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  1. 1. Teton Board of REALTORS® Jackson, Wyoming March 24, 2005 REALTORS® … The Do-Not-Call Law Means You Telemarketing e-Mailing Faxing
  2. 2. Part One: Do Not Call
  3. 3. Telemarketing Definitions <ul><li>Seller: any person who offers to provide goods or services to the customer in exchange for consideration. </li></ul><ul><li>Telemarketing: a plan or program or campaign which is conducted to induce the purchase of goods or services . . . </li></ul>
  4. 4. Legislative Background: Telemarketing Laws <ul><li>Telephone Consumer Protection Act of 1991 (TCPA) and accompanying FCC regulations. </li></ul><ul><li>Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 and accompanying FTC regulations. </li></ul><ul><li>Do-Not-Call Implementation Act of 2004 (effective October 16, 2003) Preempting State Law </li></ul>
  5. 5. Previous Restrictions Pursuant to Telemarketing Laws & Regulations <ul><li>Calls may only be made between the hours of 8:00 a.m. and 9:00 p.m. </li></ul><ul><li>Callers must disclose all material information about the goods or services they are offering and the terms of the sale. </li></ul><ul><li>Companies are required to maintain their own company-specific “do-not-call” list and honor consumer requests to be placed on the list. </li></ul><ul><li>Companies are required to have written policies on maintaining their do-not-call lists. </li></ul>
  6. 6. <ul><li>Unsolicited autodialed or prerecorded calls are prohibited to any cell phone even if there is an established business relationship. </li></ul><ul><li>Updated to include other wireless devices. </li></ul>Existing Cell Phone Regulations …
  7. 7. Restrictions Pursuant to the 2003 Do-Not-Call Implementation Act <ul><li>Congress gave the FTC a mandate to create a National Do-Not-Call Registry for residential numbers. </li></ul><ul><li>Telemarketers and sellers are prohibited from calling a phone number listed on the Registry (exceptions exist). </li></ul><ul><li>Telemarketers and sellers are required to “scrub” their calling lists against the Registry at least every three months. Interstate calls must be scrubbed once a month. </li></ul>
  8. 8. Existing Business Relationship Exemption … <ul><li>A business relationship based upon a transaction between the company and the consumer within the previous 18 months or within 3 months of an inquiry, application or request by the consumer. </li></ul><ul><li>Prior written permission to call. </li></ul>
  9. 9. Also Exempt … <ul><li>Charities </li></ul><ul><li>Tax-exempt non-profit organizations (c)(3) not (C)(6) </li></ul><ul><li>Political campaigns </li></ul><ul><li>Surveys </li></ul><ul><li>Polls </li></ul>Note: These regulations only apply to residential phone numbers.
  10. 10. Compliance Requirements …
  11. 11. Telemarketers Must Register … <ul><li> </li></ul><ul><li>Provide name, address, Federal ID (“organization profile”) </li></ul><ul><li>Designate a “Contact Person” </li></ul><ul><li>Certify that your company is in compliance with all telemarketing laws. </li></ul>
  12. 12. Database Access … <ul><li>You will be given a “Subscription Account Number” (SAN) and a password. </li></ul><ul><li>You may download the full lists of five area codes and purchase software to scrub the FTC lists against the numbers you wish to call. </li></ul><ul><li>(or) </li></ul><ul><li>You may check up to 100 numbers (per log-in) interactively in groups of ten numbers at a time. </li></ul>
  13. 13. Cost … <ul><li>First 5 area codes are free additional codes $40 each. </li></ul><ul><li>Instant access to lists when paid by a credit card </li></ul><ul><li>Good for one year </li></ul><ul><li>Must renew subscription </li></ul><ul><li>1-888-382-1222 (TTY 1-866-290-4236). </li></ul>
  14. 14. Safe Harbor Provision: “calls made in error” <ul><li>You will not be held liable if you have in place and practice the following seven point office policy: </li></ul>
