Finally, the Truth about B2B and

Non-Profit Telemarketing Law!

Webinar Presentation by attorney Eric Allen and Ryan Thurman

December 17, 2015

Top Litigious States

Top five in terms of total number of known

litigants:

1. California (10,607 know litigators)

2. Florida (8,245 know litigators)

3. New York (6,703 know litigators)

4. Pennsylvania (4,990 know litigators)

5. Illinois (4,598 know litigators)

Top Litigious States

Top five with population factored in:

1. District of Columbia (1 litigator per every 1,985

people)

2. Florida (1 litigator per every 2,413 people)

3. New Jersey (1 litigator per every 2,559 people)

4. Pennsylvania (1 litigator per every 2,563 people)

5. Nevada (1 litigator per every 2,626 people)

Litigator Scrub

Identifies serial TCPA plaintiffs & mitigates risk while running wireless and DNC scrubs

Over 89,000 litigator phone numbers and growing

Updated monthly from multiple sources

First of its kind industry solution

Identify litigators on both inbound and outbound campaigns

Stops professional litigants in their tracks

Free Litigator Scrub Test

Who is watching YOU?Various agencies regulate

call centers and telemarketing

Federal Communications Commission (FCC).

Federal Trade Commission (FTC).

(NEW) Consumer Financial Protection Bureau (CFPB).

The US Department of Justice / US A.G

State Attorneys General and other local consumer protection agencies.

Agencies share complaint data! Consumer Sentinel System.

(NEW) Econsumer.gov = new FTC international partnership and complaint database.

FCC now releases unaudited complaint data online!

(Non government watchdog) Better Business Bureau (BBB). BBB cannot regulate, but it investigates & reports.

Private Plaintiffs and their counsel.

True or False?

“But I’m B2B so I’m exempt from all this

Crap!”

“No, that doesn’t apply to me because I

only work for non-profits.”

“We are a charity/political org so we are

all good.”

The truth is, these are partly true and

partly false. B2B and Non-Profit

telemarketing are exempt from some, but

not all of the rules. We will provide the

answers today!

B2B and the FTC (TSR)

In general, B2B is exempt from the Telemarketing Sales

(TSR) , except for the sale of non-durable office supplies:

16 CFR §310.6 Exemptions.

(b) The following acts or practices are exempt from this

Rule: … (7) Telephone calls between a telemarketer and

any business, except calls to induce the retail sale of

nondurable office or cleaning supplies;

NOTE: The FTC has separate, non-telemarketing rules

about fair practices in advertising that still apply B2B

(honesty, no misrepresentations, disclosure of key terms,

etc.) See the Federal Trade Commission Act, for starters.

B2B and the FCC (TCPA)

There is no specific B2B exemption from the TCPA/FCC,

like there is for the TSR/FTC. Some of the language in

the TCPA is not consumer specific.

Example: “All artificial or prerecorded voice telephone

messages shall… (lists various behavior and disclosure

requirements).”

Most notably, the dialer/ATDS rules protect all cell

phones, not just consumer cells

HOWEVER, THERE IS NO TCPA (OR TSR) BAN AGAINST

PRERECORDED ROBOCALLS TO BUSINESS LANDLINES

But How does the TCPA protect

business cells?

CFR § 64.1200 (a) No person or entity may:…(2)

Initiate, or cause to be initiated, any telephone call

that includes or introduces an advertisement or

constitutes telemarketing, using an automatic

telephone dialing system or an artificial or

prerecorded voice, to any of the lines or telephone

numbers described in paragraphs (a)(1)(i) through (iii)

of this section [any telephone number assigned to a

paging service, cellular telephone service, specialized

mobile radio service, or other radio common carrier

service, or any service for which the called party is

charged for the call], other than a call made with the

prior express written consent of the called party…

Implications for autodialed

calls to business cells

B2B must scrub wireless (block/carrier file and

ported list), just like B2C, when using an

autodialer/ATDS or prerecorded message.

OR

B2B must obtain prior express written consent to

autodial a business cell.

“Written Consent” may be obtained using proper

disclosures and recordkeeping on a web opt-in

page, paper form, email or text communication,

recorded phone call, or any other method that

would create an electronic signature under the

Federal ESIGN Act or similar state laws.

How to obtain written

consent to call cell phonesCFR § 64.1200(f)(8)

The term prior express written consent means an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered. (i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that: (A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and (B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.

How to obtain written

consent to call cell phones Requirements

Written agreement which includes the signature of the person providing consent (can be an electronic signature per ESIGN Act).

Agreement must indicate the specific seller (or sellers) to whom consent is being provided.

Agreement must included the telephone number to be called.

