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Compliance Guide™ Features

June 2010 : An Effective Telemarketing Compliance Program

by Joseph Sanscrainte, an attorney specializing in telemarketing law..

Given the fact that the total resources of the various regulatory bodies in the United States is no match for the sheer number, and mobility, of telemarketers, it may not be surprising that a significant percentage of telemarketers take a "we?ll cross that bridge" approach to compliance. That is, some telemarketers appear to think of a compliance program as a sort of fire alarm - they?ll break the glass only AFTER the fire has already started, and expect everything to work out at that point.

As an attorney specializing in telemarketing law, it may come as no surprise that I recommend a different approach. The fact is, state attorneys general and the FTC collect complaints about companies on an on-going basis. It?s difficult to determine what leads a regulator to conclude that a subpoena and formal investigation of a company is required - in fact, even a single complaint (referred to in legal parlance as "doozies") can lead to an investigation. In other words, a formal investigation - and the disruptions and costs that come with it - can occur at any time.

The point is, you should always make sure that your fire extinguishers are properly charged, your sprinkler system is functioning, and that your employees know what to do in the event of fire. (Oh, and while you?re at it, you should probably put together a reasonably robust telemarketing compliance program designed to enable you to quickly, and effectively, respond to a regulator?s subpoena.)

So, what exactly comprises a reasonably robust telemarketing compliance program? Thought you?d never ask . . .

  • Registrations: Make sure that you are properly registered, both as a telemarketer and for Do Not Call purposes, across the United States. Lack of registration is an "easy kill" for regulators - every call you make in violation of a registration rule can be considered a violation, which greatly reduces your negotiating power in the event the regulator is considering a fine against your company.
  • Do Not Call: Make sure you are complying with state and federal Do Not Call laws.
  • Written policies: You should have on file written policies and related instructional material regarding: 1) state, national, and internal DNC compliance; 2) your internal DNC policy for production to consumers in the event of a request for same; 3) predictive dialer/abandonment rates; 4) caller ID; 5) calling time restrictions; 6) script disclosures (identification and purchase); 7) state contract cancellation rules; 8) no rebuttal/permission to continue; and 9) overall billing rules (i.e., express informed consent, express verifiable authorization.)
  • Dissemination Plan: You should have an organized plan for distributing all of your written policies and instructional materials to all impacted employees, and for obtaining affirmations from all such employees that they have read, understood, and will abide by the policies. (Some questions regarding the policies would be a good idea as well.)
  • Reporting Plan: You should have an organized plan to generate reports regarding (at a minimum): 1) registrations (generated annually); 2) predictive dialer compliance (every 30 days); 3) federal DNC list download (every 31 days); 4) DNC exception report (every week); and 5) internal DNC statistics and issues (every week.)
  • Script Review: You should ensure that all of the scripts you are using are reviewed to make sure that all state and federal rules are being followed (taking into account, as appropriate, EBR and permission exemptions).
  • Complaint Tracking: Complaints to BBB?s, state AGs, and chargeback requests should be tracked, both for trend analysis and for ensuring that all such complaints have been properly processed.

Finally, every telemarketing entity should have a person designated as its "Compliance Officer," and it?s the Compliance Officer?s job to create and implement the compliance program outlined above.

A compliance program like the one outlined above is best considered as a cost of doing business for any entity that engages in telemarketing in the United States. Although it may take time and effort to implement such a program, the frustration and headaches that are avoided in the event of a formal investigation make it all very much worth it.

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