Non-bank Verbal Cross-sell

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Question:

If a non-bank call center wants to inform customers of an FDIC insured product their affiliate bank offers, and they do it verbally, is it considered an ad? This is part of the script: "I would like to let you know that ABCD Bank has several choices to allow you to secure your savings with full FDIC insurance protection and still get industry leading rates. For example, the current APY for a 12-month CD is ***%." Must they state the minimum amount and penalty for early withdrawal because of this trigger term or are they ok since they are not a bank?

Answer:

A rose is a rose is a rose, and an advertisement is an advertisement ... you get the message, right? Some thoughts:

Don't refer to "full FDIC insurance." Deposits are not insured in full. They are insured to the legal limit per depositor.
You don't get a "pass" on saying the full phrase "Annual Percentage Yield" at least once in the script.
You have pulled the trigger on the requirement to disclose other information. That doesn't go away just because the ad is being "read" by a non-bank.
There's no "short list" of triggered disclosures for an oral ad unless it's on a voice response unit.

The long and short of it is that the bank needs to ensure that the script read on its behalf complies with the advertising regulations.

First published on BankersOnline.com 12/15/08