Advertising by Telephone, Fax, and E-mail
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  • 1. Advertising by Telephone, Fax, and E-mail Member Legal Services Tel 213.739.8282 Fax 213.480.7724 October 7, 2003 Copyright© 2003 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R. Legal Department. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved. TABLE OF CONTENTS I. Introduction II. Telephone A. Applicability B. Consumer Information C. Requirements D. Enforcement III. Fax IV. E-mail V. Additional Information I. INTRODUCTION Success in the real estate business can depend greatly on the effectiveness of a REALTOR®’s advertising, whether it’s soliciting new clients by cold calling or disseminating flyers for new listings. If, however, that real estate advertising involves the use of the telephone, fax, or e-mail, the REALTOR® must comply with applicable state and federal laws. This legal memorandum provides a general overview of the legal and practical issues concerning advertising by telephone, fax, and e-mail. II. TELEPHONE Q 1. What is the law regarding advertising by telephone? A In December 2002, the Federal Trade Commission (FTC) ordered implementation of the highly-publicized national do-not-call registry for interstate calls. In July 2003, the Federal Communications Commission (FCC) generally extended these rules to include intrastate calls.
  • 2. As currently written, the FCC rules for both interstate and intrastate calls generally prohibit, among other things, telephone solicitations to people who have registered their residential telephone numbers on a national do-not-call registry (47 C.F.R. § 64.1200(c)(2) implementing the federal Telephone Consumer Protection Act of 1991). According to the FCC, American consumers strongly object to uninvited and unwanted telemarketing calls. In response to this public pressure, the FCC adopted the do-not-call registry to give consumers the opportunity to decide whether they want to receive telephone solicitations at home. A “telephone solicitation” is a telephone call that acts as an advertisement. It is broadly defined by the FCC as the initiation of any telephone call or message, unless exempt, “for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person” (47 C.F.R. § 64.1200(f)(9)). Hence, under the new rules, REALTORS® making telephone solicitations, such as those engaging in cold calling, must generally refrain from calling phone numbers on the do-not-call registry. Q 2. When do these laws take effect? A The do-not-call rules were generally scheduled to go into effect on October 1, 2003. The state of the law, however, is currently unclear, because of constant, late-breaking developments, including various lawsuits brought challenging the legality of these rules on constitutional and other grounds. To be prudent, REALTORS® should comply with the rules to the fullest extent possible. II A. APPLICABILITY Q 3. But I thought REALTORS® are exempt from the do-not-call requirements – am I right? A No. There are three do-not-call laws affecting California’s real estate practitioners: (1) California law; (2) the Federal Trade Commission (FTC) rules; and (3) the Federal Communications Commission (FCC) rules. Unlike the first two laws, the sweeping FCC rules do generally apply to REALTORS® engaged in telephone solicitations. First, in October 2001, the California legislature enacted a law requiring the establishment of a statewide do-not-call list. REALTORS®, however, are generally exempt from this law under the C.A.R.-sponsored “small business” exception. This small business exception applies to calls made within a 50-mile radius by either individual businesspersons or small businesses with “no more than five full or part-time employees or independent contractors” (Cal. Bus. & Prof. Code § 17592(e)(5)). Thus, a real estate salesperson is exempt as long as he or she does not personally employ more than five assistants, regardless of how many people work at that real estate company. For REALTORS® who do
  • 3. not fall within this small business exception, the state do-not-call requirements, including other exemptions, are fully set forth at California Business and Professions Code Sections 17590-95. Second, in December 2002, the FTC ordered the implementation of a national do-not-call registry. REALTORS® are also generally exempt from the FTC rules primarily because the rules only apply to interstate telephone calls (i.e., calls made across state lines) (16 C.F.R. § 310.2(cc)). These FTC rules for interstate calls are discussed below. Third, in July 2003, the FCC enacted new do-not-call requirements for both interstate and intrastate telemarketing calls. There are certain exemptions to the FCC rules as discussed below. These exemptions, however, are generally inapplicable to REALTORS® who make telephone solicitations, including what is commonly understood as cold calling. Q 4. If, as a REALTOR®, I am exempt from California’s do- not- call requirements, why would I have to comply with the federal do- not- call rules? A According to the FCC, the federal rules set a minimum standard “by operation of general conflict preemption law,” and therefore “supersede all less restrictive state do-not-call rules” (68 Fed. Reg. 44144 at 44155, para. 59 (2003)). Using this analysis, the California do-not-call rules generally exempting REALTORS® would arguably be less restrictive than the federal rules which do not have a REALTOR® exemption, and thus, under the FCC’s rationale, California’s REALTORS® would be required to comply with the more stringent federal rules. Q 5. What are the exemptions to the FCC do- not- call rules? A Certain types of calls are exempt from the FCC’s do-not-call requirements, including calls that are made by or made based on: • Written permission (see Question 6). • Established business relationships (see Question 7). • Personal relationships (see Question 8). • Tax-exempt nonprofit organizations. (See 47 C.F.R. §§ 64.1200(c)(2)(ii) and 64.1200(f)(9).) This legal memorandum does not cover the treatment of tax-exempt nonprofit and political organizations under the do-not-call laws. Q 6. What is the written permission exception to the do-not-call requirements? A The FCC’s do-not-call requirements are inapplicable if a telephone call is placed to someone who has given prior express invitation or permission to call. This permission must be evidenced by a signed, written agreement to be
