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Are You Helping Your Referral Sources?

National Mortgage Professional
Feb 20, 2002

Do-not-call compliance: Understanding the Roger Risleydo-not-call registry, regulatory compliance, FTC, FCC The National Do-Not-Call (DNC) Registry went into effect in October 2003 and currently there are 86 million phone numbers on the list. According to the Federal Trade Commission's Web site (www.ftc.gov), the National DNC Registry applies to "any plan, program or campaign to sell goods or services through interstate phone calls. This includes telemarketers who solicit consumers, often on behalf of third-party sellers. It also includes sellers who provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment." The Federal Communications Commission (FCC) also has oversight responsibility of the registry. In fact, in March 2005, the FCC sought a fine of $770,000 against Dynasty Mortgage for allegedly calling consumers who had placed their phone number on the National DNC Registry. Nonetheless, according to the Direct Marketing Association's 2004 Response Rate Report, telemarketing still has the highest response rate of the 12 types of media they tested. It also has the highest return on investment (ROI) for marketers driving direct-order purchases. In other words, it still pays to use the telephone as a marketing tool. But, don't let that lull you into a false sense of security. The overwhelming popularity of the national and state do-not-call registries clearly shows that consumers are fed-up with calls from companies that don't do their homework and improperly target their prospecting and sales efforts. There are only three exceptions to the National DNC Registry: political organizations, charities and telephone surveyors. If you don't fall into these categories, then you need to make sure that the consumer you're calling is not on the National DNC Registry, or your state's do-not-call registry if applicable. For those not covered by these exceptions, the FTC does provide three additional exemptions to the National DNC Registry: 1. A telemarketer or seller may call a consumer with whom they have an existing business relationship for up to 18 months after the consumer's last purchase, delivery or paymenteven if the consumer's number is on the National DNC Registry. 2. A company may call a consumer for up to three months after the consumer makes an inquiry or submits an application to the company. 3. If a consumer has given a company written permission, the company may call that consumer even if the consumer's number is on the National DNC Registry. This is where the misunderstanding comes in. What is the definition of an "existing business relationship"? It appears to be clearly defined above. But, what if you're a mortgage company that receives leads through existing relationships with real estate agents? In that case, unless the mortgage company and the real estate company are one and the same, the mortgage company is not the company that the consumer has a relationship with. Nor did the consumer make an inquiry of the mortgage company. The mortgage company cannot call the consumer without violating the National DNC Registry! Another example might be a large company that has multiple divisions. Let's say they have a consumer banking division and an insurance division. If a consumer has a relationship with the banking division, the insurance division cannot assume that the consumer has a relationship with them. They need to develop their own independent relationship with the consumer. Also, if a consumer asks a company not to call, that company may not call, even if there is an established business relationship. Indeed, if the consumer has asked to be put on the company's own in-house do-not-call list, then the company may not call the consumer regardless of whether their number is on the registry. Finally, FCC rules make it illegal to call cell phones. While this seems simple enough, how do you know a number is a cell phone? This is particularly a problem since the FCC began allowing consumers to "port" or move their telephone numbers from landlines to cellular phones. A mistake here can cost you a hefty fine! It is also important to note that before the creation of the National DNC Registry, several states had already passed their own do-not-call legislation. Today, there are 43 states that have do-not-call legislation. While many states use the National DNC Registry as their own, there are some states that do not. If you use the telephone to solicit consumers in one of these states, you must check the consumer's phone number against that state's do-not-call list to ensure you're not calling someone who has registered their phone number. While the fine for violating the National DNC Registry is up to $11,000 per occurrence, state fines vary widely. Also, exemptions for the states are different, so you should check with those states attorneys general offices or your attorney to ensure you are in compliance. Make sure you're abiding by the national and the state do-not-call laws or your company may pay a very high price! Roger W. Risley is executive vice president and partner at Kennett Square, Pa.-based Authtel Inc. He may be reached at (610) 925-5598 or e-mail roger@authtel.com.
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