The person must take some affirmative action to clearly indicate their consent.

Agreement must disclose:

The consumer authorizes the company to make telemarketing calls.

The calls will be placed using an ATDS (including prerecorded if applicable).

The consumer is not required to provide consent as a condition of purchase.

Methods

Website opt-in (proper language, affirmative action, store consents).

Paper forms (but sweepstakes entry forms are risky). Can’t hide in fine print.

Live recorded consent over the phone. Careful not to explode your internal DNC! (this only applies to marketers)

Necessary consent elements

for “written consent”

For obtaining “prior express written consent”:

Identify specific telephone number to be called.

Identify the purpose (marketing, collections, etc.)

Identify which specific business(es) will call them.

Identify technology to be used (ATDS, Prerecorded, SMS).

Disclose that they are not required to consent in order to buy something (for marketers only).

Collect an unambiguous, affirmative agreement evidencing consent after “clear and conspicuous” discloses. (Can’t be in fine print or in privacy policy, etc.)

Obtain written signature (or electronic signature under ESIGN Act or similar state laws).

Sample consent language

By clicking SUBMIT, I agree to be contacted by Allen Legal, along with its agents and partners, at the number I entered above, which I certify is my own number, for marketing and other purposes, including through the possible use of an autodialer, prerecorded and text messages. I agree that calls may be recorded or monitored and I will update Allen Legal immediately if I change my number. I am not required to consent in order to purchase. SUBMIT

Be sure to capture at least the following:

URL

Time and Date Stamp

IP Address

Screenshot or similar data showing exactly what they saw when they consented and what they entered into the form.

Store for at least 5 years beyond the last date you will rely on the consent.

B2B and the National DNC list

Must B2B scrub against the national DNC?

Genuine business numbers are not protected by the

National DNC list. Meaning, even if someone put their

business line on the DNC, it is not a violation to call it

under the federal rules.

Why should B2B still scrub DNC?

State DNC. Not every state has a clear B2B exemption

from their local DNC rules. For example, Utah state

law makes it illegal to call numbers on the National

DNC, and Utah lists no B2B exemption, unlike in the

TSR. Also, the Colorado Supreme Court specifically held

that its state DNC list protects home-based businesses.

Dual purpose lines. You may think you are calling a

business line, but the recipient may feel it is primarily

their personal line.

B2B exemption from state

telemarketing licenses

Business-to-business ("B2B") telemarketers. Some

states have exemptions for telemarketers who only call

other businesses. Whether you qualify may depend on

what was sold, whether the business purchased

something from you in the past, whether you send

descriptive literature before the new transaction, or

other factors.

States having B2B exemptions from local licensing:

Alabama, Arizona, Arkansas, Colorado, Delaware,

Florida, Kentucky, Mississippi, Maine, Montana, New

Jersey, New York, North Carolina, Ohio, Oklahoma,

Pennsylvania, South Dakota, Texas, Washington,

West Virginia, Wisconsin, Wyoming.

Also remember that some states have no license at all.

Read exemptions carefully – some are complex!

FTC’s jurisdiction over non-

profit calls

The FTC does not have jurisdiction over non-profit

organizations. Therefore, non-profit organizations are not

required to comply with the TSR. The FTC does, however,

have jurisdiction over third parties that contract with

nonprofit organizations. The FCC has much broader

jurisdiction than the FTC, including jurisdiction over

nonprofit organizations. Non-profit organizations are

therefore not exempt from the TCPA, except as discussed

below.

Enough of B2B, what about

non profits? Charities?

Political Orgs?

In general, non-profit calls, whether

political, charitable, educational,

etc., are treated the same under

telemarketing law (TCPA and TSR).

Non-profit calls are exempt from

many, but not all, of the rules.

FCC jurisdiction over non-

profit calls

Unlike the FTC, the FCC has jurisdiction over all

non-profit calls.

The TCPA includes a number of dialing restrictions

that are applicable to calls “by or on behalf of”

non-profits.

Telephone Solicitations under

the TCPA

47 C.F.R. § 64.1200(f)(14)

The term telephone solicitation means the initiation

of a telephone call or message for the purpose of

encouraging the purchase or rental of, or investment

in, property, goods, or services, which is transmitted

to any person, but such term does not include a call

or message: …

(iii) By or on behalf of a tax-exempt nonprofit

organization.

Do the TSR DNC provisions cover

calls soliciting money for

charities?

Charities that are calling on their own behalf to solicit charitable

contributions do not need to scrub against the national DNC list.

