Telemarketing Legal Requirements in the United States

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Aaron Kelly

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Serving Scottsdale, AZ

Owner & Attorney at firm Kelly / Warner, PLLC

Serving Scottsdale, AZ

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Despite the widespread availability of advertising opportunities through television, print, the Internet, and elsewhere, the use of the telephone as a marketing tool is still favored by many businesses.  However, in recent years, governments on both the federal and state level have passed laws affecting how and when you can conduct telemarketing, and who you may direct it at.

The Do Not Call Registry

Because of federal legislation, telemarketers are now bound to honor the Do Not Call Registry.  The Do Not Call registry is an informational list managed by the Federal Trade Commission, containing the phone numbers of millions of American residents, which have been entered on the list by the affected phone number holders because they wish to reduce the amount of telemarketing calls to which they are subject.

Telemarketers must register to access the Do Not Call list, and in the case of accessing more than five area codes, must pay for it.  More information on signing up for it can be found at the National Do Not Call Registry website.

Exemptions from the Do Not Call Requirement

While there is a presumption that a telemarketer may not contact someone whose phone number is on the Do Not Call list, there are a few exceptions to the requirement to comply with the Do Not Call list.  These include:

  • Nonprofit organization phone calls.  Tax exempt status with the IRS or incorporation as a nonprofit organization does not necessarily meet the nonprofit standard required for the list.  According to the Federal Trade Commission’s Bureau of Business Protection website, an organization “operated for the profit of its members, officer, or affiliated for-profit companies” would not meet the nonprofit requirements, even if tax exempt with the IRS.
  • Informational messages.  If a message is not in any way related to inducing the purchase of goods or services, it may qualify for this exemption.
  • Surveys.  Calls which are conducted for the purpose of surveying the recipient are exempt.
  • Promotion of political candidates and parties.
  • Calls to businesses.  Telemarketers may call businesses to market to them.
  • Calls seeking charitable donations.

For every one of these calls except for calls to businesses, the call must not be made as a part of a plan, program or campaign to sell goods or services.  This is not an exhaustive list and there are other more complicated exemptions which may be applicable, as well.  Different rules can apply depending on whether the beneficiary of the calls is making the calls themselves, or whether a third-party telemarketer is making calls on behalf of the beneficiary.

Penalties for Ignoring the Do Not Call List

The financial penalties for ignoring the list are severe.  You may not engage in telemarketing:

  • To someone who is on the list.
  •  To anyone on the list if you did not sign up to access the list.
  • If you signed up for the list, to anyone in an area code you did not sign up for.

Contravention of any of these requirements subjects you to a maximum $16,000 fine per violation.  In other words, telemarketing to just a hundred numbers without having signed up to access the Do Not Call list subjects you to a maximum of $1.6 million in fines.  Considering that most telemarketers call far more than just one hundred numbers in a given day, you could be looking at fines which could force you out of business.

Although the Do Not Call list is managed by the FTC, the Federal Communications Commission and state officials (such as state Attorneys-General) may also enforce it.  This means that simply avoiding being a nuisance on a national scale is not be enough to avoid being fined, and you should be careful to comply with the law no matter how large or small your operation is.

Conclusion

This has only been a summary of the law relating to telemarketing in the United States.  In addition to the federal list, many states also maintain lists which could result in fines for ignoring.  To determine the legal compliance burden for your exact situation, you should contact a skilled business law attorney.

SOURCES

National Do Not Call Registry

Q&A For Telemarketers

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