12.13.06

Avoid Do-Not-Call Litigation

The MAR has become aware of an individual who is targeting businesses with threats of litigation concerning their do-not-call policies. The individual, Ryan Swanberg, has used this method against other industries and has now focused his efforts on real estate brokerages.

Swanberg is a self-styled “consumer rights advocate” located in Minnesota. He first contacts a 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 he does not receive the brokerage’s policy within five days, he threatens to file a lawsuit against the brokerage in Minnesota state court for violations of the Federal Communication Commission's do-not-call regulations and the Telephone Consumer Protection Act. He offers the brokerage the opportunity to avoid the lawsuit and settle the matter for an amount ranging from $1,000 to $5,000, based on the assumption that businesses are more likely to settle than to spend the money to litigate a relatively small claim.

Your best defense against these types of claims is to be prepared to properly respond to these calls. If a brokerage is engaged in any telemarketing, the brokerage is required by law to have a written do-not-call policy available upon request. It is also important for a brokerage to have their do-not-call policy available for easy reference on the brokerage's website. The policy should be company-specific, not necessarily a policy for complying with the National Do Not Call Registry (although the policy could include this information as well). The brokerage also needs to educate its salespeople to respond to these requests by promptly transmitting or referencing the location on the brokerage's website for the policy to the requestors, making sure salespeople document the transmission of the policy information to the requestor.

Swanberg’s five-day 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 30 days to add a consumer’s name to the company’s do-not-call list, further demonstrating that a five-day turnaround is likely unreasonable. Nevertheless, the faster you make the policy available in response to a request, the better your chances may be of avoiding a lawsuit.

If your brokerage does not participate in telemarketing, you are not obligated to maintain a do-not-call policy, and you should promptly respond to his request and state that your company does not do telemarketing. Other industries have reported, however, this course of action may or may not prevent a suit from being filed. Because this area of law is relatively new and unsettled it is very important to take measures to have do-not-call policy information readily available for the public should a request be made.

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