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Telemarketing FAQs
What telemarketing laws apply to me?
It depends. Which laws and regulations apply to you depends on a number of factors. Some of the most important factors are: (1) the location of your business; (2) the type of products and services you offer; (3) which states/countries you call into; (4) how you dial numbers - manual, automated, preview, predictive, etc.; (5) the type of leads you call; and (6) whether you qualify for any exemptions. If you call into only a few states, you will be subject to far less regulation than if you are running a national or international campaign. If you use an autodialer, more laws will apply to you than if your agents dial numbers manually. Also, depending on how aggressive your products are, additional product-specific and industry-specific rules may apply. There are both federal and state telemarketing laws. Many foreign countries have started developing telemarketing rules as well.
Do I need to follow the federal rules or the local state rules?
Usually both. Both the feds and the states have jurisdiction over telemarketing activities. You always need to follow the federal rules. You also need to follow the state rules in any state you call into or in which you maintain a professional telemarketing license. This is very different from email marketing because the federal CAN-SPAM Act trumps nearly all state commercial email law. This is not the case with telemarketing - both the federal and state rules must be followed.
What if the federal rule on a certain issue is different than the state rule?
You must follow whichever rule is more restrictive. For example, the federal rules prohibit telemarketing calls after 9pm, but the state of Mississippi prohibits calls after 8pm. When calling Mississippi, you would need to follow the Mississippi rule because it is more restrictive - you cannot call into Mississippi after 8pm their local time.
Which federal laws apply to telemarketing?
The FCC, FTC, and US Department of Justice enforce federal telemarketing law. Several federal statutes apply: (1) the FTC's Telephone Sales Rule ("TSR"); (2) the FCC's Telephone Consumer Protection Act ("TCPA"); and (3) other federal fair advertising and consumer protection statutes such as the Federal Trade Commission Act. Keep in mind that these laws and regulations are periodically modified either by Congress or by the agencies that enforce them. For example, the FTC amended the TSR in November, 2015.
What state telemarketing laws are there?
Most states have some sort of telemarketing regulation. In many states, there is a telemarketing statute which creates rules telemarketers must follow when calling residents of those states. Some states also require telemarketers to register and obtain a local telemarketer license. The types of rules are all over the board. For example, there are rules about: (1) calling time restrictions ("curfew"); (2) mandatory initial disclosures; (3) mandatory payment disclosures; (4) prohibited statements; (5) caller identity and caller ID; (6) permission to continue and no rebuttal rules; (7) record keeping; (8) holiday restrictions; (9) call recording/monitoring; (10) scripts; (11) prize promotions; (12) cancellation rights; and (13) internal opt-out procedures. On top of the telemarketing-specific laws, most states also have more general consumer protection statutes which govern all consumer transactions with residents of those states. Those consumer protection laws prohibit a variety of more general fraudulent and unfair trade practices.
Do I need a license to do telemarketing?
Usually yes, but it depends on who you are calling. There is no federal license required, but approximately 33 states have a local telemarketing license requirement. Also, the FCC and about 12 states have do-not-call lists which may apply and for which you may need to register.
If I already have a local telemarketing license in my home state, isn't that all I need?
No. Virtually all states which require a local telemarketing license, require you to get that state's license if you call into that state. Generally, states do not care where your call center is located - they care whether you are calling their residents. For example, even if you have no physical presense in the state of California, you still need a California telemarketing license if you want to call californians. Some exemptions apply.
How much does a telemarketing license cost?
It depends on the state. In some states, the application is free. In other states, the application fees are expensive. For example, the Vermont telemarketer application is free, but the Nevada application fee is $6,000. Some states also require you to obtain a surety bond from an insurance company. The cost of the bonds depends on which insurance company you use, your credit worthiness, whether you get cosigners, etc. Applying for a surety bond is similar to applying for a loan. In some states, the fees and bond amounts vary depending on how many agents you employ and whether you have ever had any violations of local telemarketing law.
