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FCC Issues Order Clarifying Telemarketing Rules

The FCC recently issued an order that clarifies some of the amendments made last year to the rules relating to the Telephone Consumer Protection Act (TCPA). This alert highlights the changes or clarifications most likely to be of interest to advertisers and marketers.

In-House Do Not Call Lists
Under the TCPA, companies must maintain an in-house do not call list and must honor a request to be added to such list within 30 days of the request. In addition, companies must honor a do not call request for 5 years from the date of the request. The FCC clarified that this 5 year rule applies to all requests, whether made before the amendment took effect or after. This means that companies may delete telephone numbers on their in-house do not call list that are more than five years old.

Home-Based Businesses
The TCPA prohibits telemarketing calls to residential numbers that are on the national Do Not Call list. If a telemarketer calls a business number that has been inadvertently registered on the national Do Not Call list, such a call will not be considered a violation of the telemarketing rules. However, home-based businesses may present a problem. The FCC said it would not exempt calls made to home-based businesses that are registered on the national Do Not Call list; instead, the FCC will review calls to home-based businesses that are brought to its attention to determine whether the call was made to a residential phone number. This means that telemarketers that call a number registered on the national Do Not Call list because they believe it is a home-based business may be found to have violated the telemarketing rules.

Established Business Relationship
The TCPA provides an exemption from the restrictions on telephone solicitations for calls made to someone with whom the caller has an established business relationship. An established business relationship (EBR) lasts for 18 months after a purchase or transaction, or 3 months after an inquiry or application.

The FCC clarified that for financial agreements (including bank accounts, credit cards, loans, insurance policies and mortgages), the EBR lasts for as long as the financial agreement lasts, plus 18 months after the end of that agreement. For example, a bank will have an EBR with a customer who has an open bank account for as long as that account is open, even if there have been no transactions within the last 18 months, and such EBR will last an additional 18 months after the account is closed. The FCC said that financial agreements constitute an ongoing relationship, even if there are no transactions, for as long as the agreement is in effect, and that customers should not be surprised to receive a call about new products or services during the term of the agreement. Of course, consumers can terminate the EBR for purposes of telemarketing calls at any time by requesting that they be added to the company's own do not call list. (The FCC also clarified that any third-party intermediary, such as a mortgage or insurance broker, does not have an EBR for the duration of the financial agreement; instead such third party only has an EBR for 18 months after the transaction between the third-party and customer is completed.)

Artificial or Prerecorded Messages
The FCC reiterated that the TCPA prohibits calls made to residences using an artificial or prerecorded message without the prior express consent of the called party. The TCPA permits certain non-commercial calls and calls that do not transmit unsolicited advertisements; the FCC reiterated that offers for free goods or services that are part of an overall marketing campaign to sell property, goods, or services are not exempted.

The FCC declined to exempt prerecorded “information only” calls that describe an investment opportunity and ask a person to call a number for more information. The FCC stated that such prerecorded calls are clearly part of a marketing campaign, even if no sale is completed during such a call.

The FCC also reiterated that businesses must use their legal name to identify themselves. If a business uses a “doing business as” name, it must also provide its legal name.

Prerecorded calls sent by a radio or television station that tell someone to tune in to a particular program are allowed, unless the message encourages someone to listen to or watch programming for which consumers must pay (such as cable TV or satellite radio). The FCC reiterated that such messages would encourage consumers to pay to subscribe to the service and would be considered unsolicited advertisements under the TCPA.

Abandoned Calls
The TCPA requires that when a telemarketer abandons a call, the telemarketer must deliver a prerecorded message that is limited to name and telephone number, along with a notice that the call is for “telemarketing purposes.” A telemarketing call that leaves a prerecorded message with more information – such as “Hi, this is Company A, calling today to sell you our services” – might be construed as an unsolicited advertisement and would violate the rules. Therefore, the FCC strongly encourages telemarketers to use the words “telemarketing purposes” when delivering a prerecorded identification message for an abandoned call.

Wireless Telephone Numbers
The TCPA prohibits making a call using an automatic telephone dialing system or an artificial or prerecorded message to any wireless telephone number. The FCC clarified that this prohibition applies to numbers ported from a landline service to a wireless service. However, this prohibition does not apply to calls made to a landline telephone number that is forwarded, at the customer’s request, to a wireless number.

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

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