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Rebooting the Robocall Rule

December 2009, F&I and Showroom - Feature

by Rob Cohen, Esq.

The Federal Trade Commission revision of the Telemarketing Sales Rule (TSR) last year was far from an overhaul, as the primary purpose of the revision was to further restrict “robocalls,” or telemarketing calls that contain prerecorded messages. However, the change could pose a real maze of problems for dealers who aren’t up to speed.

Up until Sept. 1, marketers could make robocalls to existing customers without their express permission under the existing business relationship (EBR) exception. With the recent amendment, that exception is now gone, which means dealers will need to get written permission from their customers before the first robocall is made.

The one thing dealers need to remember is the TSR only applies to telemarketing calls, which is defined as “a plan, program or campaign which is conducted to induce the purchase of goods and services or a charitable contribution, by use of one or more telephones and which involves more than one interstate phone call.”

So, if the calls are for information only (e.g., a notice of recall), then the TSR does not apply. Also, the TSR only applies to interstate calls, or calls made across state lines. Therefore, if your dealership only calls customers within the same state, then the TSR does not apply. However, most dealers use outside vendors to make the robocalls on the dealership’s behalf, which is where the law gets sticky.

According to the revised rule, if a vendor is using phones in another state or country, then the TSR applies. But even in cases where the TSR does not apply, dealers still need to comply with the Federal Communication Commission’s Telephone Consumer Protection Act (TCPA), which does contain an EBR exception for robocalls. So, if you only make prerecorded telemarketing calls to customers within your state, you do not need their prior express permission to receive such calls. 

However, there are still various requirements for such robocalls under the TCPA, which is why I advise dealers to visit www.fcc.gov/cgb/policy/telemarketing.html for more information on the topic.

For the signed, written agreement, the TSR requires the following:

• A clear and conspicuous disclosure that the purpose of the agreement is to authorize the dealer to place prerecorded calls to such person.

• Customer’s consent for such calls cannot be obtained as a condition of purchasing any good or service (i.e., the agreement must be optional).

• Permits sellers to obtain the required permission for prerecorded message sales calls from a consumer in any manner permitted by the Electronic Signatures In Global and National Commerce Act.

• Exempts from the written agreement requirement all charitable solicitation calls placed by for-profit telemarketers to members of, or previous donors to, the nonprofit (the rule does require that such calls include a prompt keypress or voice-activated opt-out mechanism).

• Requires that sellers and telemarketers provide, at the outset of all prerecorded messages, an automated keypress or voice-activated opt-out mechanism.

Additionally, the amendment offers these five requirements for prerecorded telemarketing calls:

1. Allow the telephone to ring for at least 15 seconds, or four rings, before an unanswered call is disconnected.

2. Begin the prerecorded message within two seconds of a completed greeting by the consumer who answers.

3. Disclose at the outset of the call that the recipient may ask to be placed on the company’s do-not-call list at any time during the message.

4. In cases where the call is answered by a person, make an automated interactive voice and/or keypress-activated opt-out mechanism available during the message that adds the phone number to the company’s do-not-call list. The call should terminate immediately afterwards.

5. In cases where the call is answered by an answering machine or voicemail, provide a toll-free number that allows the person called to be connected to an automated interactive voice and/or keypress-activated opt-out mechanism. The telemarketer, while complying with each of these provisions, also must be in compliance with all other requirements of the TSR and other federal and state laws.

Rob Cohen is an attorney and president of Auto Advisory Services Inc. E-mail him at rob.cohen@bobit.com.

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