“Do Not Call” rules

QUESTION:  Standard of Practice 16-2 of the REALTOR® Code of Ethics indicates that a “general telephone canvass” and a general mailing or distribution addressed to all prospects in a given geographical area is not precluded by Article 16’s marketing restrictions. I am considering asking the agents in my firm to conduct a “general telephone canvass” but wonder if I need to worry about any of the “Do Not Call” laws that restrict telemarketing activities.

ANSWER:  You absolutely do need to be concerned about “Do Not Call” laws. The North Carolina Real Estate Commission has emphasized compliance with those laws in both their Broker-in-Charge course materials and in their Real Estate Manual.

Federal and state “Do Not Call” laws apply to brokers whenever they attempt to promote their brokerage services via telephone. It is up to the owner of every real estate firm to decide whether to permit the firm’s agents to engage in cold-calling of potential prospects. If the decision is made to allow cold-calling, proper training is a must as the firm can be held civilly liable for any violations by its agents.

Starting in 1992, the Federal Communications Commission (FCC) and then the Federal Trade Commission (FTC) adopted rules regulating telemarketing. In 2003, the FTC established a national “Do Not Call” registry. That registry enables consumers to declare their desire NOT to be contacted at home by telephone for solicitations promoting goods or services. North Carolina enacted its own Do Not Call law effective October 1, 2003 (see NCGS §75-100 et seq.). It references the federal registry and closely tracks the FTC and FCC rules.

The FCC rules impact real estate licensees more than the FTC rules because the FCC applies to intrastate calls whereas the FTC rules apply only to interstate calls. FCC rules require firms making telemarketing calls to check the national “Do Not Call” registry at least once every 31 days to update its list of individuals who cannot be contacted. The registry can be accessed through a link on the FTC’s home page (www.ftc.gov). FCC rules limit the times when telemarketers can call a residential phone number (8am-9pm) and regulate the content of telephone solicitations (solicitors must provide their name, the name of their company, and a telephone number or address where the consumer may contact the entity).  FCC rules also require that firms create certain records relating to each telemarketing call made, and then maintain those call records for 24 months from the date of the call.

Penalties for violating Do Not Call laws can be substantial. Penalties under North Carolina’s statute are $500 for the first violation, $1000 for the second, and $5000 for every subsequent violation that occurs within two years of the first violation. It is possible to reduce those penalties if the solicitor can demonstrate that any violations were the result of certain specified mistakes.