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The End of Either/Or -- How to Reach Your Customers and Meet Compliance Regulations

by Brian Moore, Financial Services Market Manager and Resident Compliance Expert, Varolii Corporation - August 16, 2013

The End of Either/Or – How to Reach Your Customers & Meet Compliance Regulations



Today’s modern digital consumer expects a certain level of communications with the companies they do business with. They expect proactive updates about things like upcoming appointments, payment due dates, mortgage loan status and flight schedule changes. However, while consumers expect – and demand – these types of communications, it can be daunting for companies to reach consumers while also complying with federal and state regulations.

Organizations must meet various requirements, depending on their industry and where their customer lives, that impact how they communicate when striving to deliver high quality customer service. Walking the tight rope between compliance and customer satisfaction is a challenge that every consumer-facing business must meet. It can be difficult to know which regulations have the biggest impact and how to adjust communications strategies accordingly.


Think Purpose First

It’s most useful to think about the purpose of your communication first, as that will determine which set of regulations or parts of regulations will apply. For example, the Telemarketing Sales Rule (TSR) applies to, you guessed it, telemarketing. Same goes for various state laws – there are more restrictions placed on marketing communications than on purely informational messages.

When it comes to the Telephone Consumer Protection Act (TCPA) of 1991 – arguably one of the most critical compliance regulations – this “think purpose first” approach is critical. Here is a handy outline that looks at the TCPA first from the perspective of communication purpose, followed by the type of communication technology you use and the type of telephone service attached to the number being called, the combination of which determines which requirements of the TCPA apply.


Telemarketing

· Pre-recorded Voice or Text message, wireline & wireless service = prior express written consent, message content and opt out requirements, time of day restrictions. Exemption for marketing communications regulated under HIPAA.

· Auto-dialed agent, wireless = prior express written consent (effective 10/16/13 – no more established business relationship loophole), interactive opt out option on abandoned calls (no agent within two seconds of called party answer), three percent abandoned call limits, time of day restrictions

· Auto-dialed agent, wireline = not on national or in-house Do Not Call list, interactive opt out option on abandoned calls, three percent abandoned call limits, time of day restrictions


Collections

· Pre-recorded, wireless = prior express consent (provision of mobile number by customer is sufficient), content requirements (calling party identity, call back number)

· Pre-recorded, wireline = content requirements (calling party identity, call back number)

· Auto-dialed agent, wireless = prior express consent (provision of mobile number is sufficient)

· Auto-dialed agent, wireline = no restrictions

Informational (that does not include an advertisement or constitute telemarketing)

· Pre-recorded, wireless = prior express consent (provision of mobile number by customer is not sufficient), content requirements (calling party identity, call back number)

· Pre-recorded, wireline = content requirements (calling party identity, call back number)

· Auto-dialed agent, wireless = prior express consent (provision of mobile number not sufficient)

· Auto-dialed agent, wireline = no restrictions


What about Specific Industries?

Next to telemarketing, the collections industry has the most purpose-specific rules. On top of the TCPA, collection agencies have to worry about the federal Fair Debt Collections Practices Act (FDCPA) and regulations in most of the 50 states. And compliance, even when you know the rules, is no easy thing.

Take the issue of leaving a message on an answering machine. The FDCPA requires collection agencies to make it known that just about any communication they initiate is an attempt to collect a debt and any information obtained will be used for that purpose.

Sound familiar? If you watch Law & Order reruns as religiously as I do, I’m sure you recognize the similarity to the Miranda warning the detectives recite when they collar a perp. And that’s why collection agencies refer to this as the “mini-Miranda”, and they dutifully recite it each and every time they get a debtor on the phone. But, when they instead reach an answering machine, they find themselves between a rock and a hard place.

That’s because the FDCPA also prohibits disclosing to a third party (someone who is not the debtor) that a communication is an attempt to collect a debt. Since the agency can’t know who will listen to an answering machine message they might leave, they are at risk of violating the FDCPA if they do recite the mini-Miranda and if they don’t. So, many of them are choosing to just hang up instead. And telemarketers thought they had it rough!


Competing Regulations

What happens when matter and anti-matter collide? You don’t want to know. But what if one government interest collides with another? Pretty much the same thing, but it’s not science fiction. It is a business reality for businesses in mortgage servicing, passenger airlines and healthcare, among others.

For example, under the Consumer Financial Protection Bureau's (CFPB) servicing rules, mortgage servicers are required to make contact with past due borrowers by the 36th day of delinquency, and are strongly encouraged to do so by phone or other forms of electronic communication (including voice and text messages). The CFPB wants servicers to make every possible effort to assist borrowers in avoiding foreclosure by communicating all the loan modification programs the government and mortgage investors have made available. But, what happens if the borrower only has a mobile phone and the TCPA requires prior express consent to reach them there?

The same holds true for passenger airlines and healthcare organizations in situations where a passenger or patient has provided their mobile phone as the main point of contact. In most cases like this, the customer is providing express consent when they provide the mobile phone number – but that isn’t always the case. Companies should document carefully where they’ve gotten consent so that they avoid any potential legal risks under the TCPA.


How Technology Can Help

Since many of the rules come in to play based on the communication technology being used, it’s only fair that the technology itself provide some protection against rule violations. Modern dialing systems, automated communications, customer interaction management providers and integrated call records can all help meet and track compliance.

For instance, most modern dialing systems have sophisticated controls to limit call abandonment (which occurs when a predictively dialed call is answered and there is no agent immediately available to speak with the customer), something both the TSR and the TCPA say can’t exceed three percent per campaign.

The same goes for calling hour and holiday controls. The TCPA allows telemarketing (when it allows it at all) only between 8 a.m. and 9 p.m. customer local time. But various states have also weighed in on this topic – many prohibit calls before 9 a.m. while others say you can’t call after 8 p.m. One state even cuts you off at 5 p.m. and others say “not on my holidays.” The right technology system will enable companies to automatically configure guard rails based on individual states so that communications don’t go into the ditch of noncompliance.

For mobile devices, being able to identify which numbers are mobile and which are landlines is critical for meeting TCPA regulations. Depending on the purpose of the communication, you must have either prior express consent or explicit written consent to autodial or message a mobile. So, if you don’t have the consent you need, your only recourse is to filter out the mobiles. Today’s best systems can do this automatically.

Finally, technology can enable better documentation and tracking for compliance reporting. As difficult as it is to prove a negative like “we did not make that call”, good record keeping is your best defense against claims of regulatory transgressions. Detailed records of call attempts and outcomes, call recordings, recorded message scripts, and clearly documented consent status in customer records can all come in handy if faced with a complaint.

With a smart ‘purpose first’ approach to customer communications and the right technologies to support that strategy, companies can successfully navigate the mine field of compliance and deliver the right message to the right person at the right time.


About the Author
Brian Moore is the financial services market manager and resident compliance expert for Varolii Corporation. He joined Varolii in 2001, bringing more than 25 years of experience in collections operations and technology to the company. To help companies navigate the compliance landscape, Varolii also recently launched www.ContactCompliance.com, an industry website dedicated to providing companies with a comprehensive resource to help them better understand the most common regulations and guidelines that impact outbound consumer communications.



 
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