Compliance News and Information
by Joseph Sanscrainte, an attorney with Bryan Cave, LLP, specializing in telemarketing law.
On August 19th, the Federal Trade Commission finally put an end to one its longest-running soap operas, "As the Abandoned Call Turns." Viewers across the U.S. had been watching this program for almost four years, and were finally rewarded with a final "up or down" vote on two cliff hangers: 1) when can prerecorded telemarketing calls be sent?; and 2) how does the industry measure "abandonment" rate?
For companies that send or are in the business of sending pre-recorded messages, the news is not that good. As of September 1, 2009, all prerecorded telemarketing messages are prohibited unless the sender has a signed, written agreement from the recipient. As laws go, this is of the "do not pass go" variety - that is, it starts with an overall prohibition ("it is a violation of this rule for any telemarketer to initiate any outbound call that delivers a prerecorded message"), and then allows for certain limited carve-outs (abandoned call messages, express written permission, true informational calls, and healthcare-related calls subject to HIPAA.)
The starting point for analyzing any prerecorded campaign, starting as of 9/1/09, is therefore: "Assuming that all of the calls I'm making are prohibited - does my campaign nonetheless meet any of the applicable exemptions?" (Note that charity calls by a third-party telemarketer seeking a donation from one of its members or previous donor get a free pass from the express writing requirement.)
The FTC's current practice regarding prerecorded calls (which will remain in place until 9/1/09) is to allow such calls (under certain guidelines) when made in the context of an established business relationship. Many companies have been making use of the FTC's "forbearance" policy with regard to such calls, but there's a twist starting as of December 1, 2008.
On this date, all such EBR prerecorded calls must allow the called consumer to, via an automated key press or voice-activated mechanism, assert a Do Not Call request to the company making the call. After 12/1/08, key press or voice-activated mechanisms are all that is allowed - simply providing the consumer with the ability to call a number to opt-out will no longer be enough.
As a new and interesting wrinkle, the FTC also decided to enter the previously unregulated "wild west" of answering machine messages. Specifically, the new FTC rules state that in any prerecorded telemarketing call "that could be answered by an answering machine," the telemarketer must make all required identification disclosures followed immediately by a disclosure of a toll-free number to be used for Do Not Call requests.
Interestingly, the FTC also decided that in any call "that could be answered in person," the automated key press or voice-activated Do Not Call opt-out mentioned above must be provided to the consumer answering the call. What the FTC failed to address, however, is the means by which telemarketers can reliably figure out, in real-time, which calls could be answered by an answering machine and which could be answered in person.
Perhaps the biggest news of this ruling is the FTC's abandonment of its per-day/per-calling campaign abandonment measurement rule. This new rule was met with a sigh of relief by telemarketers, since it enables a more reasonable approach to abandonment rate measurement. Rather than having to worry about relatively small campaigns that make it difficult to achieve the volume of calls necessary to truly maintain a reliable 3% rate, telemarketers can now combine calls within campaigns over successive 30-day periods.
For those popping champagne corks in celebration, there's an important caveat: the FTC's rules still do not match the FCC's more lenient standards. The FCC rule is broader - that is, a telemarketer must not abandon more than 3% of its telemarketing calls "over a 30 day period." This allows telemarketers to combine calls across campaigns, and the 30-day period in question is a rolling one.
The new FTC rule restricts the measurement to a "single calling campaign" ("campaign" being defined as an "offer of the same good or service for the same seller") over "successive" 30-day periods. For entities making millions of calls for single campaigns, these differences between the FTC and FCC may not amount to much - however, for smaller shops, the FTC's rules still take a larger compliance bite.
by Joseph Sanscrainte, an attorney with Bryan Cave, LLP, specializing in telemarketing law.
Having written recently in this space regarding the FCC's January 2008 ruling giving debt collectors the right to call cell phones, I think it's appropriate for me to provide an update on this issue.
When last we visited this issue, the FCC had provided an interpretation of the following language (from its regulations implementing the Telephone Consumer Protection Act (TCPA)):
No person or entity may initiate any telephone call (other than a call made for emergency purposes or made with the prior express consent of the called party) using an automatic telephone dialing system . . . (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. 47 CFR 64.1200(a)(1) (emphasis added.)
In response to a petition filed by ACA International, the FCC ruled that autodialed (and prerecorded) calls to wireless numbers "that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ?prior express consent' of the called party."The FCC concluded that under these circumstances: 1) the consumer has "knowingly released"his/her phone number; and 2) the call being made by a debt collector is part of "normal business communications."The combination of these two factors, at least in the context of debt collection calls, amounts to (at least according to the FCC) "prior express consent."
Enter the United States District Court for the Northern District of California. On May 20th, 2008, this Court issued a preliminary decision regarding the case of Leckler v. Cashcall, wherein Tricia Leckler had sued Cashcall for making debt collection calls to her cell phone using an autodialer and prerecorded messages without her consent. Both parties had moved for partial summary judgment on the question of whether Cashcall violated the TCPA when it placed telephone calls to Ms. Leckler's cell phone number using an automatic dialing system and prerecorded messages. The Court recognized that its answer to this question hinged on the propriety of the FCC's January 2008 ruling.