  15. 15. Office Policy … <ul><li>Register with the FTC and create an “Organization Profile” on line. </li></ul><ul><li>Adopt written office procedures for making sales calls. </li></ul><ul><li>Train your office and sales staff. </li></ul><ul><li>Require your agents to “scrub” any numbers they have against a current FTC list before making sales calls. </li></ul><ul><li>Check agent compliance periodically. </li></ul><ul><li>Maintain your own agency do-not-call list. </li></ul><ul><li>Be able to show proof of a registry update within last three months (one month if making interstate calls). </li></ul>
  16. 16. February 18 th FCC Order … <ul><li>Prohibits calls to FSBOs whose numbers are on the Do-Not-Call list unless the real estate professional is representing a potential buyer and the purpose of the call is to discuss the potential sale of the property to the represented buyer. </li></ul><ul><li>Real estate professionals are not permitted to call expired listings (with whom they do NOT have an existing business relationship) or FSBOs for the purpose of offering services to homeowners. </li></ul>
  17. 17. Creating Consumer Expectations … <ul><li>If you register consumers at open houses or use an automated system that provides information on homes and captures the number of the caller (an inquiry) be sure to include in your message that one of your agents will follow up with a call. </li></ul>
  18. 18. As of: February 2005 … <ul><li>85,000,000 numbers have been registered (roughly 85% of US adults) </li></ul><ul><li>428,000 reported violations involving 130,000 companies </li></ul><ul><li>Since the regulations were enacted residential calls have been reduced from an average of 30 per month to 6. </li></ul>
  19. 19. Upheld … US Supreme Court October 4, 2004 <ul><li>A telemarketer’s right to free speech is not violated by the government’s do-not-call list. </li></ul><ul><li>The do-not-call registry “directly advances government’s important interest in safeguarding personal privacy”. </li></ul>
  20. 20. FCC February 18 th Order: <ul><li>In issuing this Order, the FCC made a strong statement indicating its unwillingness to consider further exemptions from the Do-Not-Call rules. </li></ul>
  21. 21. Consumer Complaints <ul><li> </li></ul><ul><li>by phone: 1-888-382-1222. </li></ul><ul><li>Consumers must report the date of the call and either the name or the phone number of the company that called. </li></ul>
  22. 22. Penalty … <ul><li>Telemarketers who disregard the registry may be fined up to $11,000 per call. </li></ul>
  23. 23. A Recent Example … <ul><li>March 2005 … Phoenix based Dynasty Mortgage was cited by the FCC for 70 calls to 50 homes and fined the maximum of $11,000 per violation ($770,000) </li></ul><ul><li>Dynasty had been warned in December of 2003 </li></ul>
  24. 24. Part Two: CAN SPAM
  25. 25. CAN-SPAM Legislation <ul><li>Effective date January 1, 2004. </li></ul><ul><li>CAN SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing Act) </li></ul><ul><li>Sought by retailers, marketers and ISPs seeking a single set of rules to preempt 35 state spam laws. </li></ul>
  26. 26. Unlike Do-Not-Call <ul><li>CAN SPAM does not ban any solicited or unsolicited e-mails. (Congress authorized but the FTC did not create a do-not-spam registry.) </li></ul><ul><li>CAN SPAM pre-empts state spam laws except portions of state law that prohibit falsity or deception in any e-mail or attachment. </li></ul><ul><li>CAN SPAM identifies practices to be followed by those who send commercial e-mails originating in the US. </li></ul><ul><li>CAN SPAM bans certain fraudulent or deceptive practices and criminalizes techniques used by spammers to avoid detection. </li></ul>
  27. 27. Key Definition: “Commercial Electronic Mail Message” <ul><li>“ Any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service” </li></ul>
  28. 28. Exempt … “transactional or relationship e-mails” whose primary purpose is to: <ul><li>Facilitate, complete or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender. </li></ul><ul><li>Provide warranty information, product recall information or safety or security information for a product or service purchased or used by the recipient. </li></ul><ul><li>Provide information of a change in the terms, features, status, …, membership, …ongoing purchase or use of products or services offered by the sender and used by the recipient. </li></ul><ul><li>Provide information directly related to an employment relationship or benefit plan in which the recipient is enrolled. </li></ul><ul><li>Deliver goods or services that the recipient is entitled to receive under the terms of a transaction that the recipient has previously entered into with the sender. </li></ul>
