Cold Calling Laws & Regulations
Cold calling and the law
Is cold calling by phone illegal? Many businesses today view cold calling as one of the indispensable evils in the highly active, constantly-moving world. In fact, the majority of modern sales strategies require human interaction which can only be obtained through the phone, video chat, or in person.
When trust is created by one phone call or personal interaction at a given time, that means that your entire income flow could be contingent on the effectiveness of your B2B cold-calling initiatives, and it’s vital to make sure you’re not putting it at risk in violation of the law.
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Is cold calling by phone illegal?
Is cold calling by phone illegal? To answer this question, cold calling isn’t prohibited. However, cold calling has evolved significantly since companies began making use of it as a marketing strategy in the 60s. Making phone calls late at night, and an increase in scams involving money have made cold calling an annoying experience for consumers. In the early 2000s it was the time that the US government started regulating cold-calling.
The new rules mean that cold calling is a lot more regulated now than it was previously. Companies must adhere to rules regarding who they contact as well as how they market and how they answer the phone. However, cold calling is legal and, if you use the right strategies it can be a successful sales tool to have in your arsenal.
What is Cold Calling?
The cold calling procedure of calling a potential customer or customer who hasn’t expressed any interest previously in speaking to an agent for customer service or making a purchase. Contact information for cold-calling is typically collected by sales and marketing professionals using non-traditional methods, such as locating and assembling data from public information.
The effectiveness of cold calls is frequently questioned because it is time-consuming and negative reactions are more common than those that are successful. However, the advantages of cold-calling include instant feedback, personal connections and a less chance of being ignored, and accessibility. For smaller companies it’s an affordable method of educating prospective customers and building relationships.
A cold call is not to be mistaken for a warm call one that is initiated by a prospect who has asked a question, accessed the website, or downloaded online content.
What are the regulations for cold calling?
It was formulated and applied in the Federal Trade Commission (FTC) The Telemarketing Sales Rule (TSR) is a set of rules which define how businesses can use telemarketing to connect with customers.
The primary goal for the TSR is to shield customers from annoying telephone calls made at home on their personal phones. The TSR also empowers specific police agencies to fight fraudulent telemarketing and scams and also gives consumers greater privacy protections from fraudulent phone callers.
The TSR also includes the requirement for disclosure, including prohibited fraud, call-time windows transmissions of caller ID outbound call prohibitions limitations on billing, upsell requirements Pre-recorded messages restrictions, and the obligation of accurate record keeping for companies that utilize automated calls.
However, the majority of B2B cold-calling is not subject to the TSR which means that, generally speaking, B2B cold calls are legal. There are a few exceptions, however.
TSR Regulations
When calling customers cold companies are required to follow strict rules and regulations. In actual fact, TSR contains various regulations that companies must adhere to in order to ensure conformity.
| This includes things such as: |
| Call-time windows |
| Disclosure requirements |
| Caller ID transmissions |
| Prohibited misrepresentations |
| Billing restrictions |
| Pre-recorded message restrictions |
| Upsell requirements |
This list only scratches the surface of all the subjects covered by TSR.
State Laws Apply as Well
TSR and TCPA safeguard the consumers from unwelcome and illegal cold calls on a federal level. However, a few states have their own rules which cover cold and telemarketing calls.
If you’re calling across states there’s a chance you’re in double danger. You’re not only violating laws in your state, but the laws of the state of the receiver as well. Local jurisdiction rules may apply. Make sure you thoroughly study the laws of each state to avoid the middle of a legal nightmare.
Foundational Cold Calling Rules
There are numerous legal regulations and rules in relation to cold-calling. While your company must be knowledgeable of each legal or regulatory issue that applies to your telemarketing efforts, there are some basic rules that every cold calling professional should keep in mind.
