Telemarketing guidebook for newspapers
How to make the most of this guide:
This guidebook has been created as a tool to educate media personnel about Indiana’s Telephone Privacy Law.
This guidebook is not designed to replace legal advice or serve as a defense in the event of a charge of violation of the Telephone Privacy Law; however, following the concepts discussed in this guidebook should serve anyone working for a newspaper who is attempting to comply with the law’s provisions.
Telephone Privacy Law’s intent
You remember the routine … your phone is ringing … again. Often times it was a telemarketer. Because so many Hoosiers asked for help in getting some of their privacy back, the Indiana General Assembly passed the Telephone Privacy Law (IC 24-4.7) during its 2001 session. The law created a state Telephone Privacy list or do-not-call list to allow Indiana citizens to help reduce these unwanted calls.
The Telephone Privacy Law prohibits a business from making telephone sales calls to a private residence whose telephone number is included on the current do-not-call list maintained by the state Attorney General. The law also requires anyone making a telephone sales call to any Indiana residential phone line to identify themselves by their first and last name and the name of the business on whose behalf the call is made.
The legislature did include a partial exemption from the restrictions for newspapers attempting to sell subscriptions by telephone. The exemption does not apply to calls made by newspapers to residential lines concerning advertising or other services provided by a newspaper.
The law requires the Attorney General to maintain the do-not-call list, investigate any complaints, and enforce the law when violations occur.
To what extent are newspapers exempt from the law?
The Hoosier State Press Association successfully lobbied legislators to consider the needs of the newspaper industry as HEA 1222 wound its way through the legislative process in 2001.
The law as passed contains two exceptions for newspapers:
- A telephone call soliciting the sale of a newspaper of general circulation, if an employee of the newspaper or a volunteer makes the call, is exempt from the entire statute [IC 24-4.7-1-1(6)].
- A newspaper subscription sale executed by a telephone call is not required to be reduced to writing and signed by the consumer to be a valid and enforceable contract [IC 24-4.7-4-4(a)(4)].
It is important to note that the above exemptions only apply in matters of sales of the newspaper or a subscription. By volunteers, the legislature anticipated situations where a newspaper may conduct a circulation drive in conjunction with a non-profit group (United Way, Boy Scouts, YMCA, etc.) where the calls are made by members of the non-profit entity with the newspaper making a donation to the non-profit for each subscription sold.
The exemption does not include circulation calls made by a telemarketing firm for a newspaper. And a call by the classified advertising department, for example, to see if a customer wants to extend his “car for sale” ad would not fall under the limited newspaper exemption and is subject to the provisions of the Telephone Privacy Law.
Enforcement and penalties
A telephone solicitor who fails to comply with any provisions of the Telephone Privacy Act commits a deceptive act. The Attorney General enforces the law.
The Attorney General may seek an injunction in Marion County circuit or superior courts to prevent any future violations. The Attorney General can ask for a civil penalty of up to $10,000 for the first violation and penalties of up to $25,000 for each subsequent violation. Each individual phone call in violation of the do-not-call list would be considered a separate violation.
The Attorney General can also ask the court to order the forfeiture of all money a violator obtained from consumers through violations of the Telephone Privacy Act; to rule contracts executed through the improper calls null and void; and to order restitution to the victims. The Attorney General can also ask the court to order the violator to reimburse the AG’s office for reasonable costs incurred in the investigation of the deceptive act and bringing the action to court, including attorney’s fees and court costs.
The Attorney General does have the flexibility to negotiate voluntary settlements with violators to avoid the necessity of taking every deceptive act to court.
The Statute of Limitations on any enforcement actions is two years from the date of occurrence.
How to comply
• When using employees or volunteers to make subscription sales calls: If using employees or volunteers to sell newspapers by telephone, your newspaper is not subject to the Telephone Privacy Act. Any residential lines, even those on the state’s do-not-call list, can be dialed without violating the law
• When using a telemarketing firm to make subscription sales calls: The telemarketing firm is subject to the Telephone Privacy Law. Make sure the firm has purchased a copy of the do-not-call list from the Attorney General’s office. The cost is $300 for four installments of the list. The list is updated every quarter, so the $300 should cover a year’s telemarketing calls.
Any calls made by the telemarketing firm on your behalf to someone on the do-not-call list would be considered a violation of the law. The Attorney General’s office has indicated it will look at individual circumstances to determine whether to hold the telemarketer or newspaper liable if violations occur.
Newspapers should consider including a provision in the contract with a telemarketing firm requiring the telemarketer to indemnify the newspaper for any actions brought by the Attorney General against the newspaper for violations caused by calls made by the telemarketer.
The telemarketer’s script for making calls must require the caller to immediately:
- Identify themselves by first and last name; and
- Inform the potential subscriber that the call is being made on behalf of the newspaper.
• When calling a customer who hasn’t paid for the subscription being received or residential customer who failed to pay for an ad that has run (also holds true for non-payment after subscription lapses): Calls made in conjunction with an existing debt or contract for which payment or performance has not been completed at the time of the call is exempt from the statute. Those calls can be made even if the customer’s phone line is on the do-not-call list.
• When making classified advertising follow-up calls to existing residential customers or residential customers who have run ads in the past: Regardless of whether the newspaper is calling to see if Tom wants his “car for sale” ad to run for an additional three weeks or whether Sally wants to run a “garage sale” ad again like she did last year, the Attorney General will consider those contacts telephone solicitation calls. If made to residents whose telephone lines are on the state do-not-call list, they would be considered violations of the law.
