Under a new regulation from the Federal Trade Commission’s (FTC), effective September 1, 2009, businesses may not place prerecorded marketing calls to their existing customers in other states (which would include Maryland and the District of Columbia) unless they have previously obtained the consumer’s signed, written agreement to receive such calls. The regulation will apply regardless of whether the call is answered by a person, an answering machine, or voice mail. Violators are subject to civil penalties of as much as $16,000 per violation. Each prerecorded call made without specific consumer permission constitutes a separate violation.
Sellers can obtain their customer’s permission for prerecorded sales calls in any manner permitted by the Electronic Signatures in Global and National Commerce Act (E-SIGN Act). Prerecorded calls that are subject to the Health Insurance Portability and Accountability Act (HIPAA) are exempt from this ban. Also exempt from the written agreement requirement are all charitable solicitation calls placed by for-profit telemarketers (telefunders) that deliver prerecorded messages on behalf of nonprofits to members of, or previous donors to, the nonprofit. But the telefunder must still have a system that includes a prompt keypress or voice-activated opt-out mechanism. Prerecorded calls to prospective donors to, or non-members of, a nonprofit organization are not permitted today.
Prerecorded marketing calls to non-customers are already prohibited by both the FTC and/or the Federal Communications Commission (FCC) whether they are interstate, intrastate (including local), or international calls. Both regulatory agencies require the seller to prove the existence of a prior business relationship, which is also subject to time limits.
Telemarketing is regulated by the FTC, the FCC and by most states. Some of the applicable regulations can be inconsistent. For example, the FCC’s rules do NOT require express, prior permission from existing customers to make prerecorded calls. Also, there is case law upholding the application of stricter state regulations to interstate calls even though both the FTC and FCC have indicated they would preempt state regulations that interfere with interstate commerce. Businesses new to telemarketing should strongly consider obtaining compliance advice prior to engaging in the practice.
For more information, contact General Counsel’s communications and e-marketing attorney, Robert H. Jackson.
