Do Not Call, Do Not Email, Do Not Fax, Do Not Pass Go or Collect a Commission!By Seth WeissmanJune 2005

It is getting harder and harder for REALTORS® to use technology to reach prospective clients and customers. Laws now exist restricting the use of the telephone, facsimile and Internet as a way to reach prospects. This article provides a summary of various laws and practical steps REALTORS® can take to avoid penalties and lawsuits.

A Snapshot of the Do-Not-Call Laws

1. The No-Call ListThe Do-Not-Call laws comprise both federal and state laws. The federal laws are set out in the Telemarketing Sales Rule, 16 CFR Part 310 (“TSR”) and the Rules and Regulations Implementing the Telephone Consumer Protection Act, 47 CFR Part 64, Section 64.1200 (“TCPA”). Georgia regulations are set out in the Regulation of Telephone Solicitations, OCGA §46-5-27. The TSR prohibits telemarketing, which is defined as interstate telephone calls made to “…to induce the purchase of goods or services…” to residential phone numbers that are on the national Do Not Call List. The TCPA and Georgia regulations prohibit such telemarketing within the state as well as to another state. Phone numbers that are registered on the national list are automatically entered on the Georgia list.

2. Exemptions

Cold calling to consumers who have put their names on the Do Not Call List is allowed if:

i. The customer has granted prior written permission; orii. there is an existing business relationship, which is defined as 18 months between the

last transaction and the cold call; or

iii. The customer has made an inquiry. In such a case, the return call must be made no later than three months after the inquiry.

The existing business relationship exemption is very broad and will likely exist if a customer has made an inquiry, application, purchase, or transaction regarding products or services offered. A business relationship may exist even if there was no payment. Therefore, if a buyer brokerage agreement expires and the REALTOR® wishes to call the former buyer client to let him or her know of a specific property, the REALTOR® is free to do so within 18 months of the expiration of the listing. A business relationship would also exist if there is no written brokerage agreement but the REALTOR® has performed brokerage services. Therefore, if REALTOR® shows a few properties to a potential buyer and the buyer changes his mind about buying a property, the REALTOR® is allowed to call the buyer within 18 months of providing the service even if there is no written brokerage agreement. Under the inquiry exemption, if a buyer whose number is on the “No Call” List leaves a message and their phone number on your answering machine seeking information about one of your listings, you are free to return the call within 3 months.

3. Calling Do’s and Don’ts

REALTORS® should be aware that the laws also regulate calls to consumers even when the exemptions apply, or when calling consumers who have not registered on the No-Call List. Calls can only be made between 8:00 a.m. and 9:00 p.m. During the call, the following must be promptly disclosed truthfully, clearly, and conspicuously:

i. The name of the brokerage firm;ii. That the purpose of the call is to provide real estate brokerage services. How the

solicitation is made must not be misleading, such as describing the purpose as a “courtesy call,” if it is actually to seek a listing;

iii. The nature of the services being offered; andiv. If a prize is being offered and that no obligation by the consumer is necessary to

participate or win, and that a purchase or payment does not increase the chances of winning. When the consumer asks, the instructions on how to enter the prize promotion without obligation must be immediately disclosed.

4. Penalties The Federal Trade Commission or Federal Communications Commission may fine a violator of the federal law up to $11,000.00 per incident. Lawsuits may also be brought by the state attorney general or by private individuals, where fines may be up to $500.00. The Georgia regulations are enforced by the Governor's Office of Consumer Affairs, which has the power to issue cease-and-desist orders and impose fines of up to $2,000.00 per call. It may also issue investigations, subpoenas, administer oaths, and conduct hearings. Further, any person who receives more than one call within any 12 month period by or on behalf of the same caller in violation of the "No Call" law may bring a private action and is entitled to recover actual monetary loss or receive up to $2,000.00 in damages for each violation, whichever is greater.

