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FCC Also Remedies Confusion in Its Rulemaking Proposal by Ensuring New Rules Do Not Affect Non-Telemarketing Prerecorded Calls and Text Messages, Such as for Debt Collection, Airline and School Notifications, Fraud Alerts, Surveys Calls, and Wireless Usage Data

By Ronald G. London

The Federal Communications Commission released a Report and Order that revises its rules governing automated/prerecorded telemarketing to modify the consent and opt-out requirements for such calls.    The rule change eliminates the “established business relationship” exception that previously allowed autodialed/prerecorded telemarketing to residential lines.  Meanwhile, the FCC was careful to ensure the new rules cover only automated/prerecorded “telemarketing” calls and text messages, i.e., those that seek to sell or advertise goods or services, while leaving intact preexisting regulations for non-sales prerecorded calls, such as customer-care, surveys, calls by or on behalf of tax-exempt, non-profit entities, etc.
 

In short, the FCC’s R&O operates to:

• Revise its rules to require prior express written, signed consent for all autodialed/prerecorded telemarketing calls to wireless numbers and residential lines.  The consent must specify the phone number to which it applies, be signed (though anything satisfying the E-SIGN Act qualifies), and reflect willingness to receive prerecorded calls in a clear and conspicuous way.  The FCC also specified that the consent cannot be required, directly or indirectly, as a condition for purchasing any good/service.

• Adopt rules applicable to all automated/prerecorded telemarketing calls that allow consumers to opt out of future automated/prerecorded calls during the call.  This requires “promptly” offering an automated interactive keypress or voice-activated opt-out mechanism that permits the called party to make a company-specific do-not-call request.

• Revise the rules to limit permissible abandoned calls – i.e., live-agent auto- or predictive-dialed telemarketing calls that when answered by the consumer do not connect to a live agent within 2 seconds – by requiring calculating the 3% of such calls that are permissible on a per-campaign basis (rather than across all a telemarketer’s campaign, as previously). 

The new regulations mean the FCC prerecorded telemarketing call rules essentially mirror those the  FTC adopted in 2008, which we described in detail here, and have been in effect going on several years now. 

That said, some entities/industries fall outside the FTC’s jurisdiction (i.e., common carriers, banks/credit unions/S&Ls, the business of insurance), and to the extent they have telemarketed without using third-party call centers may not have been complying with the FTC prerecorded telemarketing rules – now, they must commence doing so under the FCC rules.  The FCC’s R&O also confirms that telemarketing text-messages fall within and must comply with the written, signed consent regime.

For any entity or conduct newly covered by the FCC rules, and to the extent they differ at all from the FTC version, the FCC adopted a phase-in, so compliance with the FCC prior written, signed consent obligation is required 12 months after OMB approval of the new rules appears in the Federal Register, compliance with the FCC automated opt-out rule must occur by 90 days after publication of OMB approval, and compliance with the FCC’s revised abandoned call calculation rule is required 30 days after Federal Register publication.

Also Reinforces That Telemarketing Sales Rule’s Caller ID Flexibility Only Goes So Far

The Federal Trade Commission (FTC) has announced a $500,000 settlement of a telemarketing enforcement action that it brought based on allegations that the telemarketer interfered with the right of consumers to be placed on companies’ internal do-not-call lists, and that it altered outgoing caller ID to inaccurately display the identity of the calling party. The enforcement action is a reminder that telemarketing customer service reps must be trained to be particularly sensitive to understanding – and effectuating – consumer requests to be added to a company’s do-not-call list, even they don’t request it in such specific terms.

The settlement resolves a complaint the FTC filed in the federal court for the Northern District of Illinois alleging that Americall, a telemarketer specializing in calls on behalf of banks, credit card issuers, insurance companies, and other financial institutions, violated the FTC’s Telemarketing Sales Rule (TSR).  The FTC alleged Americall “trains [its] representatives to interfere with entity-specific do-not-call requests” by instructing in training manuals that, absent other, more specific requests, consumer statements like “Don’t call me again,” “Don’t call me back,” or “I do not accept solicitation calls,” should not result in a consumer’s placement on the internal do-not-call list of the entity on whose behalf the agent has called.

In the FTC’s view, apparently, these and “similar statements”  are sufficient to require that the consumer’s phone number be logged on the company’s internal do-not-call list.  In other words, a consumer need not speak the magic words “put me on your do-not-call list,” or any similar invocation, but rather need only assert some general sentiment that the calling party not call again. 
But while one could certainly see a statement like “do not call me again” being treated as the equivalent of “put me on your do-not-call list,” is it really fair to say that “don’t call me back,” or the even less specific “I do not accept solicitation calls” all mean “put me on the list” as well?  “Don’t call me back,” for example, is rather non-specific – does it mean don’t call again ever, don’t call again with regard to your current campaign or offer, or even simply don’t call me again anytime soon?