  • 4. contacted by this caller at a specified telephone number. (47 C.F.R. § 64.1200(c)(2)(ii).) Q 7. What is the established business relationship exception to the do-not-call requirements? A The FCC defines an “established business relationship” as “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of” one of the following: • The consumer’s purchase or business transaction with the entity within the last 18 months; or • The consumer’s inquiry or application regarding the entity’s products or services within the last three months. (47 C.F.R. § 64.1200(f)(3).) An established business relationship with a particular company does not extend to affiliated companies unless the consumer would reasonably expect them to be included given the nature and type of goods or services offered by the affiliate and the identity of the affiliate (47 C.F.R. § 64.1200(f)(3)(ii)). There is no established business relationship if either party previously terminated the relationship (47 C.F.R. § 64.1200(f)(3)). Furthermore, a caller must honor the consumer’s request to be placed on the caller’s company-specific do-not-call list (discussed below), even if the parties continue to do business together (47 C.F.R. § 64.1200(f)(3)(i)). Q 8. What is the personal relationship exception to the do-not-call requirements? A A “personal relationship” means any family member, friend, or acquaintance of the telemarketer making the call (47 C.F.R. § 64.1200(f)(11)). Q 9. What if my telephone solicitations don’t fall within any of these exemptions? A REALTORS® may be able to alter some of their current marketing practices to fall within one of the do-not-call exemptions. Let’s say, for example, you send out a mass mailer offering a free Comparative Market Analysis (CMA). Given the do-not-call rules, you may want to consider asking homeowners to send you a response card providing their telephone numbers and a signed written consent for you to call them. If they respond accordingly, your subsequent calls to them will fall under the written permission exemption with no expiration date. Alternatively, if you don’t get a signed written consent, you may want to date stamp any response cards you receive to ensure that you call within three months to fall under the established business exemption for inquiries. As another example, you may want to consider using your Open House registry to inform those who sign in that, by providing you with their telephone numbers and signatures, they are giving you permission to call them. There may be other aspects of your real estate practice that may be changed to fall within one of the do-not-call exemptions.
  • 5. If, however, your practice cannot be altered to fall within an exemption, you may be required to comply with the do-not-call requirements. Although cross-checking your call list with the do-not-call registry may be cumbersome and time-consuming, your advertising efforts may ultimately be more effective if you no longer call people who have chosen to go on the do-not-call registry. Whether your call list gets shorter or not, the important thing is to make every call count. Q 10. What about my unlicensed assistant who does telephone prospecting for me? A An unlicensed assistant who makes telephone solicitations on a REALTOR®’s behalf is subject to the same do-not-call rules (47 C.F.R. § 64.1200(c)(2)). Furthermore, under California Department of Real Estate guidelines, an unlicensed assistant may canvass for general interest in using the services of a real estate broker, but cannot attempt to induce a prospective client to use the services of the broker for a specific property, transaction, or product. For further details, please refer to C.A.R.’s legal memorandum, Unlicensed Assistants. II B. CONSUMER INFORMATION Q 11. How does a consumer get on the national do-not-call registry? A Consumers can register online at www.donotcall.gov or by calling 1.888.382.1222 (TTY: 1.866.290.4236) from the phone number to be registered. Consumers may register both their residential telephone numbers and cellular phone numbers (47 C.F.R. § 64.1200(e)). There is no cost for registration. Telemarketers generally have three months to remove newly registered telephone numbers from their call lists. The do-not-call database will be administered by the FTC. Q 12. How long does a phone number stay on the do- not- call registry? A A consumer’s phone number will remain on the do-not-call registry for five years (unless the consumer decides to take it off the registry). A consumer may re-register every five years. (47 C.F.R. § 64.1200(c)(2).) II C. REQUIREMENTS Q 13. If I make telephone solicitations, what do I have to do to comply with the do- not- call requirements? A No person or company shall initiate any telephone solicitation to residential consumers whose telephone numbers are on the do-not-call registry (47 C.F.R. § 64.1200(c)(2)). Calls that are made based on or by written permission, established business relationships, or personal relationships are excluded from the definition of “telephone solicitation” (47 C.F.R. § 64.1200(f)(9)). For covered calls, you must access the do-not-call database at https://telemarketing.donotcall.gov. You must “scrub” your call list at least once every three months. “Scrubbing” means cross-checking the do-not-call registry with your own call list, and dropping from your call list the telephone numbers of people who have registered. The database only provides the telephone numbers of registrants, sorted by area codes. On subsequent visits to the FTC’s website, you will be able to download either a complete updated list of telephone numbers from the area codes you have selected or a more limited list showing additions and deletions from when you