What kind of information do they ask for on a telemarketing license application?
Again, it depends on the state. In some states the registration form is only one page and includes little more than your business name and contact information. In other states, the registration forms are more than 20 pages and you will need to disclose highly confidential information such as your SSN, home address, work history, criminal history, litigation history, copies of your drivers license, etc.
How is the national Do-Not-Call list different than the 12 state DNC lists?
The FCC maintains a national DNC list and consumers can add their names by visiting an FCC website. Generally, telemarketers cannot place calls to individuals on the national DNC unless an exemption applies. Approximately 12 states also have their own local DNC list which protect the consumers of those specific states. You generally cannot call people on those lists unless a state exemption applies. Thus, unless your calls are exempt, if you are calling all 50 states then you probably need to scrub against both the national DNC and all 12 state DNC lists. A number of private companies now provide outsourced scrubbing services.
How do I know if my calls are exempt from the DNC lists?
There are several exemptions to the national DNC list and the states also have multiple exemptions to their local DNC lists. There isn't room to explain all of them here, but some of the most important exemptions are: (1) calls made to individuals who previously gave you their express consent to call them; (2) calls made to people who recently purchased something from you; (3) non-sales, informational calls. These exemptions do not apply to every DNC list and they are complex. Whether a call is a sales call or an informational call depends on a number of factors. Also, whether you have the appropriate prior consent to call someone on the DNC list depends on how you obtained that consent. How recent a purchase needs to be for you to call a previous customer depends on the state. Research the possible exemption carefully before you decide you are exempt. Do not rely on this short summary. Violations of national and state DNC rules is a top cause of consumer complaints and government enforcement action. The financial penalties are stiff. Learn more about do not call regulations and cell phone do not call laws.
What is an internal DNC list? What is an entity-specific DNC list?
In addition to obtaining and scrubbing against all applicable government DNC lists, all telemarketers must create and maintain an internal opt-out list ("internal DNC"). Telemarketers may not call individuals who have asked not to be called again. No special langauge is required - any request by the consumer to not be called again or to be added to the no-call list triggers the duty to add that consumer's number to the internal DNC list. Opt-outs must be removed from the telemarketer's active calling lists and the call center must take steps to ensure that no additional calls are placed to those numbers. The number must be removed as soon as your technology permits, and in no event later than 30 days from the date of the opt out request.
Is robocalling illegal? Is autodialing illegal?
No, but it is highly restricted. New federal rules on autodialing and prerecorded messages make it virtually impossible to autodial a consumer's number without prior express consent from that consumer. When the FCC's new autodialer rules go into effect in the near future, the consumer's prior consent will need to be in writing. Web-consent may qualify as written consent under the federal ESIGN Act if certain requirments are met. Be aware that certain states, such as indiana for example, prohibit autodialing completely. How do you know if your system is an ATDS? What about avatar telemarketing laws and avatar telemarketing compliance?
Is telemarketing to cell phones illegal?
No, but is is highly restricted. It is virtually impossible to cold-call a cell phone number for telemarketing purposes. Prior express consent is required and new federal rules have made it more difficult to obtain sufficient consent. Most website "opt-in" data does not qualify because most lead generators are not following the consent rules. Also, the consent cannot be sold or transferred between affiliates. Even when properly obtained, the consent only applies to one specific business, for a specified purpose, and only to one specific telephone number. Other rules apply to the calling of cell phones as well. For example, it is more difficult to legally call a cell number with an autodialer than it is to manually dial a cell number. Some of the states are even more restrictive than the feds regarding cell phones. Non-exempt telemarketers must scrub against a national cell number list and ported number list. The implications of the cell phone restrictions continue to grow as more and more Americans convert to cell-only households. Click here to learn about text marketing.
How is business-to-business ("B2B") telemarketing different than calling consumers?