However, if a third-party telemarketer is calling on behalf of a

charity, a consumer may ask not to receive any more calls from or

on behalf of that specific charity. If a third-party telemarketer calls

again on behalf of that charity, the telemarketer may be subject to

a fine of up to $16,000.

IE, charities and other non-profits DO NOT need to scrub against the

national DNC, and neither do their for-profit vendors, but the for-

profit vendor needs to honor internal DNC requests.

How do you qualify as a nonprofit

organization for purposes of the

TSR?

To qualify for this type of exemption, an organization

must be truly nonprofit. That is, it must not be

organized to conduct business for its own profit or the

profit of its members. Please note that an organization

that has been incorporated as a nonprofit or recognized

by the IRS as tax-exempt is not necessarily an Exempt

Organization for purposes of the National Do Not Call

Registry. The FTC has successfully charged that an

organization that purports to be a nonprofit is not

exempt if the organization is, in fact, operated for the

profit of its members, officer, or affiliated for-profit

companies.

Telefunders are prohibited

from:

Making a false or misleading statement to induce a

charitable contribution.

Making misrepresentations.

Engaging in credit card laundering.

Placing “cold” calls that deliver prerecorded messages.

Engaging in acts defined as abusive under the TSR, such

as calling before 8 a.m. or after 9 p.m., disclosing or

receiving consumers’ unencrypted account information,

and denying or interfering with a consumer’s right to be

placed on a Do Not Call list.

Prohibited Misrepresentations

in charitable solicitations

1. The nature, purpose, or mission of the entity on

whose behalf the solicitation is made

2. Tax deductibility

3. Purpose of a contribution

4. Percentage or amount of contribution that goes

to the charitable organization or program

5. Material aspects of prize promotions

6. Affiliations, endorsements, or sponsorship

Scenario 1 - Nonprofit entity robocalls

on its own behalf to make

informational/political callsFTC has no jurisdiction. The FCC has jurisdiction over nonprofits, but here the nonprofit is not “telemarketing.” Nonetheless, there are certain TCPA rules that apply:

The nonprofit cannot call cell phones unless they have prior express consent (not “written consent”).

15 day safe harbor provision for calling of ported cells;

Cannot tie up multiple business lines;

Cannot disconnect an unanswered telemarketing call prior to at least 15 seconds or four (4) rings;

Cannot abandon more than 3% of answered telemarketing calls;

Cannot use any technology to dial any telephone number for the purpose of determining whether the line is a fax/voice line;

Required to disclose the name of the entity responsible for initiating the call and the telephone number of the responsible entity.

Scenario 2 - Nonprofit entity

robocalls on its own behalf to raise

money (telefunding)

Exempt from FTC/TSR.

If call does not contain telemarketing/advertising then the

same TCPA rules as in scenario 1 apply.

If call does contain telemarketing/advertising then the

following restrictions apply in addition to those discussed in

scenario 1:

15 day ported number safe harbor no longer applies.

Call must include automated, interactive voice-and/or key press-

activated opt-out mechanism.

Scenario 3 - For profit vender

robocalls on behalf of the nonprofit

to make informational political

calls

Exempt from FTC/TSR

The same TCPA rules as discussed in scenario 1

would apply to this scenario as well.

Scenario 4 - For profit vendor

robocalls on behalf of the non-

profit to raise money (telefunding)

FTC/TSR applies!

The same rules apply to the for profit vendor as for any other

telemarketer, with two exceptions.

Solicitations to induce charitable contributions are exempt from

federal DNC requirements.

For profit vendor would be banned from making misrepresentations

The same TCPA rules would apply as in scenario 2,

For profit vendor also required to maintain internal DNC list.

How non-profits can obtain

“express consent” to call

cell phones

“Express Consent” was left undefined in the TCPA.

One Federal Court, when deciding an important TCPA

case, said that “express consent” is “consent that is

clearly and unmistakably stated.” Satterfield v. Simon

& Shuster (2009)

However, regarding implied-express consent based on

the provision of the number, the FCC said: (for non-

marketing or non-profit calls only)

“Persons who knowingly release their phone numbers

have in effect given their invitation or permission to be

called at the number which they have given, absent

instructions to the contrary.”

Frequently Asked Questions

Are charities allowed to call cell phones?

Yes, unless they use an autodialer/ATDS, in which case they need express consent.

Keep in mind that this is a lower standard of consent than what is required for telemarketing calls (“Written consent”). It is the same level that is needed for debt-collection and information calls.

This means that if charities are calling using an ATDS, they need to either have consent or scrub out cell phones.

Either with or without consent, also scrub for reassigned numbers as best practice.

Frequently Asked Questions

Do non-profits need to scrub against state and federal

DNC lists?

