Several different kinds of representations trigger state telemarketing registration requirements, for inbound campaigns. As is the case in all aspects of telemarketing law, awareness of registration requirements is key in staying compliant prior to beginning the campaign and avoiding legal action which can result in fines and penalties for failure to register.
Just when you think your telemarketing company complies with state telemarketing registration laws regarding your outbound calling campaigns, you might want to look a little further and ask the same questions in regard to inbound campaigns.
While it is seemingly common knowledge that several states require registration for telemarketers engaged in outbound campaigns, some states’ requirements can apply to inbound campaigns as well.1
These laws are separate and distinct from federal and state “do-not-call” list laws. This article will briefly touch on the applicability of state “do-not-call” lists to inbound telemarketing calls, but for the mean time this discussion will be limited to state registration requirements.
Inbound telemarketing campaigns vary from receiving calls from consumers inquiring about existing accounts or to inquiries from consumers who have received an advertisement in the mail for the sale of a good or service inviting a response.
State registration laws are not uniform when it comes to the type of behavior which triggers registration requirements. A telemarketing campaign may be permitted in one state without registration or licensure, while in another that same campaign may be subject to certain application, fee, and bonding requirements. Other states’ laws may not require telemarketing registration at all for the same activity.
Of those states that do require telemarketing registration, the most common trigger for registration is that the telemarketer “initiate” or “make” a telephone solicitation call to a consumer.2
In comparison, Montana requires registration if a telemarketer merely “receives” telephone calls from a consumer.3
In order to determine whether a telemarketer must be registered to conduct a certain campaign, the first step is to determine if there are any representations made which trigger any state requirements.
Some states, such as Florida, require registration when “a telephone response is invited and the salesperson intends to complete a sale during the telephone call.” 4
Another common trigger for registration is when a telemarketer uses a free offer to induce consumers to call. In Washington, for example, telemarketers making commercial telephone solicitations must register. “Commercial telephone solicitation” is defined as
a communication with a person where a free gift, award, or prize is offered to a purchaser who has not previously purchased from the person initiating the communication; a telephone call response is invited; and the salesperson intends to complete a sale or enter into an agreement to purchase during the course of the telephone call . . . 5
These are just a few examples of the different types of scripts which may trigger state telemarketing registration requirements.
In general, state “do-not-call” list laws do not apply to inbound telemarketing calls and the majority of those states with such laws exempt calls made in response to a consumer’s express request.6 These exemptions would apply to the situation where a telemarketer cannot answer every call it receives from inquiring consumers. Nevertheless, before a telemarketer returns consumer calls inquiring about its goods or services, it is recommended that the telemarketer review the applicable state’s “do-not-call” law.
Finally, a situation can arise where a telemarketer attempts an “upsell” during a telephone call initiated by a consumer.7 The Federal Trade Commission has stated that it “does not intend for upselling to be subject to the ‘do-not-call’ requirements . . . [of the Telemarketing Sales Rule].”8
It remains uncertain whether upselling is subject to state “do-not-call” laws.
In conclusion, several different kinds of representations trigger state telemarketing registration requirements, for inbound campaigns. As is the case in all aspects of telemarketing law, awareness of registration requirements is key in staying compliant prior to beginning the campaign and avoiding legal action which can result in fines and penalties for failure to register.
1 Twenty-seven states impose some kind of registration requirement on inbound telemarketing calls.
2 See, for example, Miss. Stat. § 77-3-601, defining “telephone sales call” as “a call made by a telephone solicitor to a consumer for the purpose of soliciting a sale of any consumer goods or services …” [emphasis added]
3 See, Mont. Code § 30-14-1403(11).
4 See, for example, Fla. Stat. § 501.603(1).
5 See, for example, Wash. Rev. Code § 19.158.020(2)(B).
6 See, for example, Alaska, which exempts from its “do-not-call” requirements, “calls made in response to a request or inquiry by the called customer or communication made during a call made by the customer.” Alaska Stat. § 45.50.475(g)(4)(B)(i).
7 “Upselling” is defined in the Telemarketing Sales Rule as “soliciting the purchase of goods or services following an initial transaction during a single telephone call.” 16 C.F.R. § 310.2(dd).
8 68 Fed. Reg. 4580, 4596 (2003).