Contact Center Compliance Webinar 10 26 11 Direct From The Ftc And Fcc

Direct from the FTC and FCC:

Hear a Unique Perspective from Recent Keynote Presentations on Contact Center Regulations

Compliance Webinar

October 26, 2011

Joseph Sanscrainte

Law Office of

Joseph W. Sanscrainte

212-626-6934

[email protected]

Compliance Webinar

Ryan Thurman

Director of Sales & Marketing

866-362-5478 ext. 116

[email protected]

Agenda

How the FTC and FCC view liability

Summary of recent enforcement actions

What are the rules re: making political pre-recorded calls?

Do debt collectors need to worry about cell phone prohibitions?

What to expect if you face an investigation and what industries are under the most scrutiny

How to keep updated with compliance regulations

How the FTC and FCC consider industry comments

How the FTC and FCC are responding to new technologies/modernizations.

International Compliance Update

FTC Update with Lois Greisman from the Federal Trade CommissionAssociate Director Div. of Marketing PracticesBureau of Consumer Protection

Lois Greisman heads the Division of Marketing Practices in the FTC's Bureau of Consumer Protection. Under Ms. Greisman'smanagement, Marketing Practices leads the FTC's law enforcement initiatives tackling telemarketing fraud (including Do Not Call enforcement), business opportunity fraud, illegal spam, and Internet frauds, with particular focus on challenges posed by technologies and convergence issues.

� New Do Not Call List Coordinator

� Primary Goal: Protect consumers from fraud and privacy issues

� New staff report on privacy (“Privacy by Design”, simpler and ,pre streamlined data privacy around consumers data, recommended measures)

� Protect businesses with enforcing anti-trust regulations

� Enforcement mechanisms

� Civil enforcement� Shut down businesses� Freeze assets� Institute consumer redress� Assume operations of a company

FTC Update

� Current Fraud examples:

� Job scams

� Credit/Debt Negotiation and credit repair

� Homeowner relief

� Timeshare resale offers, Medical discount cards, Investments, Government Grants

� Recent enforcement summary

� Google Buzz

� Dish Network/Echostar

� 9/28: Reebok to Pay $25 Million in Customer Refunds To Settle FTC Charges of Deceptive Advertising of EasyTone and RunTone Shoes

� 10/4: At FTC’s Request, Court Shuts Down Deceptive Mortgage and Debt Relief Operation

� 10/13: FTC Charges Credit Repair Operators With Misleading Credit Bureaus and Charging Consumers Illegal Up-Front Fees

� 10/19: FTC Stops Nationwide Federal Jobs Scam-Defendants Who Sold Information Consumers Could Get for Free Settle FTC Charges

� 10/20: Court Finds Defendant in Contempt for Violating Prior Court Order That Prohibited Him from Making Credit Repair Pitches to Consumers

FTC Update

� FTC Consumer Complaint Call Center

� Handled 1.4 million complaints last year

� Total of 2.2 million complaints last fiscal year

� Still receiving the bulk of complaints against pre-recorded “robocalls”

� Separate complaint process now in effect for Robocalls

� 1st half of 2011: Number of complaints on Robocalls exceeds all of 2010 (800,000 Complaints)

� Asked the industry for help with Robocall issue

� FTC pursuing dialing platforms, resellers/brokers and uses of illegal robocall applications

� Overall historical enforcement

� FTC has brought 79 DNC cases with $40 million in fines

� Over $500 million in awards

� Electric Mobility Corporation Settlement 4/21/2011

Maker of Rascal Scooters to Pay $100,000 for Violating FTC’s Do Not Call RulesCalled Consumers on Registry Using Phone Numbers Gathered From Sweepstakes Entry Forms

The manufacturer of Rascal Scooters, used by disabled and senior consumers with limited mobility, will pay $100,000 to settle Federal Trade Commission charges that it illegally called millions of consumers who had chosen to avoid unwanted telemarketing calls by listing their phone numbers on the national Do Not Call Registry. The FTC alleges the firm illegally used phone numbers gathered from sweepstakes entry forms to contact consumers whose numbers are on the Registry.

