The Do Not Call Registry - Who Can You Call ?

We consulted William Bronchick a prominent real estate attorney about this issue, and he felt that unlicensed investors would have no problem in calling troubled homeowners. It is Mr. Bronchicks’ opinion that such calls would be seen as personal calls – but he acknowledged that he was not entirely clear on the FTC position.






May 2006



The Do Not Call Registry

by Alexis McGee



Back in October of 2003 in my “Who Can You Call?” column, I wrote an extensive review of the Federal Trade Commission implementation of a Do Not Call registry aimed at protecting consumers from annoying telemarketing calls.



This measure was, as one could expect, immediately challenged by the Association of Telemarketers and the Direct Marketing Association. They won a temporary victory by challenging the FTC rules on constitutional grounds. However, as their contest worked its way up through the court hierarchy, it was eventually found that the DNC registry was in fact legal.



The FTC rules were reinstated on January 1, 2005. The most significant change was a requirement that marketers “scrub” the Do Not Call list every 31 days and not call registered numbers. Previously, marketers had only been required to access the list on a quarterly basis.



Now, what does this mean to investors, as we try to contact troubled homeowners and help them resolve their problems. Are we selling anything? Are we marketers? Do we fall under the Do Not Call ruling?



Until we see legal cases argued in court, or amendments to the existing legislation, it is our personal opinion that investors without a real estate license are exempt from the Do Not Call rules. We are calling to offer free advice and assistance to help owners find ways to keep their homes when possible. We are not collecting a fee to stop their foreclosure nor are we solicating the owners to sell us their house.



We are not, however, attorneys, and do not offer legal advice.



Licensed Realtors on the other hand, according the National Association of Realtors (NAR) are barred from calling phone numbers on the Do Not Call list. Realtors like telemarketers, are required to access the DNC list every 31 days, and not call any registered numbers. The issue with licensed Realtors is that there in an implicit agency relationship when they call a homeowner. According to the NAR, the Realtors relationship is, in a way, the product they are selling (even if they are acting as a principal for their own account).



We consulted William Bronchick a prominent real estate attorney about this issue, and he felt that unlicensed investors would have no problem in calling troubled homeowners. It is Mr. Bronchicks’ opinion that such calls would be seen as personal calls – but he acknowledged that he was not entirely clear on the FTC position.



However if the Do Not Call Registry becomes an issue with unlicensed investors, a case agrued in the courts will be needed to clarify this question. In the meantime we should continue doing what we can to assist people in trouble whenever we can. Many will get to keep their homes, due to our free help. And for those troubled owners who cannot, they will have a chance to recapture some of their equity before the auction – rather than lose it all at the courthouse steps.

If you haven’t already read my original column, “Who Can You Call?” make sure you do so before you make your next call.



Happy investing, Alexis





Previous Related Article October 2003



Who Can You Call?

By Alexis McGee



On June 27, 2003, the Federal Trade Commission (FTC) officially launched its National Do-Not-Call Registry, allowing consumers to limit the telemarketing calls they receive at home. Since then, more than 50 million telephone numbers have been registered on the Do-Not-Call list.



Beginning on September 1, 2003, sellers will be able to access the Registry. Barring legal setbacks (See Recent Legal Challenges below), the new Rules become effective on October 1, 2003, with telemarketers risking an $11,000 fine each time they called a number on the list.



So how does this affect YOU, the Property Buyer? At the time of this writing, there is no National Do-Not-Call Registry. It has been ruled "unconstitutional". All I can say is Thank Goodness! I totally agree with this latest court ruling. (See Recent Legal Rulings below). But, until all the lawsuits are finally settled, and we have a final ruling, no one knows for sure what to do.



The best I can do for you at this point, is let you see what I found, and present the information as it stands today. Although I am not an attorney, I think there's a "gray area" as far as our foreclosure business is concerned. As investors, we are calling to offer assistance to a property owner. One of their choices maybe to sell their home, or may be to get a new loan, or file bankruptcy. Our calls are meant to secure an appointment for discussion of the matter, not to "sell the owner" anything.



In addition, there are "exceptions" being pushed by the NAR (See Petition for Reconsideration below). If they get passed, they will definitely clear the way for us Investors to do business as usual. Of course, we all know it will change again tomorrow, so watch for follow-up stories in future Marketing Mania Columns (See Related Links: Alexis McGee, Foreclosure Expert, Past Articles)



Here are the Key Elements of Do-Not-Call Rule:



* Telemarketers may continue to call individuals who have not placed their numbers on a do-not-call list and those with whom they have an established business relationship. (A telemarketer may contact a customer for 18 months after a business transaction and three months after an inquiry or application.)