5. Do Not Fax The TCPA also prohibits unsolicited advertisements to residential or business fax machines through the use of a fax machine, computer or other device, unless the recipient has given written permission. The Do Not Fax rule applies only to advertisements. Therefore, a REALTOR® who needs to fax the sales contract does not need to obtain the consent of the recipient. Further, the law is violated only if a plaintiff receives an "unsolicited" fax advertisement. The TCPA provides that a faxed advertisement is not “unsolicited” if consent has been given in writing, including the fax number in which the advertisement is to be sent. The Federal Communications Commission has clarified that the consent must be in writing, with the recipient’s signature, state that he or she consents to receiving the faxed advertisements from the sender, and include the fax number to which the advertisement may be sent. It further stated that permission cannot be in the form of a “negative option”, such as sending an advertisement with a request that the recipient call the number provided if he or she does not wish to receive further faxes. Similarly, fax requests for permission to transmit faxed advertisements, including toll-free opt-out numbers would violate the law. It has also issued an order that from July 1st 2005, all faxed advertisements require prior, written consent. The written permission must also be obtained even if there is an existing business relationship between the sender and the recipient, or if the advertisement is being faxed in response to an inquiry. Unlike the cold call provisions, the do not fax provisions do not contain the existing business relationship exemption. The FCC has taken a similar approach and stated that a prior business relationship is not sufficient to show that the recipient has given consent. However, the Georgia Supreme Court recently held that under the TCPA, consent to receive faxes can be given orally or in writing, and that the “business relationship” exemption to cold calling also applies to cold faxing. This case involved an application for class certification for a suit against a sender for allegedly violating the TCPA when its agent faxed 73,500 unsolicited advertisements to Atlanta area residents. The Court found since some of the faxes were sent to areas where the sender does business, some recipients must have an "established business relationship” with the sender and consent would be deemed to be given by these recipients.

While this case seems to indicate that the law in Georgia is settled, at least for now, that an established business relationship exemption applies to faxes, the courts may ultimately take a different approach. In any event, with effect from July 1, 2005, all advertisement faxes will require written consent. Therefore, it would be good practice to obtain the client’s or customer’s written permission to send faxes at the outset. Since this rule may also apply to advertisement faxes between the broker and its licensees, the consents of all parties should also be obtained. The penalty for violating the Do Not Fax rule is up to $1500.00 per fax. So for example, a broker may be in violation of the law for faxing a flyer to his or her licensees letting them know about a new client contact program that is available to be purchased through the broker. To be safe, a broker should add the following provision to the broker’s independent contractor agreement:

Licensee consents to receiving facsimile transmissions from Broker and/or Broker’s other affiliated licensees of any type and nature including but not limited to advertisements and faxes related to the sale of products or services at the following facsimile number(s) of licensee: __________________________Licensee agrees to notify Broker of any or all new telephone numbers at which licensee may receive facsimile transmissions and consents to Broker and Broker’s other affiliated licensees sending facsimile transmissions to any of these numbers.

Similarly, in very limited situations, REALTORS® working with buyers may want to consider getting their written consent to receiving certain kinds of faxes. For example, if a buyer's agent wanted to send a fax advertising a cleaning service or some other item or service not directly related to the purpose for which the REALTOR® was hired, this may create potential liability for the REALTOR® under the TCPA. To avoid any such potential exposure, a REALTORS® could add the following special stipulation to their buyer brokerage engagement.

Buyer hereby consents to receiving facsimile transmissions from Broker and Broker’s affiliated licensees at the following facsimile number(s): __________________________________________________ of any type or nature including but not limited to advertisements regarding a) properties available for sale, and b) the background, capabilities and services offered by Broker or companies affiliated with Broker.

Another issue that was raised in this case was whether such private suits can be brought as class action lawsuits. One of the requirements of a class action lawsuit is the questions of law and fact must be common to the class members. In other words, the class members must be in a similar situation. In this case, each alleged violation depended on whether there was consent given in each case. While the plaintiff could prove that some faxes were unsolicited, the business relationship exemption applied to other recipients; thus the commonality requirement was not met. The effect of this decision is that it would be very difficult to bring a class action suit for violations to the Do Not Call laws. The TCPA also requires that any fax message include the date and time the message was sent, the telephone number of the sending machine and the identity of the business or individual sending the message. This information must be located either along the top or bottom margin of each transmitted page or on the first page of the transmission.

Practice GuidesThese laws are something that REALTORS® should be aware of and to better explain how these laws work, various common real estate practices are set out below, with discussion on what steps may be taken to comply with the laws.