“I do not accept solicitation calls” is an even more generic statement, particularly viewed in the context of whether a consumer is invoking his or her entity-specific do-not-call rights, as it does not even refer to the specific company calling.  Treating such non-company-specific language as a do-not-call request is even more curious given that any consumer who “does not accept solicitation calls” can effectuate that desire by being placed on the national (or a state) do-not-call registry.

Such musings, however, may well be irrelevant,  insofar as the FTC – the agency charged with enforcing its entity-specific do-not-all rules – appears to consider all the above sentiments sufficient to constitute a do-not-call request.  The bottom line, it seems, is that anytime a consumer expresses that s/he does want further calls, that statement  must be treated as a do-not-call request.  Accordingly, telemarketing agents should be trained to err more on the sides of caution and over-inclusiveness in what is treated as a do-not-call request.

The FTC’s complaint also charged that the telemarketer, armed with knowledge of the names of the companies on whose behalf it placed calls, and thus the ability to properly identify them in outgoing caller ID, altered the calling party name to disguise the identity of Americall and/or its client(s).  The complaint gave the example that, in some instances, when calling on behalf of a fire insurance company, the caller ID displayed the promotional phrase “Gas Rebate Center” to entice consumers to answer the phone.   While the TSR allows for the identity of either the telemarketer or the company on whose behalf the call is made, the name must fairly identify the caller – before the consumer picks up the phone.

The Americall settlement is a half-million-dollar reminder of the need to properly honor entity-specific do-not-call requests, as well as the need for accurate call ID.  The settlement also imposes five years’ worth of record-keeping obligations.  In its press release announcing the settlement, the Director of the FTC’s Bureau of Consumer Protection, David Vladeck, expressed that “When it comes to the Do Not Call provisions, compliance is not rocket science.”  Nonetheless this case reinforces the need to for companies to stay ever vigilant regarding their telemarketing practices.

FCC Also Remedies Confusion in Its Rulemaking Proposal by Ensuring New Rules Do Not Affect Non-Telemarketing Prerecorded Calls and Text Messages, Such as for Debt Collection, Airline and School Notifications, Fraud Alerts, Surveys Calls, and Wireless Usage Data

By Ronald G. London

The Federal Communications Commission released a Report and Order that revises its rules governing automated/prerecorded telemarketing to modify the consent and opt-out requirements for such calls.    The rule change eliminates the “established business relationship” exception that previously allowed autodialed/prerecorded telemarketing to residential lines.  Meanwhile, the FCC was careful to ensure the new rules cover only automated/prerecorded “telemarketing” calls and text messages, i.e., those that seek to sell or advertise goods or services, while leaving intact preexisting regulations for non-sales prerecorded calls, such as customer-care, surveys, calls by or on behalf of tax-exempt, non-profit entities, etc.
 

In short, the FCC’s R&O operates to:

• Revise its rules to require prior express written, signed consent for all autodialed/prerecorded telemarketing calls to wireless numbers and residential lines.  The consent must specify the phone number to which it applies, be signed (though anything satisfying the E-SIGN Act qualifies), and reflect willingness to receive prerecorded calls in a clear and conspicuous way.  The FCC also specified that the consent cannot be required, directly or indirectly, as a condition for purchasing any good/service.

• Adopt rules applicable to all automated/prerecorded telemarketing calls that allow consumers to opt out of future automated/prerecorded calls during the call.  This requires “promptly” offering an automated interactive keypress or voice-activated opt-out mechanism that permits the called party to make a company-specific do-not-call request.

• Revise the rules to limit permissible abandoned calls – i.e., live-agent auto- or predictive-dialed telemarketing calls that when answered by the consumer do not connect to a live agent within 2 seconds – by requiring calculating the 3% of such calls that are permissible on a per-campaign basis (rather than across all a telemarketer’s campaign, as previously). 

The new regulations mean the FCC prerecorded telemarketing call rules essentially mirror those the  FTC adopted in 2008, which we described in detail here, and have been in effect going on several years now. 

That said, some entities/industries fall outside the FTC’s jurisdiction (i.e., common carriers, banks/credit unions/S&Ls, the business of insurance), and to the extent they have telemarketed without using third-party call centers may not have been complying with the FTC prerecorded telemarketing rules – now, they must commence doing so under the FCC rules.  The FCC’s R&O also confirms that telemarketing text-messages fall within and must comply with the written, signed consent regime.

For any entity or conduct newly covered by the FCC rules, and to the extent they differ at all from the FTC version, the FCC adopted a phase-in, so compliance with the FCC prior written, signed consent obligation is required 12 months after OMB approval of the new rules appears in the Federal Register, compliance with the FCC automated opt-out rule must occur by 90 days after publication of OMB approval, and compliance with the FCC’s revised abandoned call calculation rule is required 30 days after Federal Register publication.

Also Reinforces That Telemarketing Sales Rule’s Caller ID Flexibility Only Goes So Far

The Federal Trade Commission (FTC) has announced a $500,000 settlement of a telemarketing enforcement action that it brought based on allegations that the telemarketer interfered with the right of consumers to be placed on companies’ internal do-not-call lists, and that it altered outgoing caller ID to inaccurately display the identity of the calling party. The enforcement action is a reminder that telemarketing customer service reps must be trained to be particularly sensitive to understanding – and effectuating – consumer requests to be added to a company’s do-not-call list, even they don’t request it in such specific terms.

