Once upon a time, before the National Do-Not-Call regulations and the Telephone Consumer Protection Act, 47 USC 227 and 47 CFR 64.1200, business were free to “cold call” consumers to introduce them to new products and services. Those days are long past, and more importantly, cold calling landline or mobile numbers on even your old leads can create tremendous liability for you and your company. Despite these regulations, I still find myself frequently the recipient of such cold calls regarding a mortgage, and when queried, the callers often have never even heard of TCPA. It’s mind boggling! Understanding these regulations are critical for anyone in business given the rash of Federal Class action lawsuits against corporations from professional litigants looking to extort your company.
Background on the TCPA
The TCPA and its implementing rules impose limitations on calls placed to both residential and wireless telephone numbers. The TCPA prohibits telemarketing calls made using an artificial or pre-recorded voice to residential phones, without prior express consent. The TCPA also prohibits making non-emergency calls using an automated telephone dialing system or artificial or pre-recorded voice to a wireless telephone number without prior express consent. If the call to the wireless number includes an advertisement or is considered telemarketing, the express consent must be in writing. Failure to comply with these rules results in automatic penalties ranging from $500 up to $1,500 per unsolicited call placed if you disregard TCPA compliance. Unlike DNC penalties, this is not a fine for the calls you made to the specific complainant, but rather EVERY call you made to anyone’s mobile number since TCPA was updated in Oct of 2013, if the Class is certified in litigation. Even if compliant, the costs of defense are enormous and litigants often file these as a way to extort $50,000 or more from companies, as judgments can be in the hundreds of millions of dollars and take years in court. Calling under the pretext of a “survey” to generate a sales opportunity is also prohibited. TCPA includes uninvited text messages.
On July 17, 2015, the FCC issued new rules regarding TCPA in an attempt to clarify this area of law. While the new rule results in a number of changes to the TCPA, none is more significant than the broadening of the definition of an “automated telephone dialing system” (ATDS). In simplest terms, the FCC now defines an ATDS as any equipment that is actually or potentially able to dial random or sequential numbers – even if not actually used that way, and even if it must be altered in order to be capable of doing so. In essence, your iPhone can be considered an automated dialer in certain circumstances. Given the fact the US economy relies on consumer spending for 70% of total GDP, these laws are not only stifling our economy in my view, but placing undue burdens on legitimate businesses. Bottom feeding lawyers and professional litigants are clogging up the courts with these cases due to the extremely high value of potential judgments.
TCPA and Lead Generation
As a lead generator, compliance for our online Reverse Mortgage leads is a primary concern to protect our advertisers. Under TCPA, a consumer must provide written Express Consent to be called, and must also have Informed Consent. In other words, they must have the ability to know who may be calling before they submit their information online authorizing contact. Buying old data from unknown generators, trigger data, or modeled credit data is very risky as there is no Informed or Express Consent to call these consumers. Working with our compliance attorney, we have taken several steps to ensure our clients are protected when they call our leads. Some of these practices should be implemented on your own websites if you generate leads organically. I highly recommend consulting a compliance attorney familiar with TCPA compliance, as this article is not intended to provide legal advice, and I am not a lawyer.
Since Epath Digital does not buy leads from 3rd parties and we only generate leads on websites we own and control, we can ensure the consumer experience and that the resulting leads fall within the compliance rubric of TCPA. If you are buying leads from a third party, it is critical you perform diligence with them to make sure your company is listed on their website and that the website contains compliant TCPA language. There are many lead brokers who resell someone else’s data, and may not even know where the leads were generated and may not have the ability to get your company listed on the originating website, so do your diligence thoroughly! All of our web pages contain the following language next to the submit button:
By submitting this request for information, I hereby expressly consent to be contacted by email, auto-dialed and/or pre-recorded telephone calls, and/or SMS messages from or on behalf of <website name> and its Fulfillment Partners at the telephone number I provided above, including my cellular number, even if I am on a corporate, State or Federal Do-Not-Call list. I understand consent is not a condition of purchase.
Something substantially similar must be part of any website where leads are generated for you. The “Fulfillment Partners” link allows the consumer to have Informed Consent regarding who may be calling them regarding their request, as this is where we list our Reverse Mortgage advertisers. By submitting the form with this language, the consumer is providing written Express Consent to be called as defined by the FTC, as digital signatures, evidenced by a form submission have been deemed valid by the FTC & courts. In addition to this language on every one of our website submission forms, Epath Digital goes the extra mile for our clients by taking a screen shot of every web session in which the consumer submits their information. This proves unequivocally the compliance language was in place at the time of the web submission. Third party services like Trusted Form or LeadID can help you implement this code and process on your own website. Proof of written Express Consent must be kept for 5 years at a minimum by statute.
It is important to note that Express Consent once given, can be withdrawn by the consumer at any time. It is essential to train your staff so they are familiar with both DNC and TCPA, and how to handle an opt-out by a consumer. Most lead CRM systems have a “DNC” lead disposition which will quarantine that lead and the consumer’s phone number from being called again, but check to make sure your system has it and your staff understands how to use it. Also remember that after 90 days, the Safe Harbor provision of the Do-Not-Call statute expires, so unless you made contact and established an Existing Business Relationship (EBR), you will need to scrub your aged data against the DNC.
Sadly, it is impossible to be fully compliant with TCPA, even with the best processes in place. TCPA is also unlikely to be covered by your E&O insurance. In typical government fashion, the FTC & FCC do not have any understanding of how things work in the real world when they form these regulations. TCPA is 25 years out of date in my opinion, and protects mobile users from having telemarketers use up “valuable” cell phone minutes. In today’s world of unlimited calls and texts, I’m unclear how taking up a few seconds of a callers life can results in potentially hundreds of millions of dollars in potential damages. Major lenders are getting sued for allowing their collection companies call to collect on defaulted mortgages for example. These regulations are seriously flawed and overly burdensome to business.
Additionally, if a consumer opts-in and provides you with Express Consent, but then subsequently changes their mobile phone number and their old one winds up in the hand of a new consumer, you could still have TCPA liability. The new guidance on TCPA regulations allows you to make one phone call without penalty to a number used in this example. Even if the consumer does not answer or fails to inform you they are someone different than the original owner of the number, subsequent phone calls to that number will create TCPA liability. There is no database I am aware of that will tell you with certainty who owns a mobile number. The best phone number verification software only can provide a confidence score that the number is real and matched to the consumer, but cannot determine with certainty that information is currently valid.
The take-away from all this is that you need to establish written DNC and TCPA policies and provide training for your staff, as well as a process to vet lead and data providers when you acquire leads for your firm.