1. Calling a FSBO number

If a REALTOR® sees a FSBO sign and wishes to market listing services, he or she must check to determine if the phone number is on the Do Not Call List. If it is, the call is prohibited. If the purpose of the call is to make a genuine inquiry about the property, arrange a showing to a client or customer, or preview it for a potential customer or client, the call is probably not a violation of the “No Call” laws. However, a safe approach is to still check the Do Not Call List and not call if the number is on the list. What if the call is both to market listing services and make an inquiry about the property? Unfortunately, this would be a violation of the "No Call" laws. If an agent calls the seller of a FSBO and arranges to preview the property for a prospective purchaser, can the agent also solicit the seller in person for the listing? The answer to this question is "yes" since the solicitation would be made in person and not over the telephone.

2. Calling an Ex-Client or Customer

The “existing business relationship” exemption allows calls to be made within 18 months of the last transaction. If a business relationship exists but the person has since registered his/her number on the "No Call" List, it is prudent to request for written permission to call. Since previous clients, customers and referrals are often the best source of future business, it is a good idea to obtain their written permission to call at the outset. This is another reason why it is a good idea to obtain a written brokerage agreement, to which the REALTOR® may consider adding the following language:

[Buyer/Seller] expressly authorize Broker and Broker’s affiliated licensees to call [Buyer/Seller] for any purpose for the duration of this Agreement and for a period of 18 months following the termination or expiration of this Agreement, regardless of whether [Buyer’s/Seller’s] name presently or during this time frame appears on any “No Call” list.

3. Calling an Open House Visitor

Can a REALTOR® call a number that is left behind by a visitor to an open house? If the number is an office telephone number, the REALTOR® can freely make the call, since the Do Not Call laws only apply to residential numbers. If it is a residential number, the safer approach is to check the Do Not Call List first. A good Open House practice is to have visitors provide written permission, which may read as follows:

Registrant hereby gives permission to ______________ (broker) and its affiliated licensees to call me on the telephone to provide me with additional information regarding the property or to determine whether I have any continuing interest in this or other real property.

4. Calling a Referral

Can a REALTOR® call a number provided by someone who tells him or her that a third party wishes to engage or may require his or her services? It is unclear if an indirect inquiry falls under inquiry exemption. To pursue the lead, it is best to request that a message be passed asking the interested third party to contact the licensee directly.

5. Calling a “Captured Number”

In a situation where there is a “hotline” number for potential buyers to call, where the caller’s telephone number is “captured”, can a REALTOR® call the number? The test is whether a caller should have a reasonable expectation of receiving a return phone call from a REALTOR® to discuss the property. If so, a return phone call will not violate the Do Not Call laws even if the

caller's number is on the "No Call" List. Therefore, the message on the hotline should expressly state that the caller should expect to receive a follow-up call.

The “Safe Harbor” Provisions

The Do-Not-Call laws provide a “safe harbor” in that if a call is mistakenly made by a licensee or employee to someone who has registered on the Do Not Call List, the firm is protected from a lawsuit if certain requirements are met. The requirements for the firm are as follows:

i. it has written procedures to comply with the laws; ii. it monitors and enforces compliance with the written proceduresiii. it trains its employees and licensees in the procedures;iv. it maintains a “no call” list specific to the firm;v. it has a written process where the Do Not Call List is obtained at most three months

from the date the call is made. With effect from January 1, 2005, the firm-specific list has to be checked against the National list at least once every 31 days.

Similarly, the Georgia regulations provide that it shall be a defense if the caller “has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations…” Even if a brokerage firm contracts with a compliance service company, it is good practice for the firm to have its own written practice as a precaution. The following paragraphs set out how brokers can put the “safe harbor” requirements into practice.

