The National Do Not Call Registry is now in effect. This registry is an attempt by the federal government to allow private citizens an opportunity to curb unwanted telemarketing solicitations.

Unfortunately, REALTORS® fall under the telemarketing definitions set forth by this registry. Despite the best efforts of the Michigan Association of REALTORS®, who secured an exemption for REALTORS® with the statewide Do Not Call Registry, the National Do Not Call Registry is now the law and REALTORS® must abide by its ruling.

To make members more aware, MAR public policy and legal department has put together this comprehensive compliance guide for REALTORS®. If there are any questions beyond these, REALTORS® should call the MAR Legal Hotline at 800.522.2820.

The Federal Communications Commission’s new rules (the “FCC Rules”) cover telephone solicitations made for the purpose of encouraging the purchase or rental of property, goods or services.

The FCC Rules do not cover calls made to someone with that person’s express permission or with whom the caller has a “prior business relationship.”

“Prior business relationship” requires a transaction within the last eighteen (18) months or an inquiry within the last three (3) months. Remember that someone can terminate a “prior business relationship” simply by asking the REALTOR® not to call again.

The information in this compliance guide is to identify the types of REALTOR® calls that may be made WITHOUT consulting the National Do Not Call Registry. REALTORS® should keep in mind that because these rules are new and there is no case law and little FCC guidance on specific issues, the guidance presented is based upon MAR’s position as to how the FCC Rules will be (or should be) interpreted.

In a surprising communication from the National Association of REALTORS®, MAR learned the Federal Communications Commission's (FCC) telemarketing rules would extend the national do-not-call provisions of the FTC rule to intrastate calls. The new registry is nationwide, includes all telemarketers (with the exception of certain non-profit organizations and political calls), and covers interstate and intrastate telemarketing calls.

NAR did not expect this rule to affect states and told MAR that state legislation superceded the FCC’s ruling. This, however, was not the case.

MAR is disappointed with this development. MAR staff has informed leadership at NAR that it believes there was a lack of awareness and communication on this issue. Other states have shared similar views. The NAR has since responded with a more aggressive communications effort. To see what NAR is doing, click here

In 2002, MAR successfully exempted REALTORS® from Michigan’s do-not-call list. At the time it was a great victory for Michigan REALTORS®. Under the language of the bill, HB 4042, sponsored by Rep. Jennifer Faunce (R-Warren) lawmakers exempted those businesses making calls to set up a face-to-face meeting, such as REALTORS® and could make calls as usual.

On July 2, NAR reported in its weekly newsletter for the first time that the new FCC rules supercede state do-not-call exemptions for REALTORS® in Michigan and other states that had successfully secured exemptions in their legislature.

The federal government launched the National Do-Not-Call registry. In the first three days, the FTC registered more than 15.3 million phone numbers at a rate of 158 numbers per second with the FTC. It is expected that the lists will be available to telemarketers by September and as noted, enforcement is scheduled to begin on October 1, 2003.

To view compliance information visit:
http://www.ftc.gov/bcp/conline/pubs/buspubs/calling.htm

The FCC rule defines telemarketing as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.”

If this ruling stays the course, starting Oct. 1, REALTORS® must:

• Consult the new nationwide Do Not Call list before making any call.
• Have a written policy, available upon demand, for maintaining a company-specific do not call list. Download MAR's sample office policy here.
• Record any recipient’s request to be placed on the company list.
• Do not share your company-specific list
• Provide the name of the person or entity on whose behalf the call is being made and a telephone number or address at which the person or entity may be reached.
• Not use a 900 number, or any other number, that incurs extra charges beyond the ordinary charges for placing a call.
• Honor any do not call request for five years from the time the request is made.

Telemarketers may continue to call individuals who have not placed their numbers on a do-not-call list and those with whom they have an established business relationship. (A telemarketer may contact a customer for 18 months after a business transaction and three months after an inquiry or application.)

• Consumers may register their cellular phone numbers.
• The FCC and FTC will coordinate enforcement efforts.The details will be announced in a Memorandum of Understanding between the two agencies.
• Consumers registering with the national registry will be able to provide express written permission to any companies from which they wish to receive telemarketing calls.
• The FTC will provide the list to telemarketers. It will be organized by area code. For the first 5 area codes, the list will be free. Any additional area codes will be assessed a fee with the fee for the entire list capped at $7200.

The following calls will still be permitted:

• Political solicitations
• Telephone surveys (calls purporting to take a survey, but also offer to sell goods or services, must comply with the Do Not Call Registry)

NAR is currently assessing options for amending these rules either through the regulatory and/or legislative process or via a legal challenge. NAR said it understands this development is undermining the efforts of state associations seeking exemptions, and those states that already have exemptions, for real estate activity. In the meantime, NAR is developing a comprehensive guidance document for members on how to comply with the rule changes and make it widely available on the Realtor.org web site.

