Top 10 Outbound and Inbound

Compliance Issues Webinar

August 21, 2012

Joseph Sanscrainte

Law Office of

Joseph W. Sanscrainte

212-626-6934

jws@sanscrainte.com

Top 10 Outbound and Inbound Issues

Ryan Thurman

Director of Sales & Marketing

866-362-5478 ext. 116

Ryan@dnc.com

David van Everen 925-201-2014

VP, Online Marketing dvaneveren@five9.com

Session Objectives: Top 10 Issues

� Issue 1: FTC DNC Registry Data Book

� Issue 2: Latest numbers and stats on wireless usage in U.S.

� Issue 3: What “safe harbor” means for DNC compliance

� Issue 4: New FCC rules on prerecorded messages

� Issue 5: New FCC rules on predictive dialers

� Issue 6: New FCC rules on automated opt-outs

� Issue 7: Inbound calling myths . . . BUSTED!

� Issue 8: Preview dialing: what’s up with that?

� Issue 9: New FCC NPRM on PSA DNC List

� Issue 10: Enforcement trends

Webinar recording will be available on DNC.com

DNC and Wireless Overview

Issue 1: FTC National DNC Registry Data

� 207,264,658 million numbers on the registry

� Over 300 million cell phones. 50% of US has a smart phone.

� 13 States still holding out: 4.5 million unique State DNC numbers

� 3,537,200 ported cell phone numbers

� 1.6 million complaints.

� 40% of complaints are for pre-recorded calls

Poll: What type of dialers or calling strategies are in use today?

Hosted or cloud based?

DNC and Wireless Overview

Demise of the Outbound Call Center?

FTC Registrations Over Last 5 Years

2006 2007 2008 2009 2010

Entities who paid 6,824 6,242 4,618 3,923 3,383

5 or fewer area codes 58,816 59,337 46,559 40,406 34,206

Exempt entities 845 801 1,107 1,002 680

Issue 2: Latest numbers and stats on wireless usage in U.S

Poll: Fines for Calling Wireless Numbers?

Issue 3: To qualify for safe harbor, a seller must demonstrate that as part of its routine business practice it has:

� Established and written procedures to comply with the DNC rules

� Trained personnel in compliance procedures (including 3rd parties)

� Maintains and records a company specific DNC list

� Uses a process to employ the National DNC list

� Uses a process to prevent telemarketing to any DNC number

� Maintains records that document the compliance process

� Monitors and enforces compliance across the organization

� Follows 15 Day Update Rule for Wireless

� Follows 31 Day Update Rule for National DNC

NEW FCC RULES: BACKGROUND

• 2008: FTC changes its prerecorded rules

– prerecorded telemarketing messages require express written consent

– Opt-out via automated keypress or voice-activated mechanism

– Technology “agnostic” – doesn’t matter how you make the call; doesn’t matter if its to a landline or wireless

– Successive, 30 day, per campaign standard for abandonment

• January 2010: FCC NPRM

– FCC correctly concludes its prerecorded rules are different

– Proposed rules keep existing FCC framework – NOT agnostic

– “Rolling” v. “successive” abandonment measurement 8

ISSUE 4: PRED DIAL/PREREC CALLS TO CELL PHONES

• Old rule: no pred dial/prerec calls to cell phones w/out prior express consent

• New rule: FCC creates two categories: – Category 1: telemarketing pred dial/prerec calls to cell phones

– Category 2: all other pred dial/prerec calls cell phones

• Category 1 - FCC divides THESE calls into:– Calls that constitute telemarketing generally: prior express WRITTEN

consent required

– Telemarketing calls made by tax-exempt non-profit orgs – prior express consent (i.e., no writing) sufficient

– HIPAA calls

• Category 2 – “catch-all”– All pred dial/prerec calls to cells OTHER than above – consent only

– Informational, non-telemarketing calls9

Predictive Dialer Vendor Checklist

� Established, Proven

� Takes Compliance Seriously

� Has Compliance Partners

� Provides Essential Features:� Abandonment

� Safe Harbor

� Company DNC List

� State Regulations

� Compliance Reporting

� Phone Types

� Time of Day

• Market leader in cloud-

based contact center

software

• Founded 2001

• 1500+ customers

• 2 billion calls annually

• 100+ engineers

• Member of PACE

Association

• Multiple partners for

compliance services

ISSUE 4: PREREC CALLS TO RESIDENTIAL LINES

• Old rule: you need prior express consent to deliver prerec telemarketing call to residential line– UNLESS you have an EBR – then no consent required