  29. 29. Rules on “primary purpose” of a commercial e-mail: <ul><li>1) If the e-mail’s content solely advertises or promotes a product or service, it would be deemed commercial </li></ul><ul><li>2) If the e-mail contains both commercial and “transactional or relationship” content, the e-mail would be deemed commercial if either: </li></ul><ul><li>a) the recipient deems from the subject line that the e-mail advertises or promotes a product or service </li></ul><ul><li>b) the transactional or relationship content is not located at or near the beginning of the e-mail. </li></ul>
  30. 30. <ul><li>3) If the e-mail contains both commercial and non-commercial content, the e-mail would be deemed commercial if: </li></ul><ul><li>a) the recipient concludes from the subject line that the e-mail is commercial. </li></ul><ul><li>b) the recipient concludes from the text that the main purpose of the e-mail is to advertise or promote a product or service. </li></ul>
  31. 31. If You Send a Commercial Message it Must Include: <ul><li>A “clear and conspicuous” notice that the message is an advertisement or solicitation. </li></ul><ul><li>A legitimate return e-mail and physical postal address. </li></ul><ul><li>An Internet-based mechanism by which the recipient may “opt-out” of future commercial e-mail messages. The opt-out address must remain active for 30 days after the transmission of the e-mail (don’t let your mail box fill up) and opt-outs must be honored within 10 days. </li></ul><ul><li>A valid postal address. </li></ul>
  32. 32. Safe Harbor … <ul><li>There is no “Safe harbor” and the FTC did not provide a blanket exemption for nonprofit associations. </li></ul><ul><li>However, in actions brought by AGs and ISPs courts are permitted to consider whether defendants have followed reasonable compliance procedures when awarding damages. </li></ul>
  33. 33. Enforcement: <ul><li>FTC </li></ul><ul><li>Federal and State Regulators </li></ul><ul><li>ISPs (may sue for injunctive relief and damages) </li></ul>
  34. 34. Civil and Criminal Penalties: <ul><li>$250 per violation ($750 if willful) </li></ul><ul><li>3 years in prison for deception, falsifying header information, hacking, sending large numbers of commercial e-mails or falsifying registration. </li></ul><ul><li>5 years in prison if committed in furtherance of a felony </li></ul>
  35. 35. September 16 th : <ul><li>The Federal Trade Commission gave limited endorsement to offering cash rewards to people who help track down e-mail spammers </li></ul>
  36. 36. Also … <ul><li>You may not harvest e-mail messages automatically or purchase harvested e-mail addresses. </li></ul><ul><li>Once a recipient opts-out of e-mail communication, the Act prohibits the sale, lease, exchange, transfer or release of that person’s e-mail addresses to anyone else for any purpose. Publishing an opted-out e-mail address in your membership roster might be a questionable process. </li></ul>
  37. 37. Spam Facts … <ul><li>There are some 95,000 spam messages sent every day. </li></ul><ul><li>1 in 63 have a virus. </li></ul><ul><li>15% of all opt-out buttons are fake. </li></ul><ul><li>80% of all spam is sent by 600 people. </li></ul><ul><li>Can-Spam compliance rose from one-half of one percent in December ’03 to 7% in December ‘04. </li></ul>
  38. 38. Part Three: Do Not FAX! <ul><li>October 1, 2004 the FCC issued a “stay” of the fax rules until July 1, 2005. </li></ul>
  39. 39. Legislative Background <ul><li>Telephone Consumer Protection Act of 1991 (TCPA) prohibits the sending of unsolicited facsimile advertisements to a business or consumer without the express permission or invitation of the recipient. </li></ul><ul><li>This prohibition remains in effect today. </li></ul>
  40. 40. What Is New ? <ul><li>For the past 14 years, the FCC has interpreted “ express permission or invitation ” to include: </li></ul><ul><li>1) Established business relationships, such as: REALTOR to client, REALTOR to REALTOR, REALTOR Association to REALTOR, etc. </li></ul><ul><li>2) Oral consent to receive fax from recipient. </li></ul>
