New Telemarketing Rules and Lead Generation · 2020-03-11 · Rules and Lead Generation ... online...

New Telemarketing Rules and Lead GenerationWritten Consent Requirements Require Better Records for Many Telemarketing CallBy Jonathan L. Pompan and Maura A. Marcheski Venable LLP Washington, DC

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Confidential and Proprietary. For information purposes only. Please do not copy or distribute further without prior express written permission from Jornaya™.©2016 Jornaya™, Jornaya.com & Jornaya™, Inc. All rights reserved.

When the new TCPA regulations came into place October 16, 2013,

Jornaya commissioned Venable LLC to write this paper in order

to help the industry sort through these regulations and identify

the areas that are most likely to create risk for parties who call

consumers.

Jornaya found there are several critical items a party should be

educated about before making calls to consumers, which Venable

has covered herein.

The key areas that need to be addressed to ensure TCPA

compliance include:

• Each lead event must have definitive disclosure and

consent information about that particular event - not

just general information about the website itself. This is

important because websites can provide different content

at different times based on the time of day, geography,

whether or not it’s a real consumer vs. crawler, and

multiple other reasons.

It is critically important that the calling party knows if this

particular lead event had the proper disclosures and

consent before dialing.

• The caller must know definitively what content was

displayed to the consumer from each particular lead

event, and how conspicuously it was displayed.

• The caller must know definitively whether or not what

was displayed is considered compliant or not based on

the rules set by the lead buyer, or calling party.

• Callers need the ability to take action in real-time

with all of the above definitive information. If you learn

after making the wrong call that you have committed

a violation, that does not really help you - you need to

know before you dial – without sacrificing speed-to-lead

operational efficiency.


Introduction

In October of 2013, significant changes to the

Federal Communications Commission’s (“FCC”)

rule implementing the Telephone Consumer

Protection Act (“TCPA”) went into effect,

bringing the issue of valid consumer consent

to the forefront of the minds of regulators and

class action attorneys alike. 1The changes

require prior express written consent for all

auto-dialed and prerecorded telemarketing

calls, as well as for text messages sent to

cell phones. The FCC’s rule requires prior

express written consent for all prerecorded

telemarketing calls placed to landlines. The

FCC has made it clear that the caller bears the

burden of proving consent.

In practice, these changes mean that now

more than ever, a telemarketer’s (i.e., online

lead buyers and some lead sellers) access to

authoritative consent records are essential for

legal compliance. It is equally important for

lead buyers to know that certain consumer

disclosures were present and that a consumer

provided his or her valid consent in real-time

before that lead is dialed.

For each non-compliant lead that is contacted,

the penalties the lead buyer could face

are significant. The TCPA may be enforced

by the FCC, state Attorneys General, and

private plaintiffs. Recent class actions alleging

violations of the TCPA have settled for tens

of millions of dollars. The TCPA provides

for between $500 and $1,500 in statutory

damages for each violation. TCPA cases have

generally been on the rise and filings have

continued to climb since new rule took effect

(suits increased 45% between 2014 and 2015).

If, for example, 10,000 leads are called through

an auto-dialer that are later found to be non-

compliant and the violation was willful, a class

action suit could cost the lead buyer upwards

of $15 million in statutory penalties alone. This

cost is separate and apart from any legal fees

the lead buyer would incur in the defense.

As a result, in order to confidently navigate

TCPA auto-dialing restrictions, marketers and

lead generators must be familiar with the rules

and understand the importance of obtaining a

consumer’s prior express written consent when

calling leads.

1The FCC regulations (47 C.F.R. § 64.1200) were

issued pursuant to the Telephone Consumer

Protection Act of 1991 (“TCPA,” 47 U.S.C. § 227),

available at http://hraunfoss.fcc.gov/edocs_

public/attachmatch/FCC-12-21A1.pdf.