Business to business telemarketing, or b2b telemarketing, has its own challenges. Watch a video about business to business telemarketing or visit this b2b telemarketing website to learn more. B2B telemarketing is subject to far less regulation than telemarketing to consumers. For example, the federal DNC list and most state DNC lists do not apply to B2B calls. This is because these lists were designed to protect consumers and not businesses. Also, as a general rule, the TCPA and TSR do not apply to B2B calls. However, some rules still apply. For example, if you call a business cell phone, some of the federal and state cell restrictions might apply. If you use an autodialer, some of the autodialer restrictions may apply. It is sometimes difficult or impossible to know whether a consumer uses a business line also as their personal line. For example, if you purchase a list of business telephone numbers and called someone who uses their business number as their personal number as well, you may be in violation without knowing it. The FCC recently passed new cell phone rules which are not consumer specific and therefore probably apply to B2B calls. When these rules go into effect, it will become more difficult to call business cell phones without prior express consent.
Are inbound calls exempt from the telemareting rules?
Generally, no. Call centers that do inbound campaigns only will be exempt from some of the rules, but many rules still apply. For example, approximately 25 of the 33 states which have telemarketer licensing require the license for inbound telemarketers as well as outbound. The federal prohibitions against unfair and deceptive trade practices apply to inbound as well as outbound. Also, if the telemarketer receives an inbound call but then "upsells" the consumer, the call will be treated as if it had been an outbound call in many respects.
What happens if I violate a telemarketing law that I didn't even know about?
Generally, regulators may seek penalties whether you knew about the rules or not. Ignorance of the law is no excuse. However, the good news is that in most states, only civil/financial penalties (not criminal) apply if you did not know about the rule. Criminal penalties are usually reserved for knowing, willful, or repeat violators. If you willfully violate a telemarketing law, or if you continue to break the rules after having been warned by a government agency, it is more likely that you could face criminal charges.
What if I'm being investigated by a government agency for possible telemarketing violations?
A standard Attorney General letter can usually be resolved through one or two letters or phone calls to the investigating agency. Always be honest with regulators. Immediately investigate the allegations and respond to the inquiry within the amount of time they gave you. Never ignore an attorney general letter. If you need extra time to respond, ask for it. Make sure the regulator knows that you are committed to full-compliance and that you will make adjustments as needed. Do not be rude to regulators; treat them with respect and they may respond similarly. You should fully cooperate, but also realize that any information you disclose might be used against you later in a court proceeding. For this reason, it is always recommended that you speak with an experienced telemarketing attorney before responding. If a minor AG investigation has been escalated into a cease and desist notice, an escalated investigation, an administrative citation, or an actual civil enforcement lawsuit, call your legal counsel immediately.
Is text marketing legal?
Watch this short video about text marketing compliance.
What must a telemarketing telephone script contain?
Watch this short video about telemarketing telephone script compliance.
What about charities and nonprofits?
Watch this short video about telemarketing for charities and nonprofits.
How can I find an affordable, experienced telemarketing law firm to help me?
Running a holiday sale or weekly special? Definitely promote it here to get customers excited about getting a sweet deal. A lot of compliance can be done internally if you have the experience and staff to handle it on your own. However, even experienced call centers often have questions about trickier issues or want advice about possible compliance strategy. In addition, the longer you operate the more likely it is that you will eventually need representation in a frivolous consumer lawsuit or government investigation. For new companies, compliance can often seem impossible or cost-prohibitive. Many telemarketing startups want to handle their own compliance, but just need a little help getting started. Very few attorneys in the United States know anything about telemarketing law, which is highly specialized. For this reason, you should seek advice from a firm that focuses on this area of law. A good telemarketing law firm can set up your compliance infrastructure and then train you until you are ready to move forward on your own. Allen, Mitchell & Allen PLLC is THE top telemarketing law firm in the United States. Allen Legal is happy to provide a free consultation to learn about your business and to educate you about our low rates and cutting-edge legal services. Please visit telemarketinglawyer.com or call (801) 930-1117 for more information.