When the law says 'Do Not Call': This is the first in a three-part series summarizing what you need to know about compliance with federal legislation concerning marketing by telephone, facsimile machine or e-mail.

• Author: Becker, Kristine M.
• Position: Fundamentals: Telephone and E-Mail Compliance

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These days it's faster and cheaper for bank marketers to communicate with customers and prospective customer using telephones, facsimile machines and e-mail--rather than direct mail, Unfortunately, from a compliance point of view. it's also riskier. If your financial institution employs telephone. fax or e-mail marketing, you need to be aware of three federal laws:

* The National Do-Not-Call Act.

* The Junk Fax Prevention Act.

* The CAN-SPAM Act.

Ignoring these laws could subject your institution to lawsuits and fines.

Let's look at the National Do-Not-Call Act. which created the National Do-Not-Call Registry in 2003. The registry is enforced through a joint effort of the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). Although the FTC is the primary agency that enforces the registry, the FCC is the agency that has jurisdiction over banks. The purpose of the registry is to allow consumers to register their residential or mobile telephone numbers in a central database if they do not wish to receive advertising calls from businesses. As a result, companies must now subscribe to the registry and scrub their calling lists against the numbers contained in that database before making a telephone call for the purpose of inducing a consumer to purchase, rent or invest in property, goods or services.

There are a few exceptions to this rule, however. Calls that are not made for the purpose of soliciting goods or services are exempt, as are all calls made by political organizations, tax-exempt entities and telephone surveyors. Telephone calls to persons with whom companies have personal relationships (such as family members, friends or acquaintances) are also exempt. With a few exceptions, most telephone calls to businesses are exempt. In addition, if a company has an "established business relationship" (EBR) with a consumer or has obtained the signed written consent of a consumer authorizing such calls, the company is allowed to call that consumer.

What is an EBR?

An EBR means that the consumer has made a purchase or conducted another transaction with a company in the past 18 months or has made an inquiry or application regarding the company's products or services in the past three months. If a financial services or other type of company can demonstrate that it has an EBR with a consumer, the company may call the consumer even if the consumer's telephone number appears on the registry, at least...