New Telemarketing Rules

Outbound telemarketing calls to third-party generated leads are

subject to the TCPA. The TCPA currently prohibits using an auto-dialer

or artificial or prerecorded voice to place calls to a cell phone unless

the caller has obtained the prior express consent of the called party.

Telemarketers are required to have prior express written consent to

do the same thing. Telemarketers will also need this form of written

consent for all prerecorded telemarketing calls placed to landlines.

As a practical matter, this means that a purchaser of leads will face a

higher standard to prove that the consumer did, in fact, consent to be

called.

The FCC defines “prior express written consent” as:

[A]n agreement, in writing, bearing the signature of the

person called that clearly authorizes the seller to deliver

advertisements or telemarketing messages using an

auto-dialer, and the telephone number to which such

advertisements or telemarketing messages may be delivered.

(i) The written agreement shall include a clear and

conspicuous disclosure informing the person signing that:

(A) By executing the agreement, such person authorizes the

seller to deliver or cause to be delivered to the signatory

telemarketing calls using an automatic telephone dialing

system or an artificial or prerecorded voice; and

(B) The person is not required to sign the agreement (directly

or indirectly), or agree to enter into such an agreement as a

condition of purchasing any property, goods, or services.

The FCC defines “clear and conspicuous” as follows: “[A]

notice that would be apparent to the reasonable consumer,

separate and distinguishable from the advertising copy or

other disclosures.”2

Note that the “signature” requirement can be met by getting the

consumer’s signature in electronic or digital form, including on a

website. Also, note that the restriction applies to any system capable

of operating as an automated telephone dialing system, including

predicative and progressive dialers.

There are likely many different ways to comply with the 2013 rule, but

each variation will require some explicit language placed where it will

be readily apparent to the consumer (i.e., directly on a registration or

sign-up page), and is not buried among other disclosures or difficult to

identify among the rest of the copy on the screen.

2The “clear and conspicuous” disclosure requirement dovetails with the Federal Trade Commission’s (“FTC”) new guidance document for digital advertisers and marketers, called the “.com Disclosures: How to Make Effective Disclosures in Digital Advertising” (the “Disclosure Guide”). The Disclosure Guide can help lead generators make consent disclosures clear and conspicuous in order to avoid claims of false and deceptive marketing practices.


Background

Separate and exclusive from the 2013 change to the

FCC rule, the TCPA and Federal Trade Commission’s

(“FTC”) Telemarketing Sales Rule3 (“TSR”), also

prohibits (among many other things) placing a

telemarketing call to any residential or cell phone

number listed on the National Do Not Call (“DNC”)

list (available at https://telemarketing.donotcall.gov/)

unless the company has obtained the prior express

written consent of the person called or the marketer

has an established business relationship (“EBR”)

with the person called. Federal DNC rules require

marketers to check the national DNC list for updates

once every 30 days and to scrub their lists against

the national DNC list within 31 days of making any

telemarketing call if they don’t have an EBR with the

called party.

An EBR is formed by a voluntary two-way

communication between a company and a customer

that’s either based on the customer’s purchase of the

company’s product within the past 18 months (before

the telemarketing call), or based on the customer’s

inquiry about the company’s products within the past

three months (before the telemarketing call).

Also, an FTC staff advisory opinion letter stated

that with respect to internet lead generators, staff

would not recommend a DNC enforcement action

against a telemarketer that calls consumers who

had responded to a lead generator’s solicitation, if

the lead generator, among many things, made full

and adequate disclosure of certain material facts

about the consequences of responding to such

solicitations.

While many states have adopted the federal EBR

standard, some states have more restrictive EBR

standards or do not recognize the EBR exception at

all. Also note that an EBR will only help marketers

with the federal DNC requirements; an EBR cannot

cure the absence of prior, express written consent to

receive the call in the first place.

3 The FTC’s TSR (16 C.F.R. § 310) was issued pursuant to the Telemarketing and Consumer

Fraud and Abuse Prevention Act (15 U.S.C. § 6101 et seq.).


