The FTC’S National Do Not Call Registry
On July 3, 2003, the Federal Communications Commission (“FCC”) amended the Telemarketing Sales Rule (“TSR”), to create the National Do Not Call Registry (the “Registry”). The Registry makes it easier for consumers to stop certain types of telemarketing calls. Franchisors and franchisees must understand these requirements because the Registry rules apply to telemarketing solicitations by both franchisors of prospective franchisees and franchisees to customers or prospective customers.
Starting in July of 2003, consumers may either register their telephone numbers online (www.donotcall.gov) or by telephone (1-888-382-1222). Registration is simple and free, and once a number is registered, it will stay on the Registry for five years. After five years, the consumer can renew the registration.
The Federal Trade Commission (“FTC”) will begin enforcing the Registry on October 1, 2003 and all consumers who registered by August 31, 2002 will appear as of October 1 on the Registry. If a consumer registers after August 31, 2003, his/her telephone number will appear within 3 months after registration.
What Telemarketing Calls Are Not Covered by the TSR:
- Solicitations for charitable contributions.
- The sale of franchises subject to the FTC Rule is exempt from most of the requirements of the TSR, but not from the requirements of the Registry.
- Existing business relationships – organizations with which a consumer has an established business relationship – can call the consumer for up to 18 months after the last purchase, or companies to whom a consumer has made an inquiry or submitted an application can call the consumer for three months after the inquiry or application, even if the consumer has registered his/her telephone number on the Registry. However, if a consumer asks a company not to call him/her, the company must honor this request regardless of the “existing business relationship.”
Effect on Franchisor’s Telemarketing Efforts with Prospective Franchisees:
Although sales of franchises are generally exempt from the requirements of the TSR, franchise sales activities are not exempt from the requirements of the Registry. However, if a prospective franchisee has made an inquiry to a franchise company or completed a franchise application, a franchisor can continue its telemarketing efforts for a period of three months after the inquiry or date of application, even if the prospect is on the Registry. If during the call the prospect asks not to be called, the franchisor must immediately honor the request and delete the prospect’s telephone number from its telemarketing lists.
Effect on Franchisee’s Telemarketing Efforts with Customers:
The TSR clearly applies to a franchisee’s telemarketing calls to customers or prospective customers. Before October 1, 2003, franchisors should instruct their franchisees to obtain a copy of the Registry before engaging in any telemarketing. Beginning on October 1, the FTC will start enforcing violations. Franchisors should instruct their franchisees to update their “do not call” lists every 3 months. Franchisors should make clear to franchisees that compliance with the Registry is the franchisee’s responsibility – and make sure that their franchisees are aware that companies that fail to comply can be fined up to $11,000 for each call placed to a phone number that is on the “do not call” Registry.
[PRINTER FRIENDLY VERSION]
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