Marketers Beware: FTC Narrows Scope of TSR’s EBR
The FTC has definitely given lead buyers much to think about when contracting with third parties to develop leads. First, they must ensure that their names are specifically included in all lead generation campaigns in order to take advantage of the inquiry EBR exemption to DNC scrubbing. Second, they should demand that lead generators provide them with sufficient proof of the lead in case of a challenge. Failing to follow this guidance can result in consumer complaints and lawsuits and quite possibly an unwelcome letter from the FTC.
Calling Current and Former Customers
But lead buyers are not the only ones impacted by the FTC’s reports. Companies that call current and former customers and rely on the purchase or transaction EBR to avoid scrubbing against the DNC registry are also on notice of changes. Whereas the TSR’s definition of an EBR is silent on the scope of the exemption, the biennial report introduces a context and consumer expectation qualifier, which can significantly impact an intended calling campaign. In discussing whether a consumer whose number is on the DNC registry has an expectation of receiving a call from a company from whom it purchased a product or service, the report states that “[m]any consumers, however, perceive telemarketing calls that fall within this exemption to be inconsistent with the Registry, because the consumers are unaware of the exception or are not aware that they have a relationship with the seller that falls within the definition of an established business relationship.”
The report continues, “Such perceptions by consumers are especially likely when the relationship between the consumer and the seller arises from a brief, one-time transaction, or when the seller identified in the telemarketing call and the seller with whom the consumer has a relationship are part of the same legal entity, but are perceived by consumers to be different because they use different names or are marketing different products.”
These statements are concerning, because the TSR rules do not speak to the context or consumer expectations arising out of a transaction, but merely allow companies to rely on an EBR to avoid scrubbing against the DNC registry. Companies must therefore consider these issues before commencing an outbound telemarketing campaign to current, former and prospective customers. As a threshold matter, the FTC advises companies to consider whether consumers would “likely be surprised by that call and find it inconsistent with having placed their telephone number on the national ‘do-not-call’ registry?” Companies should also consider whether the nature of the transaction would or would not create an expectation by consumers that they may be called, despite placing themselves on the DNC registry. In sum, perception is the new reality.
These developments are significant and need to be addressed by every company that calls current, former and prospective customers. Companies that fail to heed the FTC’s guidance when conducting their call campaigns run the risk of an unwanted and costly regulatory enforcement action and worse, follow-on consumer class actions.
Related story: 12 Steps to Successful Telemarketing Calls