Only a few days ago, my colleague Elizabeth Patton posted about the Federal Trade Commission’s release of its annual Data Book outlining the most recent statistical data about uses of the National Do Not Call Registry, a national database maintained by the FTC listing the telephone numbers of individuals and families who have requested that telemarketers not contact them.

Today, the FTC followed that up by issuing its biennial report to Congress on the Registry. The FTC reports that many businesses and organizations have attempted to exploit exceptions to the Telemarketing Sales Rule (TSR), and that these organizations have occasionally faced stiff civil penalties as a result. As such, companies engaged in telemarketing tactics should take the time to understand the TSR and its exceptions and make sure their practices are in compliance.

Among other things, the TSR makes it illegal for a business or individual taking part in “telemarketing” — defined as “a plan, program, or campaign . . . to induce the purchase of goods or services or a charitable contribution” involving more than one interstate telephone call — to call any phone number listed in the Registry. There is an exception, however, for calls to consumers with whom the company has an “established business relationship.” This exception allows sellers and their telemarketers to call customers who have recently made purchases or made payments, and to return calls to prospective customers who have made inquiries, even if their telephone numbers are on the Registry.

To fall within the “established business relationship” exception, the call must be to a person with whom the seller has an existing relationship based on: (1) the consumer’s purchase, rental, or lease of the seller’s goods or services or a financial transaction between the consumer and seller, within the eighteen months immediately preceding the date of a telemarketing call; or (2) the consumer’s inquiry or application regarding a product or service offered by the seller, within the three months immediately preceding the date of a telemarketing call.

According to the FTC, businesses routinely abuse this exception by engaging in calls in which the seller identified in the telemarketing call and the seller with whom the consumer has a relationship are technically part of the same legal entity, but are perceived by consumers to be different because they use different names or market different products.

Whether calls by or on behalf of sellers who are affiliates or subsidiaries of an entity with which a consumer has an established business relationship fall within the exception depends on consumer expectations. In other words, the question is whether the consumer likely be surprised by the call and find it inconsistent with having placed their phone number on the Registry. The greater the similarity between the seller and the subsidiary or affiliate in the eyes of the consumer, the more likely it is that the call will fall within the established business relationship exception.

Another issue arises when businesses place telemarketing calls to consumers after acquiring the consumers’ telephone numbers from others — so-called “lead generators” — without screening the numbers to remove those listed on the Registry. Such calls generally do not fall within the established business relationship exception because, while consumers may have a relationship with the lead generator, they do not have an established business relationship with the seller who has purchased the leads. Thus, a single sales pitch can produce multiple illegal calls, generating one or more calls from both the lead generators and the telemarketer.

The report also clarifies that the submission of a sweepstakes entry form does not create an “established business relationship” between the consumer and the company administering the sweepstakes, and notes several enforcement actions that have been brought against companies for making illegal calls that relied upon sweepstake entry forms as a basis for making telemarketing calls.

Recent actions by the FTC indicate that businesses and other organizations that use or rely on telemarketing tactics would be well-advised to review their telemarketing practices and ensure they are in compliance with the TSR and related federal regulations.

Following up on my blog post related to the Federal Trade Commission’s (“FTC”) prohibition on illegal sales calls and robocalls, today the FTC issued its National Do Not Call Registry Data Book for Fiscal Year 2017.  Now in its ninth year, the 2017 fiscal year Data Book contains “statistical data about phone numbers on the Registry, telemarketers and sellers accessing phone numbers on the Registry, and complaints consumers submit to the FTC about telemarketers allegedly violating the Do Not Call rules.”  New this year, according to the FTC, is a breakdown of robocalls versus live calls, information about the topic of those calls as reported by consumers, and a state-by-state analysis of consumer complaints.

In its press release issued today, the FTC reported that the Registry now contains over 229 million phone numbers and that there were over 7 million consumer complaints about unwanted telemarketing calls in 2017.  Of those, over 4.5 million were complaints about robocalls, which is a marked increase from the prior year.  Notably, the most frequent topic that consumers identified when submitting a robocall complaint was “Reducing Debt,” which accounted for over 700,000 of the complaints received in 2017.

As a reminder, companies should make sure to follow proper procedures when making sales calls, particularly pre-recorded sales calls, to consumers.

The Federal Trade Commission (“FTC”) operates a single National Do Not Call Registry at for both personal land lines and cell phones.  Although the FTC notes that the Federal Communications Commission (“FCC”) regulations prohibit telemarketers from utilizing automated dialers to call cell phone numbers without a consumer’s prior consent, the FTC allows consumers to “register” cell phone numbers (in addition to land line numbers) on the Registry in order to notify telemarketers that they don’t want to receive unsolicited telemarketing calls.  Once a consumer registers a particular number, it will stay on the Registry until the consumer cancels the registration or discontinues service for that number.

If a consumer receives an unwanted sales call after more than 31 days have passed since placing a number on the Registry, the FTC encourages reporting that call.  However, the FTC notes that the Registry only prohibit sales calls, meaning that companies may still make certain calls like political calls, charitable calls, debt collection calls, informational calls, and telephone survey calls.  In addition, companies may make a sales call to a consumer if they have recently done business with the consumer or received written permission from the consumer.

In light of developing technology, the FTC has seen an increase in the last several years of illegal sales calls, particularly calls with pre-recorded messages and fake caller ID information known as “robocalls.”  The FTC prohibits robocalls that promote the sale of any good or service.  However, the FTC notes that certain pre-recorded messages are permitted — e.g. purely informational calls, political calls, calls from certain health care providers, calls related to collecting a debt, and calls made by banks, telephone carriers, and charities.

To combat illegal sales calls and robocalls, the FTC reports that it has sued hundreds of companies/individuals and obtained over a billion dollars, is coordinating with law enforcement and industry groups, and is pursuing the development of technology-based solutions.  According to the FTC, companies that violate the Registry or conduct an illegal robocall may be fined up to $40,654 per call.  Thus, companies should always make sure to follow proper procedures when making sales calls, particularly pre-recorded sales calls, to consumers.