  • 6. last downloaded. For more information, go to https://telemarketing.donotcall.gov/ FAQ/FAQBusiness.aspx. Q 14. What is the cost of accessing the do-not-call registry? A There is no charge for the first five area codes of data accessed by any person. For more than five area codes, the annual fee charged to any person accessing the data is $25 per area code, up to a maximum of $7,375 for the entire registry. (16 C.F.R. § 310.8(c).) Payment for accessing the registry is unnecessary for people initiating calls solely under the written permission or established business relationship exceptions of the FTC rules (16 C.F.R. § 310.8(a)). A person accessing the registry may not participate in any arrangement to share the cost of accessing the registry (16 C.F.R. § 310.8(c)). Separate divisions, subsidiaries, or affiliates of an entity must pay a separate access fee if: (1) the entity is separately incorporated or, for a non-corporate entity, is a similarly distinct legal entity; and (2) the entity has or markets under a different name. (68 Fed. Reg. 45134 at 45139 (2003).) Q 15. What if I sign up, but a few months later I want to access more area codes? A When you access the do-not-call registry, you will be given a unique account number allowing you to continue accessing the area codes you have selected for a period of 12 months (e.g., if you subscribe on September 15, 2003, the annual period will be from September 1, 2003 to August 31, 2004). During that annual period, if you want to access more area codes than what you originally selected, each additional area code (after the first five) will cost $25 during the first six months of the annual period, and $15 during the second six months of the annual period. Payment of the additional fee will give you access to the additional area codes for the remainder of the annual period only. (16 C.F.R. § 310.8(d).) Q 16. What will happen if I call someone on the do-not-call registry by mistake? A No person or company will be held liable for violating the do-not-call requirements if you can demonstrate all of the following: • Error: You called someone on the do-not-call registry as a result of error. • Written policy: You have a written procedure for complying with the do-not-call requirements. • Recording: You have maintained and recorded a list of telephone numbers that cannot be contacted. • Accessing: You use a process to prevent telephone solicitations to any telephone number on your do-not-call list, which employs a version of the national do-not-call registry obtained from the administrator of the registry every three months, and you maintain records documenting this process. • Purchasing: You use a process to ensure that you do not use the do-not-call database for any purpose other than compliance with state and federal laws. You also do not share the cost of accessing the do-not-call database with other companies. • Training: You have trained your personnel to comply with the do-not-call requirements.
  • 7. (47 C.F.R. § 64.1200(c)(2)(i).) Q 17. What are the rules for telephone solicitations to consumers who are not on the do- not- call registry? A Under the FCC regulations adopted on July 25, 2003, the general telemarketing rules are as follows: • Do not call before the hour of 8 a.m. or after 9 p.m. (local time at the called party’s location). (47 C.F.R. § 64.1200(c)(1).) • Do not disconnect an unanswered call before at least 15 seconds or four rings. (47 C.F.R. § 64.1200(a)(5).) • When you call, you must give: (1) your name; (2) your company’s name; and (3) your telephone number or address at which you may be contacted. (47 C.F.R. § 64.1200(d)(4).) • You must maintain “company-specific” do-not-call procedures. (47 C.F.R. § 64.1200(d).) (See Question 18.) • Do not block caller ID (effective January 29, 2004). (47 C.F.R. § 64.1601(e)(ii).) • For caller ID, you must transmit your name and a telephone number for people to use during regular business hours to make do-not-call requests (effective January 29, 2004). (47 C.F.R. § 64.1601(e)(i).) Although the first requirement regarding time-of-day does not technically apply to callers with written permission or established business relationships, it is still good practice not to call clients very early in the morning or very late at night. The remaining requirements listed above are applicable as long as you engage in telemarketing, even if you have written permission or an established business relationship. “Telemarketing” is defined as “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” (47 C.F.R. § 64.1200(f)(7)). See Question 19 for additional requirements for interstate calls. Q 18. What are company- specific do-not-call procedures? A As mentioned above, no person or company shall initiate any call for telemarketing purposes, as defined above, to a residential telephone subscriber absent established procedures for maintaining a list of persons who ask not to be called. These procedures must, at a minimum, include the following: • Written Policy: You must have a written policy, available on demand, for maintaining a company-specific do-not-call list. • Identification: When you call someone who is not on the do-not-call registry, you must provide the called party with: (1) your individual name; (2) your company’s name; and (3) your telephone number or address at which you may be contacted. The telephone number provided cannot be a 900 number or any other number for which charges exceed local or long distance transmission charges. • Recording: For any residential telephone subscriber who requests not to be called, that person’s name, if provided, and telephone number must be placed on a company-specific do-not-call list at the time the request is made. You must honor this do-not-call request within a reasonable time, not to exceed 30 days. • Maintenance: You must maintain a record of the do-not-call requests, and honor it for five years.
