Chapter 10.1

Question 1

The telephone consumer protection act or “Cold Calling Act”

Answer 1

• Telephone solicitations may be placed only between the hours of 8 am and 9 pm local time of the party called
• The caller must provide the caller party with the identity of the caller and a telephone number or address at which the caller or firm may be contacted
• If the person indicates that the do not want to be called in the future the firm making the call must maintain the phone number on a permanent in-house “do not call” list
• The firm making telephone solicitations must have a written policy available on demand for maintaining a “Do not call” list
• Personnel engaged in telephone solicitations must be informed and trained in the existence and use of the “Do not call” list
• Auto-dialing used in conjunction with pre-recorded messages is prohibited to residences, health care facilities, and radio common carriers
• The act also bans unsolicited or “junk fax” advertisements and requires that a fax clearly indicate the sender’s name and the number of the sending fax machine
• If a prior business relationship with the person being called exists, the “no call” restriction does not apply. “Prior business relationship” is defined as the person contacted has an account with the person making the call and that there has been some form of actvity in the account during the last 18 months
• These rules do not apply to non-profit organizations
• A fax sent to a customer must contain all of the following information:
  - The date and time that the fax is sent
  - The identity of the sender, and
  - The telephone number of the sender
  
  • *-It does not require that the # of pages in the fax be included.
• The provisions set forth in this rule are applicable to members who make telephone solicitation calls to wireless telephone numbers
  
  • *-A member firm may outsource telemarketing functions, but the firm remains responsible for ensuring compliance with all provisions of the telemarketing rules.
• Unregistered cold callers are limited in what they may do with respect to solicitation of customers because they lack the appropriate registration. However they can:
  
  • Send investment literature to prospects
  • Set-up appointments for prospects with the RR’s
  • May extend invitations to firm-sponsored events
  • *-They cannot pre-qualify or profile prospects
• If RR’s are solicited by clients or employees of institutional clients to make donations to charitable organizations, member firms must have written procedures in place to identify and avoid potential conflicts of interest

Question 2

Telemarketing Supervision Provisions

Answer 2

• Firms engaged in outbound telemarketing calls must ensure that the member’s caller ID information is transmitted to the person being called. Such caller ID must include the name of the member, the telephone number and the member’s telephone carrier. Blocking caller ID information when placing outbound calls is prohibited.
• No member or person associated with a member shall disclose or receive, for consideration, unencrypted consumer account numbers, whether provided in lists or singly. This rule also includes disclosure of encrypted customer information with a key to its decryption.
• When obtaining billing information during telemarketing transactions, a member or person associated with a member must obtain the express informed consent of the person to be charged and to be charged using the identified account
• No member or person associated with a member shall “abandon” any outbound telephone call. An outbound telephone call is “abandoned” if a person answers it and the call is connected to a person associated with the member within 2 seconds of the person’s completed greeting.
  - If a member employs technology that ensures that abandonment of no more than 3% of all outbound telephone calls answered by a person, measured over a single calling campaign, if less than 30 days, or separately over each successive 30 day period that the campaign continues, the member will not be in violation of the abandonment rules
  - Outbound calls must be allowed to ring for at least 15 seconds or 4 rings before disconnecting an unanswered call
  - If a person associated with a member is unable to speak with the person answering the outbound call within 2 seconds after the persons completed greeting, the member must promptly play a recorded message that states the name and phone number of the member or person on whose behalf the call was placed. Pre-recorded messages, other than for use with abandonment rules, are generally prohibited.