Strategies for Avoiding DNC Litigation

Mary Beth Guard, Executive Editor
Guru Bios

To successfully avoid litigation, you must be thoroughly familiar with the legal requirements and must adhere to them. They're complex and confusing, but this step by step guide, along with the related definitional pages, rule excerpts and rule summary, will help you get the job done.

Familiarize yourself with the special terminology used in connection with the Do Not Call requirements so that you are in a position, for example, to determine whether you are calling someone with whom you have an "established business relationship." Click here for our definitional guide.
Determine whether or not you need to be using the national DNC list. (See the related articles for help in doing this.)
Evaluate your telephone-based marketing activities in order to understand the full scope of what you do -- and what its legal implications may be under the Telephone Consumer Protection Act, the FCC rules, and any applicable state law or regulation.
- Do you engage in telemarketing or telephone solicitation either directly or through a third party?
- Do you contact existing customers in an attempt to cross-sell or up-sell them?
- Do you have an "existing business relationship" with those individuals, as that term is defined in the DNC rules?
- When noncustomers contact your bank, do you attempt to then re-contact them to interest them in products or services? If so, do you first determine that they have made the type of inquiry that then makes them fair game under the existing business relationship test?
- When you hire an employee who was formerly with another financial institution, does that individual attempt to contact customers of his former bank to try to persuade them to move their business?
- If someone calls your bank to inquire about one of your products and services, do you ever call them back to interest them in one of your offerings?
Take our "Are you telemarketing?" test. If you are a true telemarketer, you are going to need to routinely purchase the federal DNC registry database and scrub your calling lists against it. If you stick to calling only those individuals with whom you have an established business relationship or a personal relationship, as those terms are defined, or from whom you have express permission, you don't have to utilize the national database, but you still will need an internal DNC list. Watch out for new employees that you've recruited from other institutions. If they call former customers of theirs who are individuals at residential numbers, you've crossed the line. If they only call business customers, however, those calls don't trigger compliance obligations under the DNC rules.
Adopt a written Do Not Call policy that accurately reflects your institution's actual practices. A sample Do Not Call policy template, prepared by the authors of the bank policies for the BOL Banker Store, is available for download free of charge. Use it as a starting point for your own policy. Click here to go to the Policy Central page to download your free copy of the policy template.
Since any individual can make a request to be put on a company's internal Do-Not-Call list, every institution needs a Do--Not-Call list unless the institution truly makes no outbound calls. How could you ever be certain that none of your employees are contacting customers or prospective customers to try to interest them in one of your products and services? "Hey, George. At last week's Rotary meeting, you mentioned you were looking for a good CD rate. Boy, we changed ours this morning and it's excellent, so I wanted to mention it to you." Once an individual has made a request to be placed on your internal DNC list, you cannot contact him by telephone unless he gives you direct permission. That's true even if you have an established business relationship with the individual (it does not hamper debt collection calls, however).
Every institution that makes telemarketing calls of virtually any type to virtually any consumer, including those who fall within the exceptions, needs to do four things:
- Establish and implement written procedures to comply with the do-not-call rules;
- Train your personnel, and any entity assisting in your compliance, in the procedures established pursuant to the DNC rules;
- Maintain and record a list of telephone numbers you may not contact;
- Figure out how you're going to effectuate the internal DNC requests. If the requester is a customer, see if you can build the request into your customer record. If the requester is simply someone who made an inquiry, you're going to have to find another method.
Establish a central point of contact, whether that's an individual (who has an established back-up for vacations and other days out of the institution) or a department, and make sure all your employees know to route calls, emails and faxes that deal with telephone solicitation or telemarketing to that central point of contact for proper handling and disposition.
Ensure your employees clearly understand the narrow exception for calls to consumers with whom you have an "established business relationship" and that the necessary documentation is obtained. You don't want to risk having an employee make calls outside the exceptions, and thus subject you to the need to procure and use the national list.
If you qualify as a telemarketer who is required to use the national list, use a process to prevent telemarketing to any telephone number of any list established pursuant to the DNC rules within a timeframe specified by rule (originally no more than 3 months prior to the date a call is made, but as of 1/1/05, the search is required to be made at least once every 31 days);