Back on Jan. 1, 2004, a day when most of us were discussing New Year's resolutions, the Federal Trade Commission (FTC) acted on one of its own, amending its Telemarketing Sales Rule (TSR). The TSR prohibits businesses from telemarketing to consumers, but it exempts financial institutions, so credit unions did not necessarily need to worry about the requirements.
After six years, in January of 2010, ironically just after the Supreme Court decided an FCC matter related to the Janet Jackson case, the Federal Communications Commission has finally proposed its own set of rules governing "robocalls." This time around, credit unions will be subject to these FCC rules, if they are adopted.
The FCC's proposal will require credit unions to: (1) obtain express written consent from members before making artificial or prerecorded telephone messages ("robocalls"), even when an established business relationship exists and (2) provide an automated and interactive method to "opt out" of future robocalls.
The Necessary Consent
Under the proposed rules, credit unions cannot use robocalls to contact members, until their members sign a written consent allowing robocalls. The written consent must clearly and conspicuously authorize the credit union to contact the member using an automatic telephone dialing system, an artificial voice or a prerecorded voice. Credit unions cannot require members, even indirectly, to execute the consent agreement as a condition of service.
The Message
The proposal also requires that all artificial or prerecorded telephone messages to residences must clearly state the credit union's registered name. The message must also disclose whether the call's purpose is to sell goods or services and, if so, the nature of those goods or services. After stating the call's purpose, the message should immediately tell the member how to opt-out by voice or keypad at any time and provide a toll-free call-back number to assert a do-not-call request. The toll-free number must connect directly to an automated interactive voice or keypress opt-out mechanism that automatically adds their number to the company-specific do-not-call list.
The number must also be accessible at any time through the telemarketing campaign and employ software that immediately disconnects the call when the member is finished. Furthermore, calls to non-residential numbers are subject to similar but not identical restrictions.
Texters Beware
Sending "automatic" text messages may also be subject to the FCC proposal. Arizona, Illinois and the 9th Circuit Courts have held that texts can qualify as "calls" and must comply with the Telephone Consumer Protection Act. As a result, your credit union should require members to affirmatively consent to receiving text messages before you send text messages to them. Other requirements exist. For example, you should also inform members that their service provider may charge for receiving and sending texts. Lastly, you should educate your members of their right to revoke the text message authorization at any time, including at the end of every text.
Of course, since the rules are not yet final, credit unions might be able to employ a type of Hail Mary pass. Alternately, if we have another televised "event" during the next Super Bowl Half-Time Show, maybe it will take the FCC another six years to resolve that issue, and again focus its attention on robocalls.
Justin Hosie is Shareholder, and Christopher J. Hennen and G. Clinton Heyworth are associates with the law firm Chambliss, Bahner and Stophel, P.C., Chattanooga, Tenn. They can be reached at