The following summarizes some of the key events that led to this latest action:

On December 18, 2002, the Federal Trade Commission (FTC) amended their Telemarketing Sales Rule (TSR). Key among the changes is the development of a national do-not call registry directed at stopping most unwanted telemarketing calls to consumers. NAR sought to maintain an exemption for real estate professionals during the rulemaking process. Unfortunately, the FTC did not agree with our position given their desire to tighten the rule and minimize exemptions. The FTC's authority however is limited to interstate activity. This was considered the good news.

In March 2003, Congress enacted the Do-Not-Call Implementation Act. The purpose of the Act was to authorize the FTC to collect fees from telemarketers for the lists. In this legislation, Congress also required the FCC to issue final rules "to maximize consistency with the FTC rules". For example, the FTC lacks the authority to regulate banks, airlines, insurance companies, and telephone companies. It was anticipated the FCC among other things would consider these entities for inclusion under their rules. Congress also imposed reporting requirements on the FCC that include:
"An analysis of the progress of coordinating the operation and enforcement of the Do-Not-Call registry with similar registries established and maintained by the states". Obviously, Congress did not intend for the FCC to pre-empt state laws in this area .This analysis was to be presented to Congress annually.

In April 2003, the FCC requested comments on how to meet this congressional mandate, specifically seeking input on administrative issues such as how to fulfill the reporting requirements set by Congress. Broadening the scope of the rule to include intrastate activity did not appear to be at risk. This was underscored by language in the FTC rule, which concluded that real estate brokerage activity was largely an intrastate activity, and therefore not subject to the rule. NAR submitted comments to the FCC, primarily using it as an opportunity to publicly restate our position and advocate for an exemption from the National Do-Not-Call registry requirements. Recognizing the FCC has authority to establish an exemption for "local telephone solicitations", NAR urged the FCC to use this authority to grant an exemption. In the absence of an express exemption, we strongly encouraged the FCC to recognize the applicability of the FTC rules to interstate calls only.

Unfortunately, on June 26, 2003, (2 1⁄2 months ahead of the September 7, 2003 deadline) the FCC responded to the overwhelming public demand and political pressure to eliminate as many unwanted calls as possible and adopted revisions to its existing rules to further restrict telemarketing activity to include intrastate calls. Although the text of those rules have not yet (as of July 3, 2003) been made publicly available, the FCC's news release describing these amendments suggests that, most telemarketers, including real estate professionals, will now have to comply with the Federal Do-Not-Call rules, even when making only intrastate calls. The release further indicates that the FCC's rules constitute a floor and supercede all less restrictive state do-not-call rules. As noted, however, the specific text of the final FCC amended rule is not yet available to the public and the precise application of it to real estate telemarketing cannot be determined.

On Friday, June 27, 2003, the White House, The Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) launched the National Do-Not-Call registry. In the first three days, the FTC registered more than 15.3 million phone numbers at a rate of 158 numbers per second with the FTC. It is expected that the lists will be available to telemarketers by September and as noted, enforcement is scheduled to begin on October 1, 2003.

MAR's public policy fought successfully to exempt REALTORS® from a statewide do-not-call list. The following is a timeline of events that took place to procure a REALTOR® exemption. Please note: All the efforts listed below, and the positive result, have been superceded by the FCCs new do-not-call policy.

January 25, 2001:
House Bill 4042 is introduced by Rep. Jennifer Faunce (R- Livonia).

May 9, 2001:
The bill is passed out of House Committee on Energy and Technology with exemption for REALTORS®.

June 13, 2001:
Under pressure, the House of Representatives adopts a substitute to HB 4042 removing all exemptions from the telephone solicitation bill.

June 14, 2001:
The bill passes by a count of 99-1.

June 18, 2001:
A REALTOR® Call to Action goes out on HB 4042. See page 4 for more information about Calls to Actions.

December 13, 2001:
1 MAR successfully secures an explicit REALTOR® exemption to HB 4042 on the Senate floor. The bill is passed by a vote of 22-11 and referred to conference committee.

December 3, 2002:
Conference committee reports out HB 4042 with its current exemptions for REALTORS®. They are exempt because they are making calls which do not result in a sale over the phone and are for the purpose of setting up a face to face meeting.

December 3, 2002:
The conference committee report passes the House by a vote of 75-0.

December 5, 2002:
The conference committee report passes the Senate by vote of 34-3.

December 30, 2002:
HB 4042, with the exemption of REALTORS® from referencing the state do-not-call list, is signed into law by Gov. John Engler.

MAR values the opinions of its members. If you would like more information or to comment on this issue please e-mail us by clicking here.