1. Establish a “Written Procedure”

The procedures should clearly set out what is allowed under the law and the steps taken to ensure compliance. The procedures for each firm will be different, depending on how the firm operates. In any event, the procedures should set out the following policies:

i. It is the policy of the brokerage firm to comply with all applicable "Do Not Call" laws and regulations regarding telephone communications;

ii. The National Do Not Call List is available for inspection in every firm office [at the front desk/on the website, etc]

iii. The firm checks the National Do Not Call List every 30 days or within such time as may be required by law to check against its own firm-specific Do Not Call list for the purpose of complying with the law and will remove phone numbers that have been registered from its call lists.

iv. The brokerage firm maintains a "firm-specific" Do Not Call list and that each entry on the list shall be retained for at least five (5) years or until the requester makes a written request to be deleted from said list. The list shall be readily available in every office [at the front desk/on the website, etc].

v. It is also the firm’s policy that in order to comply with all applicable laws, the firm has a duty to supervise affiliated licensees and employees. Further, each licensee and employee shall undergo periodic training as to the applicable law regarding telephone solicitations. Any licensee or employee who violates the law fails to participate in such training or fails to comply with the firm's Do Not Call policy and procedures, will be subject to discipline which may include termination.

vi. The name of the representative in the firm to contact in the event of any question regarding the firm’s written policy and procedure.

One tricky area is how the firm-specific list is compiled and maintained. For example, if a client calls a division of the brokerage and requests to be added on the firm-specific Do Not Call list, does this extend to all divisions of the firm? The law treats distinct corporate divisions as separate entities. Therefore, if a consumer tells one division of the brokerage firm not to call again, another division of the same firm may call the consumer if it is a distinct corporate division.

The relevant factors are whether there are substantial differences in the operational structure of the divisions and whether the services provided by the divisions are substantially different.

2. Establish a Training Program

To qualify for the “safe harbor”, the firm must show that it has trained its licensees and employees in its written policy and procedures.

3. Keep Records

The firm should keep records for each time the National Do Not Call List is accessed and training of each licensee and employee. Further, the laws specifically require the following records be kept for at least two years:

i. the name, address and payment of each client or customer ii. the name, address and telephone of each licensee or employee who is involved in

telephone solicitations;iii. consent to call given by each client or customer;iv. the name and address of each prizewinner of prizes valued at over $25; andv. all substantially different marketing material, including telemarketing scripts.

New! Do Not EmailOn January 1, 2004, the CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act) went into effect. The law does not prohibit sending unsolicited emails, but sets out the requirements for those who send commercial email and gives consumers the right to ask emailers to stop spamming them. Commercial email is defined as email whose primary purpose is to advertise or promote a commercial product or service. Therefore, an email to advertise real estate brokerage services will be covered by the new law. An email that lists available properties, even if the properties are residential homes is likely to be regarded as commercial email. The requirements for commercial emails are as follows:

i. The "From," "To," and routing information, such as the originating domain name and email address, must be accurate and identify the person who sent the email;

ii. The subject line must not be misleadingiii. There is an opt-out method. This means clear language that the recipient can opt out

of receiving more commercial email, and a return email address or another Internet-based response mechanism that allows the recipient to ask the sender not to send future email messages to that email address;

iv. The email must be identified as an advertisement;v. The email must include the sender's valid physical postal address.

The above requirements to do not apply to a "transactional or relationship message", which is defined as an email that facilitates an agreed-upon transaction or updates a customer in an existing business relationship. Therefore, an email to confirm the terms of a purchase agreement will not be covered by the Act. The penalties for each violation of the law depends on which party is taking the action. If it is the Federal Trade Commission, the fine may be to $11,000.00, including issuing injunctive relief. The state’s attorney general may commence action, in which case the fine is up to $250.00 per violation with a cap of $2 million, and injunctive relief. Georgia has a new law, called the Slam Spam E-mail Act, which works in tandem with the federal law. The Slam Spam Act defines “commercial e-mail” as any e-mail message that advertises or promotes “the lease, sale, rental, gift, offer or other disposition of any property, services, or extension of credit. The new law allows any Georgia e-mail service provider and domain owner to bring legal action in respect of an e-mail that forges the email header, uses misleading subject headlines or falsely states that the information in the e-mail was requested. The penalty is a fine of not more than $1,000.00 and possibly a jail term of up to one year. However, there are situations where the violation will be treated as a felony, in which case the

penalty is a fine of up to $50,000.00, and possibly a jail term of up to 5 years. A violation becomes a felony if a spammer sends more than 10,000 messages in any 24-hour time period, 100,000 messages in any 30-day period or a million messages in a year. It is also a felony if the spammer generates more than $1,000.00 in revenue from a single spam message or more than $50,000.00 from all spam transmitted to any single Internet Service Provider.

Seth Weissman serves as general counsel for the Georgia Association of REALTORS®.