  41. 41. The New Rule … <ul><li>Requires prior to sending a fax: </li></ul><ul><li>1) express written permission from recipient, </li></ul><ul><li>2) the recipient’s specified fax number </li></ul><ul><li>3) signature of the fax recipient </li></ul><ul><li>Consent to receive faxes cannot be implied by listing a fax number on a membership application. </li></ul><ul><li>Applies to faxes sent to both business and residential numbers. </li></ul>
  42. 42. “ Unsolicited Advertisement” Defined … <ul><li>“ Any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission .&quot; </li></ul>
  43. 43. Examples: <ul><li>Listing agreements, listing presentations and CMAs </li></ul><ul><li>Property listings and buyer representation agreements. </li></ul><ul><li>Offers to purchase, counteroffers, disclosure forms, etc. </li></ul><ul><li>Information about continuing educations classes, meetings, seminars, annual conventions, products and services where a fee is charged. </li></ul>
  44. 44. Not included: <ul><li>Faxes deemed non-commercial in nature such as: </li></ul><ul><li>policy papers, </li></ul><ul><li>surveys, </li></ul><ul><li>notices of (free) association meetings. </li></ul>
  45. 45. Political announcements and solicitations … <ul><li>Purely political announcements or PAC solicitations do not appear to be subject to the fax Rules. </li></ul><ul><li>If the fax promotes a fundraising dinner or some other type of prize in return for a political donation, it may fall within the Rules. </li></ul>
  46. 46. Association “fax-on-demand” <ul><li>When faxing (non-advertising) information in response to a request from a member prior permission is not required. </li></ul><ul><li>When faxing promotional materials for a fee based seminar written consent is needed even if the member has requested the information through a phone call. </li></ul><ul><li>If the cover sheet to any fax contains an advertising message, prior written consent is required. </li></ul>
  47. 47. Penalties: <ul><li>$500 per fax </li></ul><ul><li>$1500 per blast fax to strangers </li></ul>
  48. 48. They’ll Never … <ul><li>Charter One Bank … $1,800,000 </li></ul><ul><li>Hooters … $12,000,000 </li></ul><ul><li> … $5,380,000 </li></ul><ul><li>Seventeen Motors … $7,000,000 </li></ul><ul><li>Visit </li></ul>
  49. 52. NAR has Petitioned for Reconsideration seeking to: <ul><li>· Clarify that the definition of an “inquiry” within the “established business relationship” need not be signed and in writing. </li></ul><ul><li>Allow faxes to those with whom they have done business in the past. </li></ul><ul><li>·Reconsider the consent requirements to permit other forms of permission such as: electronic, oral, or permission given through a third party. </li></ul>
  50. 53. Compliance … <ul><li>It is strongly recommended that associations alter their listing/representation forms to include language that obtains the customer's consent to receive faxes from their broker. </li></ul><ul><li>Ask new members to sign a consent form when they join. </li></ul><ul><li>Begin collecting consent from existing members. </li></ul>
  51. 54. Obtaining Consent: <ul><li>By direct mail, websites, email and interaction with customers but not by fax. </li></ul><ul><li>Electronic and digital signatures are acceptable, provided they comply with applicable law. </li></ul>
  52. 55. NAR’s Model Consent Form (Gov’t Affairs/hot link to Do Not/field guide) <ul><li>Contains consent for associations </li></ul><ul><li>Local Association collecting member consent for state and national associations is not required to send the consent forms to state and national offices. </li></ul><ul><li>Information entered into the NRDS database will show whether or not a member has consented to receive marketing communications from REALTOR® associations. </li></ul>
  53. 56. <ul><li>NAR has published a “Do-Not-Call, Do-Not-Fax, Do-Not-E-mail Toolkit” to provide REALTORS® with briefing material and compliance information on the federal the anti-solicitation laws/rules. </li></ul><ul><li>To order the toolkit, please go to: Do Not Call </li></ul><ul><li>or call Information Central at 800/874-6500 Request item number: 186-100. </li></ul>
  54. 57. <ul><li>Thank You </li></ul>