– FTC removed EBR exemption in August, 2008 AND required express written consent

• New rule: FCC follows FTC rule– You can not rely on EBR when delivering a prerec

telemarketing call to a residential line

– must obtain express written consent for ANY such call

– FCC makes clear this ONLY applies to telemarketing, and NOT informational and non-telemarketing calls

– New rule does not apply to HIPAA calls11

ISSUE 5: ABANDONED CALL CHANGES

• Old rule: measure abandonment rate every 30 days across all calling campaigns– FTC requires measurement on a 30 day successive day

basis per campaign

• New rule: Same as FTC– Ok, almost . . . Seller has to disclose that the call was

for “telemarketing purposes” along with name and telephone number of the seller

12

ISSUE 6: AUTOMATED OPT-OUTS

• FTC rule: – PR TM calls that “could be answered by a person”

must have interactive voice or keypress opt-out

– PR TM calls that “could be answered by an answering machine” require toll-free # disclosure

• FCC rule: see above, but . . . – Unlike FTC, FCC requires opt-out during

ABANDONED CALL message

– Toll-free # disclosure must be made during PR TM messages that are in fact left on answering machines

13

IMPLEMENTATION?

• “Start” point: publication of OMB’s approval

• FCC establishes:– 30-day period for abandoned call rule

– 90-day period for opt-out mechanism for prerectelemarketing calls and abandoned messages

– 12-month period for phasing out EBR exemption for prerec telemarketing calls to residential lines

– 12-month period for implementing rule that prior express consetn be in writing for predictive dialer calls to cell phones

14

ISSUE 7: MYTHS REGARDING INBOUND CALLING

• MYTH: “I don’t have to worry about state telemarketer registration rules if I only do inbound calls.”

• FACTS:– 33 states require registration by telemarketers

– 25 of these states apply their rules to INBOUND calls

– Many exemptions apply, but many inbound programs need to register

• MYTH: FTC TSR does NOT apply to inbound calls

• FACTS:– Section 5(a) of the FTC Act gives FTC ability to enforce against “unfair”

and/or “deceptive” practices

– TSR may cover inbound calls based on type of offer being made

– TSR may cover inbound calls based on how calls are generated

– TSR covers “upsells”

15

ISSUE 8: PREVIEW DIALING

POLL: Preview Dialing falls under TCPA?

• 1991: TCPA is passed – “no person or entity may initiate any call [to a cell number] . . . using an automated telephone dialing system (ATDS).”

• 2003: FCC decides that a predictive dialer is an ATDS.

• So . . . “preview mode” in a dialer = ATDS? Devil is in the details . . .

• In 2003, FCC determined that any equipment that: 1) has the “capacity to dial numbers without human intervention”; and, 2) that can “dial thousands of numbers in a short period of time” is an ATDS.

• Last time I checked: 1) Preview mode requires human intervention; and 2) Preview mode has no abandoned calls –1 to 1 calling and no “thousands of numbers being called in short period.”

ISSUE 9: PUBLIC SAFETY DNC?

• Your government at work: as part of “Middle Class Tax Relief and Job Creation Act of 2012” the FCC has to . . . create a Do Not Call list for “public safety answering points” (PSAPs)

• DNC list ONLY for automatic dialing/robocalls to PSAPs (facilities designated to receive emergency “911” calls)

• There are 6100 PSAPs in the US (as per the National Emergency Number Association)

• NPRM requests information regarding . . . EVERYTHING:– No legislative history for Section 6507 of Middle Class Tax Relief Act

– FCC asks: “uh, aren’t there already rules prohibiting such calls?”

– FCC asks: “Seriously, a list for a few thousand numbers?”

– FCC asks: “Isn’t there ALREADY a list of such numbers?”

– FCC asks: “Can’t we just piggyback on the FTC’s DNC list?”

– FCC asks: “Do we REALLY want to widely disseminate a list of ALL emergency numbers in the United States? REALLY?” 17

ISSUE 10: ENFORCEMENT TRENDS

• Forwarding calls from land line to wireless line: who’s responsible?

• A word on political calling . . .

• A few rules to live by regarding bill collecting:– DO: make sure the people actually owe money

– DON’T: pretend that you’re with law enforcement

– DON’T: (and I can’t stress this enough) threaten to take away a consumer’s children if they don’t pay a debt!

• Business Opportunities:– Front and center for both FTC (new biz opp rule) and the states

• Taking advantage of people in financial distress– Stay away from: 1) offering small, short-term loans; and 2) not revealing

high cost fees and interest rates

– Watch out for programs charging up-front for lowering car payments

Questions ?

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866-362-5478 ext. 116

DNC.COMRyan@dnc.com

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