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Steering Clear of Federal Telemarketing Fines Baltimore, MD

Last week, an Arizona HVAC company was ordered to pay $340,000 in civil fines for making over 25,000 illegal telemarketing calls between 2011 and 2015. The company blatantly ignored the federal Do-Not-Call Registry (DNC) and even worse, lied to many of those called by claiming exemption from the federal regulation. (The HVAC company was not alone – an Arizona carpet cleaning company conducting the same telemarketing was fined $1 million in a consumer lawsuit around the same time.)

Many years ago, ACCA published multiple guidelines to an assortment of federal rules passed in the wake of an avalanche of complaints by consumers over telephone, fax, and email solicitations. Starting in 2003, and continuing through 2005, several federal agencies instituted rules and regulations to protect the right of privacy of citizens in their own homes (and on their own personal cells) without being hounded by telemarketers.

We’d like to take this opportunity to remind our members to be aware of the Telephone Consumer Protection Act (TCPA), which regulates calls and faxes; the Telemarketing Sales Rule (TSR), which regulates the calls themselves; and the CAN-SPAM Act, which regulates commercial email messages.

The TCA is enforced by the Federal Communications Commission (FCC) and through private lawsuits and class actions; while the TSR and CAN-SPAM Act are enforced by the Federal Trade Commission (FTC) as well as through private lawsuits and class actions. These all sit atop a myriad of state do-not-call rules and have similar operable definitions to the federal rules.

The key to what defines restrictions and puts the DNC registry into effect depends upon the purpose of the call. Calls that are “telephone solicitations” or “outbound telephone calls” are subject to strict interpretation and far more restrictions than calls that do not fit these definitions.

The TCPA defines a telephone solicitation as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.” The TSR defines an outbound call as “a telephone call initiated by a telemarketer to induce the purchase or goods or services.”

One exception/exemption to the regulations for companies who utilize telemarketing as a part of their business is an “existing business relationship” with the consumer when it comes to DNC compliance.

Under both TSR and FCC rules, an “existing business relationship” exists when “(i) the consumer’s purchase, rental, or lease of the seller’s goods or services, or a financial transaction between the consumer and seller, is within the 18 months immediately preceding the date of telemarketing call; or (ii) a consumer’s inquiry or application regarding a product or service offered by the seller is within the three months immediately preceding the date of a telemarking call.”

Note that there is still a significant amount of confusion among consumers and marketers about the existing business relationship exemption. This arises most often when it is unclear whether a bona fide relationship exists.

Getting back to our guilty party, in addition to the civil fines imposed, the company was also banned from conducting any telemarketing for five years. That’s a long time not being able to make sales calls, and it is sure to hit your bottom line.





Article by Hilary Atkins (via acca.org)