Are You Telemarketing?

Mary Beth Guard, Executive Editor
Guru Bios

Use the checklist below to help you determine whether you are engaged in "telemarketing" or "telephone solicitation" as those terms are defined in the Telephone Consumer Protection Act of 1991 (TCPA) and the FCC's rules and regulations implementing the TCPA.



QUESTIONYESNO Do you initiate a telephone call to a residential number without permission to an individual with whom you do not have an "established business relationship" for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services? Does a third party, acting on your behalf, initiate a telephone call without permission to a residential number to an individual with whom you do not have an "established business relationship" for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services?

If the answers to the above two questions are no, our view is that you are not engaged in telephone solicitation or telemarketing as those terms are defined in the FCC rule in a way that subjects you to the requirement that you procure copies of the national DNC database and utilize it to scrub your lists. There are other requirements that may apply to you, however, as outlined below. If your answer to either question was yes, you must utilize the national list. Complete a thorough risk assessment and check with your bank's counsel for a more in-depth review of your practices.

Maintaining an Internal DNC List
If you are calling individuals under the existing business relationship exception, you need to maintain a company-specific Do Not Call List and you need to have a written policy, available on demand, for maintaining an internal do-not-call list. In addition, you need to train your personnel who are engaged in any aspect of telemarketing on the existence and use of that list, and if an individual requests they no longer receive calls from you, you must make a record of the request and place the individual's phone number (and their name, if they provide it) on your institution's DNC list at the time the request is made and you must honor that request within a reasonable time. Do you have to provide written confirmation you have placed the individual on the list? No, but if you're sending them the policy on demand anyway, it's not much more trouble to give them peace of mind by confirming you added them to your list.

Inbound/Outbound -- It Matters
The FCC's rule applies only to outbound calls -- i.e., calls or messages you initiate. We find no evidence that it applies to on-hold messages. Even if the rule arguably applied to comments your employees make while speaking to a consumer who called in to inquire about some other product or service, we believe those comments (which might be in the nature of cross-selling or upselling) would be permissible under the established business relationship exception, since that exception covers individuals who have made inquiries within the last three months, so long as the individual has not asked to be placed on your internal DNC list. Be careful, however, not all types of inquiries bring the call within the established business exception. See our definitional section for details. [FYI -- be thankful you aren't under the FTC's rule instead. It applies to both inbound and outbound calls. Note that if your bank contracts with a third-party nonbank to provide telemarketing services for you, that third-party company will be covered under the FTC's rule.]

Personal Relationship Exception
Making an unsolicited call to a person with whom you have a personal relationship (family, friend, etc.) is another exception to the general requirement to obtain the DNC list and use it. Even a person with whom you have a personal relationship may, however, ask to be put on your company's internal DNC list. See our definitional section for more details.

Prior Express Invitation or Permission
There's another out. You can make a telephone solicitation to any person with that person's prior express invitation or permission.

Unsolicited Faxes
When it comes to unsolicited faxes, it doesn't matter whether you're a telemarketer or not, or whether you're sending them to someone with whom you have an established business relationship. If you don't have separate, signed authorization, you're in violation of the rule if you send an unsolicited advertisement to a fax machine. Since this part of the rule doesn't reference consumers or residential subscribers or residential lines, it arguably would apply to unsolicited faxes to businesses as well, but that might be beyond the scope of the Act the rule is supposed to be implementing, so we haven't reached a final conclusion on that issue yet.

Who Can Sue You -- and Where?
Unfortunately, the Telephone Consumer Protection Act of 1991 provides a private right of action. It allows an individual to sue for an injunction, for damages, or both, in his own state court, if otherwise permitted by the laws or rules of a court in his state. That means you could end up being dragged into court in various and sundry places and, even if you're in full compliance with the law and the consumer can't successfully make a case against you, you'll have to get creative to recoup costs and attorney's fees. The individual's private right of action is explained under 47 USC Section 227(b)(3), as follows:

(3) Private right of action
A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State?
(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,
(B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or
(C) both such actions.
If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.