* Consumers may register their cellular phone numbers.



* The FCC and FTC will coordinate enforcement efforts. The details will be announced in a Memorandum of Understanding between the two agencies.



* Consumers registering with the national registry will be able to provide express written permission to any companies from which they wish to receive telemarketing calls.



* The FTC will provide the list to telemarketers. It will be organized by area code. For the first five area codes, the list will be free. Any additional area codes will be assessed a fee with the fee for the entire list capped at $7200.



The Following Calls Will Still Be Permitted:



* Political solicitations



* Telephone surveys (calls purporting to take a survey, but also offer to sell goods or services, must comply with the Do Not Call Registry restrictions)



* Charitable solicitations





Additional Rules and Restrictions:



In addition to establishing a national "do not call" registry, amendments to the Telemarketing Sales Rule (TSR) restrict call abandonment, empower the enforcing agencies to crack down on unauthorized billing, and require telemarketers to transmit caller ID information.



Recent Legal Challenges:



On September 24, 2003:

The U.S. District Court for the Western District of Oklahoma has ruled that the FTC exceeded its authority in creating the National Do-Not-Call Registry. This decision is in response to the lawsuit filed by the Direct Marketing Association challenging the FTC's Do-Not-Call Registry.



On September 25, 2003:

A federal judge in Denver ruled that the government's plan to curb unsolicited telemarketing calls was unconstitutional (yeah!). The decision by U.S. District Judge Edward W. Nottingham was announced late today after Congress, voted to overturn another federal judge's decision this week to halt the government's plan to allow Americans to block telemarketing calls to their homes.



But Nottingham, ruling in favor of telemarketers who had challenged the registry, said it was unconstitutional on freedom-of-speech grounds because it would allow telemarketers for charitable organizations to continue to call numbers onthe list while barring commercial firms from doing so.



"There is no doubt that unwanted calls seeking charitable contributions are as invasive to the privacy of someone sitting down to dinner at home as unwanted calls from commercial telemarketers," Nottingham wrote. By exempting charitable solicitations, the FTC "has imposed a content-based limitation on what the consumer may ban from his home . . . thereby entangling the government in deciding what speech consumers should www.hear.The First Amendment prohibits the government from enacting laws creating a preference for certain types of speech based on content, without asserting a valid interest, premised on content, to justify its discrimination," the judge said.



News of the court decision came after the Senate voted 95 to 0 for legislation that would overturn a decision by U.S. District Judge Lee R. West in Oklahoma City blocking the government's do-not-call plan. Earlier in the day, the House passed similar legislation by a vote of 412 to 8. West's decision had caught government officials by surprise when he ruled Tuesday night that the Federal Trade Commission overstepped its authority. West said in his ruling that Congress had not given the FTC specific authority to develop and implement the list.



Congress's goal was to have the measure on President Bush's desk for his signature today, so Americans could start getting fewer telemarketing calls beginning Oct. 1. Bush issued a statement saying he looked forward to signing the measure. "The millions of people who have signed up for the list have the right to reduce unwanted telephone solicitations," he said.



On September 26, 2003:

The Federal Trade Commission said today that it would appeal and seek a stay of Nottingham's ruling yesterday that found the government's efforts to curb unsolicited telemarketing calls with a national do-not-call registry to be unconstitutional.



The Key Events that Led to the Do-Not-Call Registry:



In December 2002:

The Federal Trade Commission (FTC) amended their Telemarketing Sales Rule (TSR). Key among the changes was the development of a national do-not call registry directed at stopping most unwanted telemarketing calls to consumers.



The National Association of Realtors (NAR) sought to obtain an exemption for real estate professionals during the rulemaking process. Unfortunately, the FTC did not agree with the NAR position given their desire to tighten the rule and minimize exemptions. The FTC's authority however is limited to interstate activity. This was considered the good news because most NAR member sales activity is carried on intrastate.



In March 2003:

Congress enacted the Do-Not-Call Implementation Act. The purpose of the Act was to authorize the FTC to collect fees from telemarketers for the lists. In this legislation, Congress also required the FCC to issue final rules "to maximize consistency with the FTC rules". For example, the FTC lacks the authority to regulate banks, airlines, insurance companies, and telephone companies. It was anticipated the FCC among other things would consider these entities for inclusion under their rules. Congress also imposed reporting requirements on the FCC that include:



"An analysis of the progress of coordinating the operation and enforcement of the Do-Not-Call registry with similar registries established and maintained by the states". Obviously, Congress did not intend for the FCC to pre-empt state laws in this area. This analysis was to be presented to Congress annually.