  • 8. • Training: Your personnel engaged in any aspect of telemarketing must be informed and trained in the existence and use of the do-not-call list. • Affiliates: Unless someone requests otherwise, a consumer’s do-not-call request applies to the particular business entity making the call, and not affiliated entities unless the consumer reasonably would expect them to be included given the identification of the caller and the product being advertised. (47 C.F.R. § 64.1200(d).) Based on the above language, it would be prudent in most situations for the do-not-call list to be maintained by a real estate company as a whole, not just the individual salesperson working for that company, even if the salesperson engaging in telemarketing activities is an independent contractor. Q 19. What about interstate calls? A REALTORS® engaged in interstate telemarketing must not only comply with the FCC rules outlined above, but also the FTC rules discussed below. However, even if a REALTOR® makes interstate calls, he or she is likely to fall under a limited exemption to the FTC rules for “[t]elephone calls in which the sale of goods or services . . . is not completed, and payment or authorization of payment is not required, until after a face-to-face [sales] presentation” by the REALTOR® (16 C.F.R. § 310.6(b)(3)). Under this limited face-to-face exemption, you are exempt from the bulk of the FTC rules, but you are nevertheless prohibited from doing the following when engaged in interstate telemarketing: • Using threats, intimidation, or profane or obscene language (16 C.F.R. § 310.4(a) (1)). • Calling to annoy, abuse, or harass (16 C.F.R. § 310.4(b)(1)(i)). • Interfering with someone’s right to place his or her name on a do-not-call list (16 C.F.R. § 310.4(b)(1)(ii)). • Blocking caller ID (effective January 29, 2004) (16 C.F.R. § 310.4(a)(7)). • The remaining applicable FTC requirements are substantially similar to the FCC rules outlined above (see 16 C.F.R. §§ 310.4(b) and (c)). For purposes of the FTC rules, “telemarketing” is defined as “a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call” (16 C.F.R. 310.2(cc)). For REALTORS® who engage in interstate telemarketing, but do not conduct face-to-face sales presentations, the FTC requirements are fully set forth at Title 16 of the Code of Federal Regulations Sections 310.1-310.9. Q 20. What about automated telephone equipment, such as autodialers or prerecorded messages? A An autodialer (or “automatic telephone dialing system") refers to equipment that can generate and dial telephone numbers randomly or sequentially (47 C.F.R. § 64.1200(f)(1)). Autodialers are generally used for placing artificial (computerized) or prerecorded messages. There are various laws governing the use of autodialers and artificial or prerecorded messages, as fully set forth at Title 47 of the United States Code Section 227 and Title 47 of the Code of
  • 9. Federal Regulation Section 64.1200 (federal law), and at California Public Utilities Code Sections 2871-2875.5 and California Civil Code Section 1770(a) (22)(A) (state law). For example, under California law, using autodialers to place calls is generally prohibited before 9 a.m. and after 9 p.m. (Cal. Pub. Util. Code § 2872(c)). Furthermore, under the FCC rules, telemarketers using predictive dialers must ensure that they do not abandon more than 3% of all calls made over a 30-day period. A call is considered “abandoned” if it is not connected to a live sales representative within two seconds of the called person’s completed greeting. (47 C.F.R. § 64.1200(a)(6) (see also 16 C.F.R. § 310.4(b)(1)(iv).) This rule should reduce the instances when a consumer answers the phone, only to hear dead air or a hang-up. II D. ENFORCEMENT Q 21. What happens if someone violates these laws? A Violations may be enforced by the issuance of citations or fines by the FTC, the FCC, or state law enforcement agencies (see Question 22), and by court order in a civil lawsuit brought by the consumer whose rights have been violated (see Question 23). Q 22. What does governmental enforcement entail? A Failure for a REALTOR® to comply with the FCC rules could result in, among other things, a fine up to $11,000 for each violation or each day of a continuing violation, except that the amount assessed for any continuing violation shall not exceed a total of $87,500 for any single act or failure to act (47 C.F.R. § 1.80(b) (3)). For the FTC rules, the civil penalty is $11,000 for each violation (15 U.S.C. 45 (m)(1) and 16 C.F.R. § 1.98). For do-not-call violations, a consumer may file a complaint with the FCC or FTC . A complaint to the FCC must include the following: • Consumer’s name, address, and daytime phone number. • Telephone number involved in the complaint. • As much specific information about the complaint as possible, including the identity of the telemarketer or company that called. A complaint to the FTC must provide the following information: • Name or telephone number of the company that called. • Date of call. • Consumer’s registered telephone number. • Optional: Consumer’s name and address. The FCC and FTC may issue citations or fines, but they will not resolve individual consumer problems. The FTC may enter complaints into Consumer Sentinel, an online database accessible by civil and criminal law enforcement agencies, including the California Attorney General. Q 23. What is a consumer’s private right of action? A Aside from governmental enforcement (discussed above), a consumer may file a civil lawsuit in state court for a violation of the FCC or FTC rules. A