The FTC’s complaint charges scooter manufacturer Electric Mobility Corporation and its owner Michael Flowers with making more than three million illegal sales calls since 2003 to consumers on the Do Not Call Registry who had entered the company’s “Win a Free Rascal” sweepstakes. According to the FTC, in small print under the part of the sweepstakes form provided for the entrant’s phone number, EMC reminded consumers to list their numbers so the company could contact them if they were “the next lucky winner.”

EMC encourages consumers to enter its sweepstakes through direct mailing, newspapers, and television advertisements. The FTC charged that its conduct violated both the FTC Act and the Do Not Call provisions of the Telemarketing Sales Rule.

The FTC’s Telemarketing Sales Rule allows a company to call a consumer on the Do Not Call Registry for up to 18 months if it has an “established business relationship” with the consumer and he or she has not asked the firm to stop calling. However, under the Rule, a company may not rely on a completed sweepstakes entry form to establish a business relationship with a consumer. In fact, the FTC consistently has said that simply obtaining a consumer’s phone number – as EMC did with its sweepstakes – does not establish a relationship that would exempt it from the Do Not Call rules.

FTC Update

� Feature Films for Families, Inc 5/9/2011

FTC Charges Utah Operation with Deceptive and Abusive TelemarketingDefendants Allegedly Made 16 Million Calls to Numbers on the Do Not Call Registry; Misrepresented How Funds Would Be Used

At the request of the Federal Trade Commission, the Department of Justice today filed a complaint that charges three Utah-based firms and their owner with waging deceptive and illegal telemarketing campaigns pitching movies and soliciting for donations, including calls to more than 16 million phone numbers on the National Do Not Call Registry.

The FTC charged that the companies and their owner, Forrest S. Baker III, committed multiple violations of the FTC Act and the Telemarketing Sales Rule, and deceived customers about where the proceeds from their purchases and their donations would go.

In addition, the complaint charges that the defendants violated the Telemarketing Sales Rule by:-calling consumers who have previously asked that the defendants stop calling them;-failing to provide the name of the telemarketer or seller making the call to Caller ID devices and, instead, providing names such as “CUSTOMER SVC,” “FAMILY VALUE CB” or “VELVETEEN”;-failing to orally identify the seller, the purpose of the call, and the nature of the goods or services when making telemarketing calls; and-abandoning calls to consumers by failing to connect consumers to live representatives when they answer the phone. In many cases, such abandoned calls lead to the recipients listening to “dead air” when they answer the call.

FTC National DNC Registry Data Book FY 2010

� 201 million numbers on the registry

� 1.6 million complaints

� Down from previous two years

� 40% of complaints are for prerecorded calls

2006 2007 2008 2009 2010

Entities who paid 6,824 6,242 4,618 3,923 3,383

5 or fewer area codes 58,816 59,337 46,559 40,406 34,206

Exempt entities 845 801 1,107 1,002 680

Jim Kohlenberger, Executive Director, Jobs for America• Worked in Clinton and Obama White Houses

• IT drove 85% of job growth in the 90’s

• US behind the curve on use of broadband – 100 million people without access to broadband

• The “plan”:

• Connect America through smart grids and infrastructure

• Obama has created a broadband strategy and the nation’s first “technology officer”

• FCC proposes $5 billion fund for broadband – goal is to reduce telecom costs, including VoIP

• Executive order to make 4G wireless available to 98% of Americans

• New investments in R&D – get back to 3% of GDP

• Change how government does business – more openness – make smarter use of technology

• Washington’s top priority is jobs, and telemarketing has created 4000 jobs a month for past two years

Julius Genachowski, Chairman, FCC

• FCC applauds Jobs4America’s goal of 100,000 new US jobs in the contact center industry via broadband

• Job creation and the telemarketing industry• Onshore call center jobs making more and more sense

• Home-based agents change the cost equation

• Fusion of email, chat, talk requires better quality agents

• Telephone service is “universal” – the same should apply to broadband• “Connect America” program – billions of $ aimed at making

broadband universal

• May require re-allocating spectrum from older uses

Julius Genachowski, Chairman, FCC (con’t)

