"Do Not Call" Alert
NAR has become aware of an individual threatening to bring claims against real estate brokerages for violating the federal “do not call” laws. The caller has used this method against other industries and has now focused his efforts on real estate brokerages. The caller is an individual whom the brokerage has never contacted and probably never had any intention of contacting.
The caller’s method works in the following way. First, he contacts the real estate brokerage and asks that his phone number be placed on the company’s internal “do not call” list. He also requests that the brokerage mail him a copy of the company’s policy for maintaining its internal “do not call” list within five days. If the caller does not receive the brokerage’s “do not call policy” within five days, he will threaten to file a lawsuit against the brokerage in Minnesota state court. To avoid the lawsuit, the caller offers the brokerage the opportunity to settle the matter for around $5,000. The caller is not a lawyer.

Legal Requirements
The caller’s method is not without legal support. The Federal Communication Commission's (“FCC”) regulations, enacted pursuant to the Telephone Consumer Protection Act of 1991 (“TCPA”), state that those who engage in "any telephone solicitation to a residential telephone subscriber" must also have a "written policy, available upon demand, for maintaining a do not call list"- i.e., its company-specific do not call policy, not necessarily its policy for complying with the “Do Not Call Registry” (although policy could include this information as well). The caller also relies on a 1996 FCC letter which states "even where a company does not solicit a particular consumer, we find nothing in our rules that limits a company's duty to disclose its policy if it does engage in telephone solicitation. Additionally, we believe that failure to provide a do not call policy is a prohibited act under the TCPA." Therefore, if the brokerage is engaged in any telemarketing, it must have a “do not call” policy which must be made available to send to those who request it from the brokerage, even if the brokerage has never contacted the consumer.
The caller’s five day time frame demand is not supported by the TCPA regulations or FCC correspondence. Instead, the only existing guidance from the FCC states that the brokerage must send its policy in response to a request within a “reasonable amount of time following the consumer's request". In addition, FCC rules give a company thirty days to add a consumer’s name to the company’s do not call list, further demonstrating that a five day turnaround time is likely unreasonable. Nevertheless, the faster you send the policy in response to a request, the better your chances may be of avoiding a lawsuit.

Summary
A real estate brokerage’s best defense against claims like those described above is for the brokerage to be prepared to properly respond to these calls. The brokerage should have a written do-not-call policy available upon request; needs to educate its salespeople to respond to these requests by promptly transmitting the policy to the requestors; and should make sure salespeople document the transmission of the policy to the requestor. For those who do not have a do not call policy, a model policy is attached below. Note a more complete policy detailing your company’s compliance with the federal “Do Not Call Registry” is recommended, but not required.

Click HERE for a sample policy available for download.

Background on the Do Not Call Policy:

Do Not Call, Fax Rules to Affect REALTORS®, Local Board
by Rick Zechini, NCAR Director of Regulatory Affairs
Recent legislative and regulatory actions at the state and federal levels regarding telemarketing and faxing will affect the ability of REALTORS® and local boards to market their services. While it remains to be seen how these recent changes will be harmonized and whether there will be further changes, it is important for REALTORS® and local board leaders to understand the restrictions applicable to these types of business telecommunications.
Late last year, the Federal Trade Commission amended the Telemarketing Sales Rule by establishing a national Do Not Call Registry. The registry is a database that contains the telephone numbers of people who do not want to receive telephone sales solicitations. Individuals can register by telephone or the Internet. On October 1, telemarketers must begin consulting the registry to make sure that they do not call any of the telephone numbers listed, and starting January 29, 2004, telemarketers must transmit their telephone number and, if possible, their name to the recipient’s caller ID service.
Although the prior rule provided that calls made to arrange a "face-to-face" meeting with the potential customer were not subject to regulation, which was an exemption that the National Association of REALTORS® fought for on behalf of the real estate industry, the FTC removed this exemption from the new rule. It is important to point out that the FTC rules only apply to interstate calls (i.e., calls made from one state to another).
The public has responded favorably to the registry, as more than 28 million people have registered their telephone numbers with the FTC since registration began on June 27.
During the 2003 session of the N.C. General Assembly, Sen. Scott Thomas (D - Craven) introduced Senate Bill 872 (Unwanted Telephone Solicitations), which was intended to reduce the amount of telemarketing calls, including faxes, made within the state. In large part this legislation was designed to apply the telemarketing rules adopted by the FTC to intrastate calls (i.e., calls made within the state). NCAR successfully lobbied for amendments to this legislation that will protect REALTORS® from unnecessary and burdensome requirements.
The amended bill was enacted by the General Assembly and provides that those who make calls to arrange a "face-to-face" meeting with the potential customer, small businesses that make only a few telephone solicitations and those who make calls pursuant to an existing business relationship are not required to consult the federal Do Not Call Registry. In addition, businesses that make these types of calls are not required to comply with certain training requirements, recordkeeping provisions and federal regulations.
While the N.C. legislation was being considered, Congress directed the Federal Communications Commission to adopt rules covering those industries the FTC lacks jurisdiction over (for example, the airline, banking, telephone and insurance industries) in a manner that would "maximize consistency with the FTC rules." Much to the shock of the business community, the FCC applied the requirement to consult the Do Not Call Registry to intrastate calls in adopting its rules on June 26.
These rules supercede all less restrictive state Do Not Call laws, thus undermining the efforts of NCAR and other state REALTOR® associations to obtain legitimate exemptions under state law. However, the hard-earned exemptions under the state legislation are still important in the event that the federal rules are scaled back (as discussed below) or if state law were to become more stringent than the federal rules in the future.
To make matters worse, effective August 25, the FCC rules also require any person or entity sending an "unsolicited advertisement" by fax to first obtain the signed, written consent of the recipient. (An "unsolicited advertisement" is defined as "any material advertising the commercial availability or quality of any property, good, or service, which is transmitted to any person without that person’s prior express invitation or permission.") Previously, the FCC determined that an existing business relationship was sufficient to satisfy the consent requirement. However, the FCC reversed this interpretation in adopting the new rules.
This change will not only affect REALTORS®, but also will restrict the ability of local boards to communicate with members, vendors and sponsors. For example, local boards will have to obtain signed, written consent in order to send faxes to its members regarding dues renewal and any meetings or seminars for which there is a fee charged.
The final effect of these federal regulations is still uncertain, as both agencies’ rules will be subject to administrative and legal challenges. The National Association of REALTORS® has formally communicated its concerns to the FCC, and NAR staff met with FCC officials to seek a better understanding of the new rules and to provide feedback. NAR has requested reconsideration and clarification of the FCC rules through the administrative process and has asked for a delay in the effective date of the unsolicited fax provisions if those provisions are not removed from the rules. There are at least two pending lawsuits challenging the FTC’s rules and there will likely be many petitions submitted to both agencies for clarification or reconsideration of the rules. However, both agencies’ rules will remain in effect pending administrative and legal review.
NCAR remains actively involved in resolving the issues associated with the recent regulatory and legislative actions regarding telemarketing and faxing and will continue to keep you apprised of any new developments.

If you have any questions, please contact NCAR legislative or legal staff at (800) 443-9956.