Newspapers can protect their ability to make follow-up calls by adjusting how they take the original ad from a customer. The ad-taking process should include a request for permission to contact the customer in the future and the answer should be documented for later reference. If the customer has made an “express request” to be contacted, then the call in response to that request is exempt from the Telephone Privacy Law provisions.
Note: Permission to call the customer in the future cannot be made a term of the sales contract. Permission has to have been given voluntarily.
As in other sales calls, the person making the follow-up call on a classified ad must immediately:
- Identify themselves by first and last name.
- Inform the potential customer that the call is being made on behalf of the newspaper.
Enforcing classified sales contracts made by phone solicitation
A sale made by telephone solicitation is not valid or enforceable unless:
- The contract is reduced to writing and signed by the customer;
- The contract includes name, address, and telephone number of the newspaper; total price of the contract and detailed description of goods or services being sold;
- Description of goods or services must match description used in the telephone solicitation.
- The contract includes in bold, conspicuous type immediately preceding the signature the words – “you are not obligated to pay any money unless you sign this contract and return it to the seller.
- The contract cannot exclude any terms made by the telephone solicitor to the consumer in connection with the transaction.
The above requirements only applies when the call is initiated by the newspaper, not when the customer calls the newspaper on his or her own volition.
Telephone sales and credit cards
If the newspaper sells a classified ad or some other product (other than the newspaper or a subscription) through telephone solicitation, the newspaper cannot submit a charge to the consumer’s credit card or initiate any electronic transfer of funds until it receives the signed contract described in the previous section.
An exception to this would include situations where there has been an “express request” by the consumer for the newspaper to call.
Another exception is where the transaction is made “under a television, radio, or print advertisement or a sample, brochure, or catalog of a merchant that contains:
- The name, address, and business telephone number of the merchant;
- A description of the goods or services being sold; and
- Limitations or restrictions that apply to the offer.
This restriction serves to encourage advertising campaigns that fit the above parameters when promoting the classified advertising section or other products. The above restriction on telephone solicitations could serve as another argument for selling newspaper display advertising to local merchants who depend on telephone sales and want to accept over-the-phone credit card payments. With the proper advertising program, the merchant can run the customer’s credit card without waiting for a signed contract.
Automatic dialing machines
Indiana has a separate statute concerning the use of automatic dialing machines (IC 24-5-14). While that statute contains a provision allowing the use of automatic dialing machines when a business has a current business relationship with the resident, the statute does not trump the state’s Telephone Privacy Act.
The state Attorney General’s office doesn’t view the use of an automatic dialing machine as an employee or volunteer for a newspaper. So calls with an automatic dialing machine to seek new subscriptions or renewals would be subject to the state’s do-not-call list provisions. Such calls to residents on the do-not-call list would be considered violations of the law.
If a telemarketer is making the calls for the newspaper, all of its calls are subject to the do-not-call list restrictions and automatic messages to people who are not current customers would have to be immediately preceded by a live operator before the electronic message could be played. The live operator would have to disclose the name of the newspaper making the call, the purpose of the message, what is being sold and whether the message will seek payment or commitment of funds for any service sold.
An automatic dialing machine can be used in a non-selling capacity. For example, it could be used to determine whether a new subscriber is receiving the newspaper.
Federal telemarketing regulations
Following is a brief description of federal telemarketing restrictions. The federal laws apply to any business that makes more than one interstate telemarketing call. The Newspaper Association of America has an excellent telemarketing guide on federal regulations available for members at www.naa.org.
Telephone Consumer Protection Act
The Federal Communications Commission enforces the Telephone Consumer Protection Act passed by Congress in 1991. The law attempts to protect the privacy of residential telephone subscribers in similar fashion to Indiana’s law. The law requires certain disclosures be made prior to payment, such as total costs and quantity and material conditions or restrictions. Records relating to advertising, scripts, etc., used in telemarketing must be maintained for two years; along with names and addresses of customers with the date and amount of goods or services purchased; and names and last know addresses of current and former employees who conduct or conducted telemarketing.
The FCC rules require companies to maintain a list of consumers who have requested not to be solicited by that company. If a newspaper’s telemarketing calls fall under this law, it is required to create and maintain it’s own do-not-call list of individuals who requested the newspaper to stop making telephone sales calls.
When a person asks to be placed on the newspaper’s do-not-call list, the name must stay on the list for 10 years. Telemarketing calls to residential phone lines can only be placed between 8 a.m. and 9 p.m. local time.
Violations of the FCC rules can lead to penalties of up to $500 per violation. A consumer can file a lawsuit if he/she receives at least two calls in violation of the law in a 12-month period. A successful complainant will receive the money ordered to be paid as penalties.
Telemarketing and Consumer Fraud Abuse Prevention Act
The Federal Trade Commission (FTC) enforces the Telemarketing and Consumer Fraud Abuse Prevention Act passed by Congress in 1994. The law attempts to halt telemarketing fraud across state lines. Newspapers making calls across state boundaries would fall under this law’s provisions.
The law’s Telemarketing Sales Rule states that if you receive payment information over the telephone the newspaper must have either the customer’s signed consent or tape-recorded oral authorization. There is an exemption if the customer initiates the call, for example, in response to an advertisement in the newspaper or direct mail campaign.
The FTC rules also contain a prohibition on telephone solicitation of consumers who object to telemarketing calls.
FTC penalties can range up to $10,000 per violation. The FTC or the state Attorney General may file a lawsuit. A consumer may only file suit if $50,000 or more in actual damages or value are alleged.