You must establish your identity first: It is essential to establish your identity before you start before you can begin the sales message, be sure that all cold-call scripts start with a brief introduction. Legal cold calls should begin with your name and the reason you’re calling. In the initial two minutes, the caller must provide:
- Name
- Company they’re representing
- Purpose of their call
- Phone number and/or address if requested
Cold calling hours: Hours for cold calling Legal cold calls should be made only between 8 AM to 9 PM 7 days a week. But, this is only applicable if the recipient is not a current client or client. The timeframe can also be removed if the customer has informed the caller that they may call them at any time.
Be aware of do not call lists: Security firms and other types of firms, need to keep an active Do not contact (DNC) listing. If a consumer chooses to join an DNC cold-callers must be respectful of their wishes. If they call a person who is already on the DNC , the DNC is a valid reason to submit a formal complaint to the company and regulators, the state and the Securities and Exchange Commission (SEC).
Never collect funds over the phone: In these days of scams on the phone, consumers must be extremely cautious when sharing financial details over the telephone. If a cold call results in the theft of money from the client’s (call the recipient’s) banking account a written authorization is required.
But, the majority of customers aren’t willing to reveal their bank details when they call. The public has come to expect that trustworthy companies will have more secure methods of obtaining money.
Honesty is expected: The SEC requires that every cold caller is honest. There’s a vast distinction between deceitful marketing and honest marketing, particularly when it comes with cold callers. Always be honest with the people you call.
The National Do Not Call Registry
The National Do Not Call Registry was developed to offer consumers the option of deciding whether or not they wish to be contacted by companies that sell telemarketing. The registry is applicable to area codes across all 50 states as well as in the District of Columbia, and U.S. territories.
Calls not covered by the registry are those from:
- Charities
- Political organizations
- Telephone surveyors
- Companies that have an existing business relationship with a consumer
It is illegal for telemarketers to call any number that is listed on the National Do Not Call Registry. Sellers and companies must register on this registry, and then pay the necessary charges before calling. Violators are liable to fines of up to $43,792 per each offense.
B2C and B2B Cold Calling Are Different
In accordance with the TSR A B2B cold call is permitted when the call is made from one company to another. If however, the call is directed on behalf of a consumer at their business location the call will not be excluded from the TSR and is actually a violation of the law.
This is to stop the telemarketers who seek out easy ways to get around the TSR. This also means that B2B calls can’t be converted into B2B calls and cannot be transformed into B2C calls when the “business” states that they’re not interested in the product or service that is being provided. In these cases, the standard TSR regulations apply including compliance with do not-call lists, the proper time frames and other regulations.
In the B2B aspect of things, this is the point where FCC’s wireless dialing rules kick in. As per the Telephone Consumer Protection Act (TCPA) the wireless number is not able to be dialed using a phone dialing system that is automated without prior written consent. Since you don’t know whether the number on your phone list is a cell phone or office number, or even an office phone that is redirected to a mobile phone, you should be careful not to take the risk.
Frequently Asked Questions
Is telemarketing legal in the US?
While telemarketing is a serious public nuisance, and as such, the Telephone Consumer Protection Act (TCPA) was adopted in 1991 to deal with the increasing privacy infringement they caused in the eyes of U.S. citizenry, all telemarketing is not considered to be illegal. There are strict rules which businesses must follow to remain within the legal boundaries However, there are some exceptions.
Is it illegal for telemarketers to call your cell phone?
Do you realize that it’s illegal for telemarketers to call the number of your cell phone? The Federal Communications Commission (FCC) has rules in place to regulate the telemarketing industry. The FCC prohibits companies from using automated dialing devices to contact phones, when it is costing individuals money to get the messages.
Because the majority of telemarketers employ these automated dialing capabilities many of these calls are illegal. It’s acceptable for companies to dial mobile phone numbers manually however this is extremely labor-intensive and time-consuming. The majority of companies don’t have the capacity to perform this.
Is cold calling illegal in US?
Perhaps irritating and frustrating for some customers However, cold calls are legal. But there are strict rules that define when a firm is allowed to contact an individual.