Non-profit organizations do not need to scrub

against the national DNC list, but they should

maintain their own internal DNC list as a best

practice. A for-profit telemarketing vendor of the

non-profit MUST maintain an internal DNC.

Non-profits are exempt from most state DNC laws,

but not all. Some states have specific requirements

that non-profits have to meet to qualify for the

exemption. For example, the Arkansas DNC law only

contains an exemption for a person calling on behalf

of a non-profit organization who receives no

compensation.

Frequently Asked Questions

States whose state DNC laws apply to calls soliciting

donations:

By charity: Alaska, Arkansas, and Oregon.

By professional fund raiser: Alaska, Arkansas, Indiana,

Louisiana, Nevada, North Dakota, Oregon, and Tennessee.

States whose DNC laws apply to calls for the sale of

goods or services:

By charity: Alaska, Arkansas, Florida, Idaho, Kansas,

Kentucky, Maine, New Jersey, New Mexico, Oregon, South

Dakota, Texas, and Wyoming.

By professional fund raiser: Alaska, Arkansas, California,

Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana,

Maine, Massachusetts, Mississippi, Missouri, Montana,

Nevada, New Jersey, New Mexico, North Dakota, Oregon,

South Dakota, Tennessee, Texas, and Wyoming.

Frequently Asked Questions Are calls by or on behalf of non-profit organizations exempt

from the federal prerecorded message bans for landlines?

FTC (TSR)

Calls by or on behalf of non-profit organizations for the sale of

goods or services – Yes

Calls by or on behalf of non-profit organizations to solicit

charitable donations – Yes

Calls by or on behalf of non profit organization or candidates for

political purposes only - Yes

FCC (TCPA)

Calls by or on behalf of non-profit organizations for the sale of

goods or services – Yes if by nonprofit, no if by for profit entity

calling on behalf of nonprofit

Calls by or on behalf of non-profit organizations to solicit

charitable donations – Yes if by nonprofit, no if by for profit entity

calling on behalf of nonprofit

Calls by or on behalf of non profit organization or candidates for

political purposes only - Yes

Frequently Asked Questions Are calls by or on behalf of non-profit organizations

exempt from state robocall/prerecorded message bans?

Calls by or on behalf of non-profit organizations for the sale of goods or services are exempt in: Alabama, Illinois, Maine, Massachusetts, and Wisconsin. The following states allow robocalls, but require the business to register or follow certain restrictions: Idaho, Nebraska, New Hampshire, New York, Oregon, Pennsylvania, South Dakota, and Texas.

Calls by or on behalf of non-profit organizations to solicit charitable donations are exempt (registration requirements and/or restrictions may still apply in some states) in all states except: Alaska, California, Indiana, Minnesota, Mississippi, New Jersey, North Carolina, North Dakota.

Calls by or on behalf of non profit organization or candidates for political purposes only are exempt (registration requirements and/or restrictions may still apply in some states) in all states except: Arkansas, California, Indiana, Minnesota, Mississippi, Montana, New Jersey, North Dakota, South Carolina, and Wyoming.

Frequently Asked Questions

Do charitable telefunders need

telemarketing licenses?

It depends. Many states (but not all)

exempt telemarketing calls made by or

on behalf of a non profit entity.

Keep in mind that many states have

separate licensing requirements for

business soliciting charitable

contributions.

Businesses should contact their legal

counsel about their specific situations.

TSR Amendments The following changes will go into effect on June 13, 2016:

Rules banning remotely created payment orders and checks, cash-to-cash money transfers, and cash reload mechanisms.

Changes that limit certain exemptions as they relate to the payment methods described above

All other changes are effective on February 12, 2016. These include:

Requirement that a description of the goods or services purchased be included in the call recording for certain transactions.

Examples given illustrating the types of burdens that deny or interfere with a consumer’s right to be placed on a seller’s or telemarketer’s entity-specific do-not-call list;

Clarification that a seller or telemarketer has to demonstrate that it has an existing business relationship with, or has received an express written agreement from, a consumer to be exempt from DNC requirements;

Limitation on the safe harbor for when the telemarketer does not get the information needed to place consumer on its internal DNC list.

Amendment to b2b exemption clarifying the business-to-business exemption only applies when you are trying to sell goods to the other business, not to individual employees at the business.

Emphasis given that sellers are prohibited from sharing the cost of the fees to access the DNC Registry.

Questions?

Eric Allen, Allen, Mitchell & Allen PLLC

AllenLawyer.com

801-930-1117

eric@allenlawyer.com

Ryan Thurman, Contact Center Compliance

DNC.com

866-DNC-LIST (362-5478) x 116

ryan@dnc.com