Don’t Forget about Do-Not-Call Rules

To prevent TCPA and TSR violations, marketers could manually dial calls

to wireless phone numbers (to those not listed on DNC), but that would

decrease operational efficiency and considerably increase costs. The

prevalence of wireless phones and the expense of manual dialing would

detract significantly from a marketer’s objectives.

On top of this, the FCC rule still applies to calls dialed from a disabled

automated dialer. On the other hand, lead generators that collect proof

of express written consent, can deliver powerful insights and encourage

compliance with the auto-dialing restrictions without compromising lead

certainty and productivity.

Therefore, access to authoritative prior express written consent records

before the lead is dialed, is essential to help mitigate a telemarketer’s

TCPA and TSR compliance risk and not sacrifice its bottom-line

objectives. But, due to the constantly changing and hard-to-verify nature

of consent data, marketers need a way to verify that the consent a

consumer provided at the time of the inquiry is still available if they make

calls using auto-dialers or prerecorded messages. While no specific

language or method of disclosure under the FCC rule has been tested or

confirmed as adequate, marketers need to consider several key factors

when evaluating records of prior express written consent, such as:

• The lead generator must obtain a clear and conspicuous agreement

that accurately reflects that the consumer will receive a telemarketing

phone call.

• The agreement must state the identities of the telemarketers;

that the telemarketing call may be by automatic telephone

dialing system; that the telemarketing call may be by an artificial

or prerecorded voice; and that the person is not required to sign

the agreement (directly or indirectly), or agree to enter into such

an agreement as a condition of purchasing any property, goods,

or services.

• The lead generator must obtain authorization with one of the

following: a signed paper agreement; an electronic means to

provide a signature in compliance with the E-SIGN Act, such

as a form that can be sent via electronic mail, a process on the

website, or non-prepopulated check box; or with another means.


What Does This Mean?

For more information on the key factors for

marketers to consider for evaluating records of

prior written consent, contact Jornaya to request

the Jornaya & Venable TCPA Worksheet.

A wide variety of federal and state laws regulate advertising and marketing practices. Certain laws

cast a wide net by broadly prohibiting unfair, deceptive, or abusive acts or practices. This article does

not provide guidance on how to evaluate whether a particular advertisement or marketing piece is

deceptive, unfair, abusive or otherwise violative of a law or rule, which will depend upon the specific

facts at hand.

Advertising and marketing is generally regulated pursuant to laws that are enforced by the FTC,

Consumer Financial Protection Bureau, other local, state (e.g., sweepstakes requirements), or other

federal laws and regulations (e.g., regulations issued by the Food and Drug Administration), and will

vary depending upon the nature of the advertising and marketing, including potentially the medium.

Given the quickly changing and high risk landscape of telemarketing, marketers should examine

their calling and text messaging practices and determine whether any changes will be required

to how consumer consent is presented and obtained. In addition, lead buyers and sellers should

carefully consider how prior express written consent is documented and retained before calling each

lead. With a rise of consumer consent-based enforcement and class actions on the horizon, more

companies will be required to “prove it” under the rule.

This material is for education purposes only. This article is not intended to provide legal advice or opinion and should not be relied on as such. Legal advice can only be provided

in response to a specific fact situation.


Closing Note on the Ever-Changing Advertising Landscape

leadid.com

About Jornaya

Jornaya is the consumer journey insight platform that provides marketers, data analysts, and com-pliance professionals with the highest-resolution view of the consumer buying journey. It is the only technology platform that witnesses both first- and third-party consumer interactions in real time and across devices. Meeting consumers at these moments of intent enables businesses to shorten the distance between data, decision, and action. Jornaya seamlessly integrates with any buyer journey

decisioning process or toolkit.

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New Telemarketing Rules and Lead Generation · 2020-03-11 · Rules and Lead Generation ... online...

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