  • 10. consumer may seek to recover actual monetary loss or $500 in damages for each violation, whichever is greater, and an injunction prohibiting further violations. The court may also award treble damages if the violator willfully or knowingly violated these rules. (47 U.S.C. §§ 227(b)(3) and (c)(5).) For certain violations, such as wrongfully using an autodialer or sending an unsolicited fax (as discussed below), a consumer’s cause of action arises as soon as the caller or sender violates the rules (47 U.S.C. § 227(b)(3)). For other violations, including violations of telephone solicitation guidelines, a consumer’s cause of action does not arise until he or she has received more than one telephone call within any 12-month period by or on behalf of the same company (47 U.S.C. § 227(c)(5)). III. FAX Q 24. What is this new law regarding faxing advertisements? A Along with the do-not-call rules adopted on July 25, 2003, the FCC also established new rules generally prohibiting the faxing of advertising materials absent the fax recipient’s prior written permission. This written permission requirement could significantly impact the way REALTORS® conduct business. Fortunately, however, on August 18, 2003, the FCC granted a stay delaying implementation of some of these new rules until January 1, 2005, as requested by C.A.R. and various other organizations. C.A.R. has also filed a Petition for Reconsideration requesting the FCC to, among other things, eliminate the written permission requirement. Click here to review C.A.R.’s Petition for Reconsideration currently pending before the FCC. Q 25. Are REALTORS® exempt from the do-not-fax rules? A No. There is no general exemption for real estate professionals. Q 26. How, in a nutshell, do these do- not- fax rules affect me as a REALTOR®? A You are generally prohibited from faxing commercial advertisements, such as flyers advertising the availability of your real estate services or property data sheets offering a real property for sale. Your advertisements may be mailed, downloaded from your website, or hand-delivered, but they generally cannot be faxed. However, from now until December 31, 2004, you may fax advertisements if: (1) the fax recipient has given you permission (verbal or written) to send the fax; or (2) you and the fax recipient have an established business relationship. To be prudent, consider an “established business relationship” as a purchase or transaction within the last 18 months or an inquiry within the last three months (see discussion below). Starting January 1, 2005, you will not be allowed to fax advertising materials absent prior written permission from the fax recipient. Q 27. What is the scope of these do-not-fax rules? A No person or company may use “a telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine” (47 C.F.R. § 64.1200(a)(3)). However, the FCC’s definition of “unsolicited advertisement” is much broader in scope than what people generally consider as “junk faxes.” More specifically, the FCC defines an “unsolicited advertisement” as “any material advertising the commercial availability or quality
  • 11. of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission” (47 C.F.R. § 64.1200(f)(10)). These rules have actually been in effect since 1992. They have, however, taken on new meaning because of recent FCC changes in its determination of what constitutes “prior express permission.” Before the recent revisions, the FCC did not explicitly define “prior express permission.” Furthermore, the FCC considered an “established business relationship” (discussed below) as sufficient “prior express permission” for businesses to send faxes to their own customers. Thus, under the preexisting rules, a REALTOR® can send faxes to people who have given verbal permission, and those with whom the REALTOR® has an established business relationship. The FCC will generally continue with this approach, including the recognition of an “established business relationship” exception, until December 31, 2004. However, effective January 1, 2005, all “prior express permissions” must be in the form of a signed, written agreement to receive a fax at a specified fax number (47 C.F.R. § 64.1200(a)(3)(i)). In other words, unless the rules change again, starting on January 1, 2005, no one can fax advertising materials absent prior written permission, even if the fax recipient has verbally requested that fax or if the sender and recipient have an established business relationship. It apparently makes no difference whether the fax recipient is an existing client, a real estate agent, a prospective buyer, or anyone else. Furthermore, unlike the do-not-call