Are You Helping Your Referral Sources?

Are You Helping Your Referral Sources?

February 19, 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 (, 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
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
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