Do Not Call Compliance Is An Enterprise-Wide Issue
Why Both Captive and Independent Agents Must Comply

The creation of the National Do Not Call Registry and the implementation of the amended Telemarketing Sales Rules and Telemarketing Consumer Protection Act have made insurance and financial services companies take new actions to bring their companies into compliance with these laws. Since last summer’s implementation of these laws, it has become clear that, in the view of the FTC and FCC, the McCarran-Ferguson Act would not stand in the way of federal enforcement against insurance companies.

The Federal Communication Commissions (FCC) has stated, “The McCarran-Ferguson Act does not operate to exempt insurance companies wholesale from liability under the TCPA. It applies only when their activities constitute the ‘business of insurance’, the state has enacted laws ‘for the purpose of regulating’ the business of insurance, and the TCPA would ‘impair, invalidate, or supercede’ such state laws.”

“McCarran-Ferguson applies only to federal statutes that ‘invalidate, impair, or supercede’ state insurance regulation. Duplication of state law does not “invalidate, impair or supercede.” Based on this statement, it seems clear that the Federal telemarketing laws will apply to insurance and financial services companies and those agents who place calls on their behalf.

Faced with the reality of the need to comply, most companies with captive agents and internal outbound call centers moved quickly to take action. The liability for non-compliance is straightforward in the case of company employees violating the rules set forth by the federal and state governments.

However, in the case of independent agent networks, questions remain. These questions stem from the fact that independent agents typically market on behalf of multiple companies. Some companies blindly hope that a violation by an independent agent calling on their behalf can’t come back to haunt them. This is incorrect.

The Federal laws clearly spell out the need to bring all marketing vehicles, including independent agents, into compliance. The Federal Trade Commission (FTC) states that, “In order to avail themselves of the “safe harbor” provisions, Sellers and Telemarketers must be able to demonstrate that, as part of ordinary business practices, they monitor and enforce compliance with the written procedures required by §310.4(b)(5)(i)”

In the context of insurance:

Enforcement of these laws is taking place. The state of Pennsylvania fined an insurer and its independent agency that made calls to consumers whose phone numbers appeared on the state’s Do Not Call list. The state found that, although there were sufficient procedures in place within the insurer’s own operations, they had failed to monitor and enforce compliance at their independent agency.

So, what do companies need to do to comply? Let’s review.

Each Seller (i.e. insurer) must monitor and enforce compliance of captive and independent agents to protect against violations that can result from human or systems errors.

First you must ensure that agents do not place calls to any phone number listed on the National Do Not Call Registry. Any sales calls made to consumers listed on this registry may be subject to a fine of up to $11,000 for each call placed.

However, there are other rules that place requirements on individuals who make outbound sales calls. Specifically, anyone placing an unsolicited sales call to a consumer at a residential phone number must:

• Purchase and access the National and relevant state Do-Not-Call lists and refrain from calling any consumer phone numbers that appear on these lists;
• Record the phone number of any consumer who requests to be placed on your company-specific Do-Not-Call list, and make sure no one else in the company calls that number for 5 years;
• Maintain a written company Do-Not-Call policy and promptly provide the policy to any consumer who may request it;
• Train anyone placing a call on your behalf on the Do-Not-Call rules and your company’s policy toward them;Respect the time restrictions for placing calls (varies by state);
• Keep records of all activities taken to comply with the rules.

As stated above, companies that monitor and enforce compliance with these rules can seek a safe harbor defense to a violation if the violation is the result of technical or human error. If you comply and thoroughly document your actions, you will have the opportunity to seek safe harbor from an unwarranted Do Not Call claim.

Understanding these laws and how they affect both your captive and independent agents is essential. Implementing Do Not Call compliance within both company and independent agent operations helps you maintain your company’s reputation as well as avoid potential damaging fines.

About the author
Scott Frey is the President and CEO of PossibleNOW and is one of the company’s original founders. Mr. Frey plays a critical role in the strategic vision of the company as well as in the technical development of the company’s products. Prior to founding PossibleNOW, Mr. Frey was the Executive Vice President of Sales and Marketing for CCS Technologies, a network solutions consulting company. Mr. Frey’s career in high technology marketing and product and solution development spans 15 years, and is highlighted by successful achievement and leadership.