rules that pertain only to calls made to someone’s residence, the do-not-fax rules apply to faxes sent to both residences and businesses. Here’s one point of clarification. Before coming into effect, section 64.1200(a)(3) (i) must be approved by the federal Office of Management and Budget (OMB) under the Paperwork Reduction Act. (See 68 Fed. Reg. 56764 (2003) (stating that the “OMB is continuing its review of the information collections associated with the fax advertising rules.”) Q 28. What is an “established business relationship” under current do-not-fax rules? A The FCC defines an “established business relationship” as: a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of the subscriber’s purchase or transaction with the entity within the eighteen (18) months immediately preceding the date of the telephone call or on the basis of the subscriber’s inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been previously terminated by either party (47 C.F.R. § 64.1200(f)(3)). The above definition for “established business relationship” is arguably inapplicable to the do-not-fax rules (e.g., incongruous references to “residential
  • 12. subscriber” and “telephone call”). However, to be prudent, REALTORS® should nevertheless refrain from faxing under the “established business relationship” exception unless the client has made a purchase or transaction with the REALTOR® within the last 18 months or an inquiry or application with the last three months. This established business relationship exception is scheduled to be phased out on January 1, 2005. Q 29. What exactly has been delayed until January 1, 2005? A On August 18, 2003, the FCC released an order granting a stay to delay until January 1, 2005 the effective date of: (1) the elimination of the “established business relationship” exception; and (2) the requirement of written permission before faxing “unsolicited advertisements.” The purpose of the stay is to give businesses additional time to obtain the required written permission from their customers, and to give the FCC an opportunity to consider any petitions for reconsideration, such as that submitted by C.A.R. (Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, FCC 03-208, Order on Reconsideration (rel. August 18, 2003).) Q 30. Are there any other laws involving faxes? A Yes. There are other rules involving faxes currently in effect. For instance, all faxes, whether advertisements or not, must provide identification information in the margin at the top or bottom of the first page of a transmission or on each transmitted page. The required identification information for a fax is as follows: • Date and time it is sent; • Name of person or company sending the message; and • Telephone number of the sending machine or of such person or company. (47 C.F.R. § 68.318(d).) The FCC also prohibits the use of any technology to dial any telephone number for the purpose of determining whether that line is a fax or voice line (47 C.F.R. § 64.1200(a)(7)). There are also rules involving facsimile broadcasters as discussed below. Q 31. What is a fax broadcaster? A A fax broadcaster is a person or entity that, for a fee, transmits fax messages on behalf of others (47 C.F.R. § 64.1200(f)(4)). Q 32. What are the do- not- fax rules pertaining to fax broadcasters? A A fax broadcaster is liable for violations of the do-not-fax rules if it demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such fax transmissions (47 C.F.R. §§ 64.1200(a)(3)(ii)). Furthermore, if a fax broadcaster demonstrates a high degree of involvement in a sender’s fax messages, such as supplying the numbers to which a message is sent, that broadcaster’s name (as registered with the State Corporation Commission or comparable regulatory authority) must be identified on the fax, along with the sender’s name. Fax machines manufactured on or after December 20, 1992 must clearly mark such identifying information on each transmitted page. (47 C.F.R. § 68.318(d).) Q 33. What happens if someone violates these fax rules? A As with the do-not-call rules discussed above, violations of the fax rules may be enforced by the issuance of citations or fines by the FCC or state law
  • 13. enforcement agencies, and by court order in a civil lawsuit brought by the consumer whose rights have been violated. For government enforcement, a fine can be as much as $11,000 for each violation or each day of a continuing violation, except that the amount assessed for any continuing violation shall not exceed $87,500 for any single act or failure to act (47 C.F.R. § 1.80(b)). For a private right of action, a consumer may seek to recover actual damages or $500 for each violation, whichever is greater, and an injunction prohibiting further violations. The court may also award treble damages if the violator willfully or knowingly violated these rules. (47 U.S.C. §§ 227(b)(3) and (c)(5).) IV. E-MAIL Q 34. What is the law regarding e- mails? A On September 24, 2003, California enacted sweeping antispam legislation (SB 186) generally prohibiting unsolicited commercial e-mail advertisements. Slated to go into effect on January 