Telemarketers Misuse Do Not Call Registry Exemptions

Telemarketers Misuse Do Not Call Registry Exemptions

The Telephone Consumer Protection Act began in 1991 and was the first method of regulation for the telemarketing industry. Consumers who want to opt-out of sales calls can submit their phone number and then telemarketers cannot ever legally call them with the intention of selling a product or service again.

According to the FTC’s biennial report on the Registry to Congress, numerous companies have tried to take advantage of the exceptions to the Telemarketing Sales Rule (TSR). This is dangerous because these businesses have been subjected to stiff penalties for their illegal actions. Organizations that are involved in telemarketing strategy should make sure that they are familiar with the TSR and the exemptions. It’s necessary to take the time to ensure that business practices are in compliance in order to avoid legal trouble and hefty fines.

An exception exists, however, for organizations that have an established business relationship with a consumer. In that circumstance, the business may call customers who have recently purchased items and they also are permitted to return phone calls to potential clients who have requested information, even if the customer’s phone number is on the registry.

Established Business Relationship

The FTC found that organizations regularly misuse this exemption through soliciting customers on the phone who already have a relationship with one subsidiary in the company’s legal entity, but the business that calls is a different one entirely within the same company. The problem is that the customer hasn’t ever done business with the entity that calls, and they perceive the two to be different.

Lead Generators Not Monitoring the Do Not Call Registry

Occasionally, businesses will purchase leads from lead generators that don’t even screen the leads for which ones don’t want to be solicited to and are on the registry. Though customers could have a connection to the lead generator, they don’t yet have any relationship at all with the business that acquired the leads. In this instance, just one sales call would be illegal.

Also explained in the FTC’s report was that an entry form for a contest doesn’t initiate an “established business relationship” between the business holding the contest and the customer. Many consequences from law enforcement have been brought against businesses that have made telemarketing calls illegally depending on the contest entry form as a reason to make the calls.

Hundreds of individuals and businesses that made these unsolicited calls were even sued by the FTC, who has won more than a million dollars in litigation through the process.

Further, the FTC has begun plans to implement a solution for robocalls that is more technology-based. They are encouraging individuals who are tech-savvy to create tools that can deter these automated solicitations completely and to help track robocallers who do keep calling illegally.

The consequences are high for those not abiding by the law. People who make an illegal robocall or who violate of the National Do Not Call Registry could face fines of $40,654 for each call.