• Challenges facing the US re: broadband usage

• Spectrum “crunch”

• 20 million people in US have no access

• 100 million do not use available broadband

• “Skills gap” – people lack skills to take advantage

• Information grid and proper deployment and adoption of technology is the gateway to better jobs and better living

Mitch Roth, General Counsel, ATA (Federal Update)

• CallerID issues – NobelBiz wins one for the industry

• FCC seeks comments regarding liability (DISH Network)

• Spike in complaints re: pre-recorded messages – FTC pledges to vigorously enforce TSR

• Pending pre-recorded ruling by FCC – ATA comments that non-sales calls should not require express written consent

• FCC considering requiring written consent for calls to cell phones (not just “express consent”)

• Obama Deficit Reduction Plan would amend TCPA to permit calls to cell phones to collect debts due the gov’t

• Terry bill would redefine FCC definition of autodialer as ONLY random/sequential dialing, includes EBR as prior express consent, and permits info-only calls to cell phones

� Charvat v. Echostar Satellite (US Ct of Appeals, 6th Circ.): Charvat received 30 calls from Echostar (which deliver DISH Network satellite TV). Charvat tracks calls to several companies: Dish TV Now, Marrick Dish Co., Marketing Guru, Inc., etc. – all retailers of DISH Network, and all independent contractors.

� US v. Dish Network (US Dist Ct, Central Dist of IL): USA, CA, IL, and OH sued Dish under TCPA alleging violations of DNC, abandoned calls, and prohibited pre-recorded calls.

Liability Under the TCPALiability Under the TCPA

� §§ 227(b)(3) and (b)(1)(B): allow a person to bring "an action" against an entity that "initiate[s]" a phone call using a pre-recorded device

� § 227(c)(5): allows "[a] person who has received more than one call by or on behalf of the same entity" to sue.

� Even though § 227(b) does not contain "on behalf of" language, do both provisions apply equally to calls placed by agents of the entity sued?

� Does § 227(c)(5) create liability for entities on whose behalf calls are made even when the calls are placed by independent contractors rather than by agents or employees?

� And does § 227(c)(5) create liability for entities on whose behalf calls are made even though the section is labeled only as a private right of action and even though individuals still must sue for violations of regulations?

Liability Under the TCPALiability Under the TCPA

FCC Seeks Comment On:

• 1) Under the TCPA, does a call placed by an entity that markets the seller’s goods or services qualify as a call made on behalf of, and initiated by, the seller, even if the seller does not make the telephone call (i.e., physically place the call)?

• 2) What should determine whether a telemarketing call is made “on behalf of” a seller, thus triggering liability for the seller under the TCPA? Should federal common law agency principles apply? What, if any, other principles could be used to define “on behalf of” liability for a seller under the TCPA?

• 3) Additionally, we solicit comments addressing the applicability of federal agency law and federal joint venture law to the TCPA liability questions presented herein.

Liability Under the TCPALiability Under the TCPA

Global Compliance Map: Do Not Call ListsGlobal Compliance Map: Do Not Call Lists

Canada

United States NetherlandsUnited Kingdom

Spain

Mexico

India

AustraliaArgentina (Buenos Aires only)

• Global Do Not Call Overview

• Canadian DNC Update

• International Privacy Update

• Mexico Data Protection Law

• Costa Rica Law

• India Privacy Rules

• French Data Breach Notification

• Singapore

• Resources

• IAPP, LinkedIn Groups, Google.

• California Privacy Update

International Compliance Update

Stay current

– New laws – don’t become the example!

– Compliance Guide

– Industry Newsletters

– LinkedIn Discussion Groups

Contact Center Compliance Officers Forum

– ftc.gov

– Industry Trade Groups (ATA, SOCAP, DMA)

Ryan Thurman

866-362-5478 ext. 116

[email protected]

Joseph Sanscrainte

212-626-6934

[email protected]

Contact Center Compliance Solutions

DNC Scrub

Training Master

Compliance Guide

Data Enhancement