1, 2004, this new law generally prohibits the transmission of unsolicited commercial e-mail advertisements in California. Q 35. What falls within the scope of the new anti-spam law? A Under the general rule, no person or company may initiate or advertise in an “unsolicited commercial e-mail advertisement” from (or sent from) California, or to (or sent to) a California e-mail address (Cal. Bus. & Prof. Code § 17529.2). A “commercial e-mail advertisement” is broadly defined as “any electronic mail message initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, or other disposition of any property, goods, services, or extension of credit” (Cal. Bus. & Prof. Code § 17529.1(c)). To “initiate” an unsolicited commercial e-mail advertisement includes transmitting, causing to transmit, and assisting in the transmission by providing e-mail addresses where the advertisement may be sent, excluding routine transmissions of ads through networks or service providers (Cal. Bus. & Prof. Code § 17529.1(i)). Q 36. Are REALTORS® exempt from the antispam law? A No. There is no general exemption for real estate professionals. Q 37. What, then, are the exemptions from the antispam law? A A commercial e-mail advertisement is exempt (i.e., not “unsolicited”) if: (1) the recipient has provided direct consent to receive advertisements from the advertiser; or (2) the recipient has a preexisting or current business relationship with the advertiser. (Cal. Bus. & Prof. Code § 17529.1(o).) Q 38. What is the “direct consent” exception to the antispam law? A “Direct consent means that the recipient has expressly consented to receive e-mail advertisements from the advertiser, either in response to a clear and conspicuous request for the consent or at the recipient’s own initiative” (Cal. Bus. & Prof. Code § 17529.1(d)). Although this definition does not specifically require the consent to be in writing, it is advisable for a REALTOR® to obtain written consent as readily available proof if needed. Q 39. What is the “pre-existing or current business relationship” exception to the antispam law? A A “pre-existing or current business relationship” means “that the recipient has made an inquiry and has provided his or her e-mail address, or has made an application, purchase, or transaction, with or without consideration, regarding
  • 14. products or services offered by the advertiser” (Cal. Bus. & Prof. Code § 17529.1(l)). Commercial e-mail advertisements sent under the business relationship exception must provide an “unsubscribe” feature as further discussed below. Q 40. What is the “unsubscribe” requirement for commercial advertisements e-mailed under the business relationship exception? A A commercial e-mail advertisement sent under the business relationship exception must provide the recipient with the ability to “opt-out” from receiving further ads by calling a toll-free telephone number or by sending an “unsubscribe” e-mail to the advertiser offering the products or services in the commercial e-mail advertisement. The “opt-out” requirement does not apply to commercial e-mail advertisements sent by the service provider of a recipient’s free e-mail service. (Cal. Bus. & Prof. Code § 17529.1(l).) Q 41. What are the other provisions of this anti-spam law? A The anti-spam law prohibits the following conduct involving unsolicited commercial e-mail advertisements from (or sent from) California or to (or sent to) a California e-mail address: • Collecting e-mail addresses posted on the Internet for purposes of using them to initiate or advertise in an unsolicited commercial e-mail advertisement. (Cal. Bus. & Prof. Code § 17529.4(a).) • Using an e-mail address obtained from automated means (based on a combination of names, letters, or numbers) to initiate or advertise in an unsolicited commercial e-mail advertisement. (Cal. Bus. & Prof. Code § 17529.4(b).) • Using scripts or other automated means to register for multiple e-mail accounts to initiate or advertise in an unsolicited commercial e-mail advertisement. (Cal. Bus. & Prof. Code § 17529.4(c).) The anti-spam rules also prohibit the following conduct involving commercial e-mail advertisements that are sent from California or sent to California e-mail addresses: • Sending a commercial e-mail advertisement that contains or is accompanied by a third party’s domain name without that third party’s permission (Cal. Bus. & Prof. Code § 17529.5(a)). A “domain name” is “any alphanumeric designation that is registered with or assigned by any domain name registrar as part of an electronic address on the Internet.” (Cal. Bus. & Prof. Code § 17529.1(e).) • Sending a commercial e-mail advertisement that contains or is accompanied by falsified, misrepresented, obscured, or forged header information. (Cal. Bus. & Prof. Code § 17529.5(b).) • Sending a commercial e-mail advertisement that has a subject line that a person knows would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message. (Cal. Bus. & Prof. Code § 17529.5(c).) Other provisions involving e-mail service providers are fully set forth at California Business and Professions Code Section 17538.45.