The Court pointedly did NOT accept the propriety of the FCC's ruling, finding instead that the FCC's construction of prior express consent was both "manifestly contrary to the [TCPA] and unreasonable, because it impermissibly amended the TCPA to provide an exemption for . . . ?implied' consent and flew in the face of Congress' intent."
In other words, the FCC was just plain wrong when it gave debt collectors the right to call cell phone numbers (using autodialed or prerecorded calls) when those numbers were provided to the entity responsible for the debt collection call during the transaction that resulted in the debt. The Court found that "in order for the exemption to apply, the called party must expressly consent not only to receiving telephone calls, but to receiving calls made by a caller using an autodialer or prerecorded message."
To make this restrictive ruling even clearer, it's important to point out that Ms. Leckler had written a letter to Cashcall in which she stated "I appreciate you contacting me as soon as possible on my cell phone."(Yes, you read that correctly!) The CA Court ruled that since Ms. Leckler did NOT say "call me via autodialer and/or prerecorded message on my cell phone,"Cashcall was prohibited from employing either technology in calling her wireless device.
Where does this leave the industry? First of all, we know that the FCC's debt collection ruling has been overturned by one Federal District Court, and that this Court ruling applies to calls made into the Northern District of California. The FCC's ruling, however, still applies (at least in all jurisdictions other than Northern California) - however, there is now a very compelling precedent that will enable plaintiff's in other jurisdictions to seek to overturn the FCC's ruling. In other words, Leckler should give pause to those entities using autodialers and/or prerecorded messages to attempt to collect on outstanding debts.
What about calls made for purposes other than debt collection? The FCC's January 2008 ruling was, arguably, a limited one that applied only to debt collection calls - attempting to apply it to other types of standard telemarketing may therefore be problematic. And it would appear certain that the CA District Court would apply the same calculus to standard telemarketing calls that it did to debt collection calls.
Alas, once again, as we have seen so often in the teleservices legal arena, the waters have been muddied. Stay tuned . . . in the meantime, the conservative approach would be for debt collection firms to suppress cell phones from automated dialing devices, and working with third-party data experts such as Contact Center Compliance to ensure that real-time data is being used and proper tracking is in place is recommended.
by Joseph Sanscrainte, an attorney with Bryan Cave, LLP, specializing in telemarketing law.
A wise man (ok, actually Buckaroo Bonzai) once said "No matter where you go, there you are." Seems like it would be hard to argue with a rock-solid truism like this, but think about it from the perspective of a telemarketer trying to contact a consumer - can a telemarketer count on a consumer being exactly where their database information says they should be?
The use of wireless phones, along with the advent of number portability in 2003, has blurred what was once a very clear connection between area code and associated geographic region in the United States. There is in fact, at this time, no guaranteed means by which a given telephone number can be associated or "tied" to a given geographic location in the United States.
Cell phones, by their very nature, enable a consumer to move across the United States, either temporarily (e.g., for travel) or permanently, without having to change the area code being used by the phone. At the same time, number portability allows consumers to transfer a landline number to a wireless device, with the same result in terms of transportation of the wireless device. Finally, according to at least one authoritative source, number portability would also allow consumers to port their landline number from one geographic location to another landline location. For example, a consumer living in California in a 415 area code could port his/her number to their new landline phone in New York City - persons who dial the 415 area code, expecting to be reaching a California number, would in fact be reaching New York City.
Simply put, the connection between "area code" and the anticipated location of a consumer being contacted at that area code is growing ever more tenuous. From a telemarketing perspective, this raises very serious questions with regard to the ability of marketers to reliably reach consumers within the proper time frame, as required under state and federal laws.
It is helpful to look at the issues associated with matching a given consumer's location and applicable calling time restrictions from two perspectives, based upon the type of telephone service being used by the consumer.
The first issue is landline specific - that is, consumers now have the ability to port a phone number from one location to another, independent of the standard area codes and exchanges historically reserved as per the mandates of the North American Numbering Plan (NANP) as administered by Neustar.
The second issue has to do with the nature of wireless service - the wireless device moves with the consumer and can, in fact, be "located" anywhere the consumer happens to be. Wireless device numbers do not therefore need to be ported in order for a consumer to make use of them from different geographic locations - the device simply keeps functioning independent of location. The ability to port numbers from landline to wireless services serves only to exacerbate the underlying area code v. time zone dilemma.
Current state and federal rules simply do not incorporate recognition of the problem posed by number portability in the context of either landline or wireless numbers. These rules view the location of the consumer from a static perspective - i.e., at any given time, the location of the consumer being called can be known by the entity making the call. This is currently not the case, and over time, this situation will worsen.
Compliance with calling time restrictions against the backdrop of wireless usage and number portability therefore becomes, in the absence of further action by legislators, a question of "best practices." Companies need to start taking a look at mis-matches between addresses and area codes in their lead lists (as well as VoIP and call-forwarding issues), and tailor their calling campaigns and policies to best fit state and federal calling time restrictions.
From the telemarketer's perspective, a consumer may or may not be where they appear to be (sorry about that, Buckaroo.) For any company looking to solve this problem, keep one thing in mind - the devil is in the details!
|
 |
|
|