In April 2003:

The FCC requested comments on how to meet this congressional mandate, specifically seeking input on administrative issues such as how to fulfill the reporting requirements set by Congress. Broadening the scope of the rule to include intrastate activity did not appear to be at risk. This was underscored by language in the FTC rule, which concluded that real estate brokerage activity was largely an intrastate activity, and therefore not subject to the rule.



The NAR submitted comments to the FCC, and saw this venue as an opportunity to publicly restate their position and to press for an exemption from the National Do-Not-Call registry requirements. Recognizing the FCC has authority to establish an exemption for "local telephone solicitations", the NAR urged the FCC to use this authority to grant them an exemption.



In the absence of a specific exemption, we joined the NAR in strongly encouraging the FCC to recognize that the FTC's authority is limited to interstate calls only.



On June 26, 2003:

The FCC responded to the overwhelming public demand and political pressure to eliminate as many unwanted calls as possible and adopted revisions to its existing rules to further restrict telemarketing activity to include intrastate calls.



The FCC's news release describing these amendments suggests that, most telemarketers, including real estate professionals, will now have to comply with the Federal Do-Not-Call rules, even when making only intrastate calls. The release further indicates that the FCC's rules constitute a floor and preempt all less restrictive state do-not-call rules.



On June 27, 2003:

The White House, The Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) launched the National Do-Not-Call registry.



On July 3, 2003:

Last week the Federal Communications Commission (FCC) announced final amendments to their Telemarketing Rules that would among other things extend the Do Not Call provisions of the FTC rule to intrastate calls. This is a significant change to the rules regulating telemarketing sales and a largely unexpected move by the FCC.



As a result, all real estate professionals now must comply with the requirements of the National Do Not Call Registry, regardless of state law exemptions. Earlier NAR communications and policy briefs maintained that unless real estate licensees were calling across state lines, compliance with the federal law was not necessary and instructed members to adhere to state law requirements. This latest action by the FCC reverses this interpretation of the TSR.



On July 9, 2003:

The recent rulemaking by the Federal Communications Commission (FCC) extends coverage of the National Do Not Call Program to intrastate telemarketing calls. Prior to this action, the Do-Not-Call Registry was intended to regulate interstate calls only; state laws were not preempted and would have continued to regulate intrastate call activity. Unfortunately, the actions taken by the FCC pre-empt less restrictive state do-not-call laws. State laws with exemptions for calls by certain professionals including real estate licensees, will be considered less restrictive and therefore no longer applicable.



Accessing the Registry



As of September 1, 2003, telemarketers (or sellers) are able to access and register with the registry. You will have to register with the FTC prior to accessing any lists. The lists are downloadable from the FTC site in several formats. The FTC is responsible for the administration of the Registry. To access it, See Related Links: FTC website.



The NAR Legal Affairs staff has prepared a summary of the registration process, including what information is necessary to receive access. That information is available for NAR members only (See Related Links: National Association of Realtors website).



Petition for Reconsideration of Telemarketing and Facsimile Advertising Rules



The NAR, in consultation with outside legal counsel, filed a Petition for Reconsideration on many of the issues associated with the National Do-Not-Call Registry Rules. Key among the issues for clarification is the permissibility of real estate professionals to call "for sale by owner" (FSBO) and expired listings. They are also seeking clarification on many of the practical applications of the rule as well as questioning the FCC's jurisdiction in preempting state laws that govern intrastate telemarketing. NAR staff has compiled a list of state by state Do-Not-Call Laws (See Related Links). This matrix includes a link to the state statute and indicates the type of exemptions, including those for real estate activity.



Specifically, the NAR Petition asks the FCC to:



* Modify its telemarketing rules to permit real estate professionals to call individuals who: 1) have listed their property as FSBO, and 2) have listed their property with an agent but the listing has expired, regardless of whether that individual's telephone number is on the Do-Not-Call registry.



* Clarify that the definition of an "inquiry" within the "established business relationship" need not be in writing and signed.



* Revise its consent requirements for faxed advertisement to permit other forms of communication of consent such as electronic, oral, or made through a third party.



* Reconsider its decision to preempt less restrictive state telemarketing laws



(See Related Links for the full text of the petition in .PDF format.)



It will take some time before the FTC responds to the NAR's petition. That response will also directly affect you, as property buyers and your attempts to contact owners by phone. As the information is made available, www.Foreclosures.com will keep you posted. Stay tuned to future Marketing Mania articles on this very hot topic.



Until then, happy investing!





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