Practice Tips for Nonprofit and For-Profit Businesses Who are Using Telemarketing Strategies

 

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It is dinner time at the Hubbard home. And like clockwork, right before the evening grace, a telemarketer’s call arrives. Since the 1980s, with the advents of the autodialer (which can automatically dial/text a self-generated telephone number) and the robocaller (which can automatically dial/text a self-generated telephone number and play a recorded message), this was a common experience.[1] With the use of equipment that can create and dial ten-digit telephone numbers randomly or sequentially, a single firm could handle 50,000 calls an hour.[2] As an industry, “more than 300,000 solicitors call more than 18 million Americans each day.”[3] Thus, it is clear to see how useful autodialers and robocalls have been in the telemarking industry, and particularly, how useful it can be in drumming up business for for-profit companies and soliciting donations for tax-exempt non-profits. 

 One must be cognizant, however, of the potential hazards with using these devices. The Telephone Consumer Protection Act (“TCPA”) was enacted to protect individuals from harmful telemarketing solicitations[4] by restricting abusive practices.[5] While autodialers modernized commercial telemarketing by allowing companies to dial/text random or sequential blocks of telephone numbers automatically, Congress found such practices to threaten public safety by tying up lines for emergency services.[6] Accordingly, the TCPA has three key restrictions.

1.     It is unlawful to make calls made for telemarketing purposes to those persons on the National Do Not Call Registry (“DNC”).[7]

2.     It is unlawful to make prerecorded calls to residential or wireless lines without the prior express consent of the called party. Likewise, it will be unlawful to not provide an option to revoke consent.[8]

3.     It is unlawful to conduct telephonic solicitations with the use of an autodialer without the prior express consent of the called/texted party.[9]

 As a result, firms and individuals found to have violated the TCPA may be sued and can be liable for the actual monetary loss the called party accrued from each violating call they have received, or receive $500 in damages for each violating call, whichever is greater.^[10] The damages would be tripled if the court found that the defendant willfully or knowingly violated the statute.^[11]

 Preventative Measures 

Whether a business is making their own telemarketing solicitations, or contracting out the services, it is prudent that businesses act appropriately to ensure that they are not unwittingly subjecting themselves to liability.

 Top 3 Practice Tips for For-Profit Businesses

 1.     Implement a DNC Cross-Checking Policy: Federal regulations provides a safe harbor provision if a business calls a person on the DNC list accidentally and the business can show they have adopted proper business practices to avoid violating the TCPA.[12] Therefore, it is vital that companies ensure that their employees or independent contractors have:

a.     Establish and implemented written procedures to comply with the national do-not-call rules;

b.     Trained their personnel, and any entity assisting in their compliance, in procedures Established pursuant to the national do-not-call rules;

c.      Search the National Do Not Call Registry at least once every 31 days and drop phone numbers of consumers who have registered from their call lists;

d.     Maintain and record a list of telephone numbers that the company may not contact.[13]

 This is a non-exhaustive list. Companies should seek the advice of a qualified attorney to determine if additional actions are available in your situation.

 2.     Understand That DNC Compliance is Separate from Autodialing Compliance: Even if calling a number does not violate the DNC provision, companies may not use an autodialer unless the consumer has provided express consent.[14] Therefore, it is vital that companies ensure that their employees or independent contractors understand that they must have the prior consent of the called party before using an autodialer.

3.     Likewise, there are Separate Requirements for Pre-Recorded (Robocalls) Calls: Like autodialers, robocalls require the prior express consent of the called party.[15] But a company must also ensure that the recorded message begins with (i) identifying the organization that is responsible for the call, and (ii) provide the telephone number for the organization responsible for the call.[16]

             Top 3 Practice Tips for Tax-Exempt Non-Profit Organizations

 Since the TCPA was meant to target commercial telemarketing activities, it has left an exemption for tax-exempt non-profit organizations such as charities or religious groups.[17] Therefore, calls made by or on behalf of a tax-exempt nonprofit organization are exempt from TCPA liability. Nevertheless, certain actions will disqualify these organization from its exemptions; thus, it is prudent that these organizations remain vigilant to their solicitation practices.[18] 

1.     Ensure that the Call is Made for Purely Non-Commercial Purposes: If part of the call involves a sale of a good/service, even if the proceeds go to charity, the call will be considered a commercial solicitation and DNC restrictions apply.

2.     Best Practice is to Get Prior Express Consent: Despite an exemption, as a matter of best practice it is advisable to obtain prior express consent before using an autodialer or robocall if possible since this meets the higher standard for telemarketing calls.

3.     Pre-Recorded Calls are Still Subject to Identification Requirements: Unlike the consent requirement, there is no such exemption for the identification requirement. Therefore, it is vital that companies ensure that their employees or independent contractors are meeting the guidelines before using a robocaller.[19]

 

By: Justice Hubbard 

 

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[1] See Caroline E. Mayer, Telemarketers Just Beginning to Answer Their Calling, Wash. Post (August 31, 1997), https://www.washingtonpost.com/archive/business/1997/08/31/telemarketers-just-beginning-to-answer-their-calling/c64bab4b-cc8a-497a-be8c-15b5eb26fedd/.

[2] Id.

[3] Barr v. Am. Ass'n of Political Consultants, Inc., 140 S. Ct. 2335, 2344 (2020) (citing TCPA, § 2, PP 3, 6, 105 Stat. 2394, note following 47 U.S.C. § 227 (2018)).

[4] See 47 C.F.R. 64.1200(f)(11) (Telemarketing means the “initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person”).

[5]  Scott J. Sheltra, Comment, A (Solicited) Call for Clarity: The Definition of Automatic Telephone Dialing System After Gadelhak, 62 B.C. L. Rev. E. Supp. 62, 63-64 (2021).

[6] H. R. Rep. No. 102-317, p. 24 (1991)

[7] See 47 U.S.C. § 227(c)(5); see also 47 C.F.R. § 64.1200(c)(2); see also 47 C.F.R. § 64.1200(e) (The TCPA directs the Federal Communication Commission to oversee and conduct regulations that protect consumer’s privacy rights through a do-not-call system).

[8] 47 U.S.C. § 227(b)(1)(A).

[9] Id.

[10] Id. at (b)(3)(B)

[11] 47 U.S.C. § 227(b)(3)(B).

[12] 47 C.F.R. § 64.1200(c)(2)(i).

[13] Id.

[14] 47 U.S.C. § 227(b)(1)(A).

[15] Id.

[16] 47 U.S.C. § 227(d)(3)(A).

[17] 47 U.S.C. § 227(a)(4).

[18] See Lewis S. Weiner & Wilson G. Barmeyer, Calling Toll-Free: Special Rules for Nonprofits Offer Safe Harbor from TCPA Liability, Eversheds Sutherland, (Dec. 6, 2017) https://us.eversheds-sutherland.com/mobile/NewsCommentary/Legal-Alerts/206831/Calling-Toll-Free-Special-Rules-for-Nonprofits-Offer-Safe-Harbor-from-TCPA-Liability; see also DMA Non-Profit Federation, Telephone Consumer Protection Act (TCPA) for Nonprofits Factsheet, DMA Non-Profit Federation, https://nonprofitfederation.org/wp-content/uploads/2017/05/TCPA-Factsheet.pdf.

[19] Id.