  • 15. Q 42. What is the penalty for violating the anti-spam law? A A recipient of an unsolicited commercial e-mail advertisement transmitted in violation of these rules, the e-mail service provider, or the Attorney General may sue to recover all of the following: • Actual damages; • Liquidated damages of $1,000 for each advertisement transmitted, up to a total of $1 million per incident; • Attorney’s fees and costs; and • Any other remedies authorized by law. If, however, a violator established and implemented, with due care, practices and procedures reasonably designed to effectively prevent unsolicited commercial e-mail advertisements in violation of the antispam law, the court shall reduce the liquidated damages to a maximum of $100 for each unsolicited commercial e-mail advertisement, up to a maximum of $100,000 per incident. (Cal. Bus. & Prof. Code § 17529.8.) Q 43. Are there any current rules concerning e-mails? A Yes, but they are scheduled to be repealed effective January 1, 2004. However, under the current law effective until December 31, 2003, no person or company shall e-mail or cause to be e-mailed any unsolicited advertising material for the sale, lease, gift offer, or other disposition of any real estate, goods, or services, or extension of credit, unless that person or company does the following: • Insert “ADV:” as the first four characters of the subject line of the e-mail message. • Establish a toll-free telephone number or valid sender-operated return e-mail address for recipients to notify the sender not to send any further unsolicited e-mails. • Inform recipients that they can use the toll-free number or return e-mail address to notify the sender not to send any further unsolicited e-mails. This statement must be the first text in the body of the message and it must be the same size as the majority of the text of the message. • Honor any notification by a recipient not to send any further unsolicited e-mails. (Cal. Bus. & Prof. Code § 17538.4. ) These rules apply only to persons or companies conducting business in California who use service providers or equipment located in California to send unsolicited e-mail documents to California residents (Cal. Bus. & Prof. Code § 17538.4(a) and (d)). These rules do not apply if the sender and recipient have an existing business or personal relationship or if the recipient requested or expressly consented to the e-mail (Cal. Bus. & Prof. Code § 17538.4(e)). Q 44. What about text messaging? A Under California law, no person or company shall transmit or cause to be transmitted a text message advertisement to a cellular telephone or pager (Cal. Bus. & Prof. Code § 17538.41(a)). This rule applies to persons or companies conducting business in California transmitting to a telephone number assigned to
  • 16. a California resident (Cal. Bus. & Prof. Code § 17538.41(a) and (b)). If there is an existing relationship, then this rule does not apply to the business transmitting the text message, but only if the subscriber is offered an option not to receive text messages from that business (Cal. Bus. & Prof. Code § 17538.41(c)). This rule does not apply to affiliates of a business with an existing relationship with the subscriber, but only if the subscriber has given consent to receive text messages from affiliates (Cal. Bus. & Prof. Code § 17538.41(d)). V. ADDITIONAL INFORMATION Q 45. Where can I find the various laws? A Federal law is found at 47 U.S.C § 227; 15 U.S.C. §§ 6101-6108; 16 C.F.R. §§ 310.1-310.9; 47 C.F.R. § 64.1200; and 47 C.F.R. § 68.318. California law can be found at California Business and Professions Code §§ 17511-17511.13, 17529-17529.9, 17538.4, 17538.41, and 17590-95; California Public Utilities Code §§ 2871-2875.5; and California Civil Code § 1770(a)(22). Q 46. Where can I get more information? A For more information about the FCC’s do-not-call rules, go to its website at www.fcc.gov/cgb/donotcall or call 1.888.CALL.FCC (1.888.225.5322) (TTY: 1.888.TELL.FCC). For the FTC rules, go to its website at www.ftc.gov/donotcall or call 1.877.FTC.HELP (1.877.382.4357) (TTY: 1.866.653.4261). For California laws, including the new antispam legislation, go to www.leginfo.ca.gov. For a complete listing of products and services, including all legal memoranda, available from C.A.R. visit C.A.R. Online. Readers who require specific advice should review their facts with an attorney. C.A.R. members may speak with an attorney, free of charge, by contacting C.A.R.’s Member Legal Hotline at 213.739.8282, Monday through Friday, from 9:00 A.M. until 6:00 P.M., or through our website at C.A.R. Legal Hotline. C.A.R. members who are broker-owners, office managers, or Designated REALTORS® can receive priority access to the Member Legal Hotline by calling 213.739.8350 or through our website at C.A.R. Legal Hotline. General correspondence can be addressed to legal_hotline@car.org or: California Association of REALTORS® Member Legal Services 525 South Virgil Avenue Los Angeles, California 90020