially since the federal list is updated every 31 days, as opposed to the state list which is amended on a 90 day basis.
If you plan to use telemarketing as part of your business strategy, I urge you to read this article carefully and to do additional research on the websites set forth above. Whenever there is discordance between the federal and state rules you should limit your actions according to the more limiting of the two rules. Brokers should thoroughly acquaint themselves with these rules and undertake written policies to implement their requirements as well as establish training programs for their agents.
Now that you know the rules, when if comes to choosing whether or not to telemarket, you’re in a position to make the call.