The settlement resolves a complaint the FTC filed in the federal court for the Northern District of Illinois alleging that Americall, a telemarketer specializing in calls on behalf of banks, credit card issuers, insurance companies, and other financial institutions, violated the FTC’s Telemarketing Sales Rule (TSR).  The FTC alleged Americall “trains [its] representatives to interfere with entity-specific do-not-call requests” by instructing in training manuals that, absent other, more specific requests, consumer statements like “Don’t call me again,” “Don’t call me back,” or “I do not accept solicitation calls,” should not result in a consumer’s placement on the internal do-not-call list of the entity on whose behalf the agent has called.

In the FTC’s view, apparently, these and “similar statements”  are sufficient to require that the consumer’s phone number be logged on the company’s internal do-not-call list.  In other words, a consumer need not speak the magic words “put me on your do-not-call list,” or any similar invocation, but rather need only assert some general sentiment that the calling party not call again. 
But while one could certainly see a statement like “do not call me again” being treated as the equivalent of “put me on your do-not-call list,” is it really fair to say that “don’t call me back,” or the even less specific “I do not accept solicitation calls” all mean “put me on the list” as well?  “Don’t call me back,” for example, is rather non-specific – does it mean don’t call again ever, don’t call again with regard to your current campaign or offer, or even simply don’t call me again anytime soon?

“I do not accept solicitation calls” is an even more generic statement, particularly viewed in the context of whether a consumer is invoking his or her entity-specific do-not-call rights, as it does not even refer to the specific company calling.  Treating such non-company-specific language as a do-not-call request is even more curious given that any consumer who “does not accept solicitation calls” can effectuate that desire by being placed on the national (or a state) do-not-call registry.

Such musings, however, may well be irrelevant,  insofar as the FTC – the agency charged with enforcing its entity-specific do-not-all rules – appears to consider all the above sentiments sufficient to constitute a do-not-call request.  The bottom line, it seems, is that anytime a consumer expresses that s/he does want further calls, that statement  must be treated as a do-not-call request.  Accordingly, telemarketing agents should be trained to err more on the sides of caution and over-inclusiveness in what is treated as a do-not-call request.

The FTC’s complaint also charged that the telemarketer, armed with knowledge of the names of the companies on whose behalf it placed calls, and thus the ability to properly identify them in outgoing caller ID, altered the calling party name to disguise the identity of Americall and/or its client(s).  The complaint gave the example that, in some instances, when calling on behalf of a fire insurance company, the caller ID displayed the promotional phrase “Gas Rebate Center” to entice consumers to answer the phone.   While the TSR allows for the identity of either the telemarketer or the company on whose behalf the call is made, the name must fairly identify the caller – before the consumer picks up the phone.

The Americall settlement is a half-million-dollar reminder of the need to properly honor entity-specific do-not-call requests, as well as the need for accurate call ID.  The settlement also imposes five years’ worth of record-keeping obligations.  In its press release announcing the settlement, the Director of the FTC’s Bureau of Consumer Protection, David Vladeck, expressed that “When it comes to the Do Not Call provisions, compliance is not rocket science.”  Nonetheless this case reinforces the need to for companies to stay ever vigilant regarding their telemarketing practices.

In a move that will no doubt please many consumers, on February 15, 2012, the Federal Communications Commission approved a new set of rules aimed to substantially curb the practice of telemarketers to engage in “robocalling”, or the placing of automatic, pre-recorded calls. The key development in the FCC’s 48 page Report and Order is that now, prior to initiating a “robo call”, a telemarketer must obtain the consumer’s express written consent.  This new requirement of express written consent supplants the previous robocalling regime, where merely having an “existing business relationship” with a consumer was sufficient to create an exemption from the ban against robocalling; that exemption has now been eliminated under the rules. 

In addition to the new requirement of express written consent, robocallers must also offer the consumer an “opt-out” mechanism to provide them with the ability to end the call speedily, as well as a way for the consumer to have their telephone number automatically added to the telemarketer’s “do not call” list.

The new rules don’t entirely eliminate robocalling absent express written consent, however; there are still some permissible exemptions. For instance, non-profit organizations, schools, political groups and other groups initiating “informational calls” (such as notification of an emergency) can still initiate robocalls to a consumer’s landline (but can no longer robocall a cellular phone).

The new rules (which have been enacted pursuant to the FCC’s rulemaking authority under the Telephone Consumer Protection Act) don’t take effect immediately. There are two phases: First, within 90 days from the date the new rules are published in the Federal Register, telemarketers are required to implement the above-mentioned “opt-out” mechanism. Then, one year from the publication date, robocalls must obtain express written consent, and can no longer rely on the “existing business relationship” exception.

A slew of lawsuits and a federal investigation have put  payment protection programs on an unpredictable course.

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