Major changes to United States telemarketing laws are just around the corner. The changes, issued and finalized by the FCC more than a year ago, are to the Telephone Consumer Protection Act, one of the main pieces of legislation that governs how telemarketers can use telephones to market products and services to consumers. These new rules, aimed at reducing the number of unwanted telemarketing calls, especially to cell phones, are expected to have a significant impact on the telemarketing industry. Under current law, telemarketers can call cell phone lines as long as they have the consumer’s prior consent or if they have an “established business relationship” with the consumer. The new rules, which come into effect later this month on October 16th, eliminate the “established business relationship” exception and significantly narrow the ways in which a telemarketer can obtain a consumer’s consent.
Under the new rules, before making either (a) an autodialed or prerecorded telemarketing call to a cell phone or (b) a prerecorded telemarketing call to a residential land line or a cell phone, the telemarketer must obtain the “unambiguous written consent” of the consumer and must provide the consumer with “clear and conspicuous disclosures” of the consequences of the consent (e.g. that the consumer will receive telemarketing calls). To qualify as unambiguous, the consent must specify the consumer’s phone number and the name of the business that would call that number. The language of the consent must also make it clear that no purchase of any product or service is conditioned upon the consent. (In other words, the consumer does not have to agree to receive telemarketing calls in order to make a purchase.)
The resulting problem for telemarketers is twofold. One, the elimination of the “established business relationship” is a big deal because that exception allowed businesses to call their existing and recent customers to market additional products. Two, many businesses obtain phone numbers of potential new customers by purchasing legally obtained phone numbers from other companies. Those companies were able to obtain the required consent by simply having consumers agree to receive telemarketing calls in general. Now, however, the law requires that the consumer must agree to receive telemarketing calls from or on behalf of a specific company. In other words, the consent, in order to be valid under the new rules, must specifically inform the consumer of the name of the company that will be calling.
Electronic and digital forms of signature are acceptable as long as they comply with applicable federal and state law, such as the E-SIGN Act. However, the business bears the burden of proving that a clear and conspicuous disclosure was provided, that the consumer unambiguously consented to receive marketing calls at the number called, and that it was clear that the consent was not a condition of purchase. Telemarketing companies need to make sure they comply with these new rules or face steep penalties. Even an inadvertent violation of these rules can result in fines of $500 per violation. (The fine is $1,500/call for intentional violations.) These numbers may sound small for a major telemarketing company, but they can quickly add up — not to mention the time and money expended to address complaints.
Only time will tell whether the new law actually reduces the volume of unwanted telemarketing calls, or if it merely creates more hoops for telemarketers to jump through. Keep in mind, however, that the new rules do not affect debt collection calls because those are not considered telemarketing calls. So if you owe money, don’t expect those debt collection calls to stop!
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