Rising vacancy rates have led many real estate firms to turn to new forms of marketing, but new federal “Do Not Call” and “Do Not Fax” rules mean firms will have to review, and possibly restrict, some of their practices.

New rules from the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) prohibit firms from calling any of the 50 million residential and mobile telephone numbers listed on a new federal Do Not Call (DNC) Registry.

Under the rules, telemarketing firms must review the national DNC Registry quarterly and remove registered phone numbers from their call lists. (See www.donotcall.gov for information about accessing the registry.) Firms that call a DNC-listed consumer could be fined up to $11,000 per call and could be sued by the consumer.

In addition to the national DNC list, firms are also required to maintain firm-specific DNC lists so a consumer can request to not receive telemarketing calls from that firm even if he or she isn't registered on the national DNC list. Note that the rules only cover residential consumers. Firms may continue to telemarket to other businesses.

The Fine Print

Further complicating the matter, however, the rules do allow firms to call consumers who are on the DNC registry, if the firm has an “established business relationship” (EBR) with that person. Depending on the kind of relationship, though, EBRs expire in either three months or 18 months. Three-month EBRs begin when consumers make an application or an inquiry of the firm; EBRs last for 18 months if an actual transaction has taken place between the consumer and the firm.

For example, when a potential resident inquires about an apartment community, the firm may telephone the individual for three months, even if he or she is on the national DNC list. If the consumer had been a resident of the apartment community, the firm could contact him or her for 18 months after the resident's final rent payment.

Firms should note that if the individual is on the firm-specific DNC list as opposed to the national DNC registry, then there is no EBR exemption and telemarketing calls are not permitted, period. In other words, a consumer may request that a firm stop calling and thereby put an immediate end to the EBR. Conversely, consumers may give a firm express written permission to contact them even though they are on the national DNC list or an EBR has expired.

Rules Put ‘On Hold’

The rules were scheduled to go into effect on Oct. 1, but in September a federal court halted FTC enforcement when it ruled that the law unconstitutionally restricts the free speech of telemarketers because it exempts charities. But on Oct. 7, an appeals court granted an FTC request to allow enforcement while the litigation continues. The FCC, which began to enforce its own rules on Oct. 1, had already logged 2,379 do-not-call complaints by Oct. 8. Since the regulations are now in effect, and the FTC law will likely survive the ongoing court battle, real estate firms should be aware of their compliance obligations.

Telemarketers are not the only ones affected by the new rules; fax marketers must also review their practices. And unlike the DNC rules, the fax regulations apply to business as well as residential fax machines. More importantly, in contrast to the DNC rules — which assume a consumer wants to receive marketing calls unless he or she specifically says that he or she doesn't — the Do Not Fax (DNF) rules assume consumers do not want to receive promotional faxes.

Thankfully, implementation of the most onerous provisions of the fax law has been delayed until January 2005 or until the FCC issues a decision on the impacted issues, whichever is sooner. Firms are reminded, however, that existing regulations already limit blast-fax marketing.

The rules forbid companies from faxing materials with “commercial” content unless the company has an EBR with the intended recipient or the recipient has given written permission. The EBR terms for faxing were slated to be the same as they are for telemarketing; however, on Oct. 3, the FCC delayed implementation of this portion of the rule. Therefore, firms may now send commercial faxes to anyone with whom they have done business in the past. In addition, these faxes must include certain identifying information, including the sender's identity, the time and date, and the sender's fax machine number and state-registered name.

Even though implementation of portions of both rules is delayed, they are part of a growing trend toward increased consumer protections. Smart firms will review their communications practices today and take compliance measures to avoid enforcement headaches.

Elizabeth Feigin Befus is a legislative analyst with the Washington, D.C.-based National Multi Housing Council/National Apartment Association Joint Legislative Program.