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Is cold calling by phone illegal?

Cold Calling Laws & Regulations

Is cold calling by phone illegal

Cold calling and the law

Is cold calling by phone illegal? Many businesses today view that cold-calling is one the indispensable evils in the highly active, constantly-connected world. Actually, many modern sales methods require human interaction which you can only obtain through the phone, video chat or even in person.
When trust is created by one phone call or personal interaction at a given time, that means your entire revenue stream could depend on the effectiveness of your B2B cold call efforts, which is why it’s crucial to make sure you’re not risking it all in violation of the law.

Table of Contents

What Is Cold Calling

Is cold calling by phone illegal?

Is cold calling by phone illegal? To answer that question, cold calling isn’t legal. However, cold calling has evolved quite a bit since businesses began making use of it as a marketing strategy in the 1960s. Making phone calls late at night, and an increase in scams involving money made cold-calling an irritation for consumers. Thus, in the beginning of the 2000s when the US government began to regulate cold-calling.
The new rules mean that cold calling is more restricted than it was previously. Companies must adhere to rules regarding who they contact and how they sell and how they answer the phone. But cold calls are legal, and with the right strategies it can be a powerful selling tool to have in your toolbox.

What Is Cold Calling?

It is the procedure of calling a potential client or customer who has not previously expressed desire to speak with a representative from customer service or making purchases. Contact information for cold-calling is usually gathered by sales and marketing professionals by using non-traditional methods like searching for and making connections from public information.
The effectiveness of cold-calling is often debated, since the process is lengthy and negative reactions are more common than those that are successful. However, the benefits of cold calls include instant feedback, personal connections with the customer, less likelihood of being ignored, and easy access. For smaller companies it’s an inexpensive method to reach prospective customers and build relationships.
A cold call shouldn’t be mistaken for a warm call one that is initiated by a prospect who has asked a question, accessed an online site or downloaded content.

What are the regulations for cold calling?

It was formulated and applied through The Federal Trade Commission (FTC) The Telemarketing Sales Rule (TSR) is a set of rules that define how companies can use telemarketing to connect with customers.
The primary goal for the TSR is to shield customers from annoying telephone calls made at home on their personal phones. It also empowers specific law enforcement agencies to tackle fraudulent telemarketing and scams as well as providing consumers greater privacy protections from untrustworthy phone callers.
The TSR also contains disclosure requirements, prohibitions on fraud, call-time windows caller ID transmissions, outbound call prohibitions, charges restrictions, upsell rules as well as pre-recorded message limitations. the responsibility of keeping accurate records for companies that use automated calls. However, the majority of B2B cold-calling is exempt from TSR which means that, generally speaking, B2B cold calling is legally permitted. However, there are exceptions.

TSR Regulations

If they are cold-calling consumers, businesses must adhere to strict guidelines and rules. In actual fact, TSR contains various regulations which businesses must comply with to ensure conformity.
This includes things such as:
  • Call-time windows
  • Disclosure requirements
  • Caller ID transmissions
  • Prohibited misrepresentations
  • Billing restrictions
  • Pre-recorded message restrictions
  • Upsell requirements
If they are cold-calling consumers, businesses must adhere to strict guidelines and rules. In actual fact, TSR contains various regulations which businesses must comply with to ensure conformity.
Foundational Cold Calling Rules

Foundational Cold Calling Rules

There are numerous laws and regulations that apply in relation to cold-calling. Although your company must be knowledgeable of each law or regulation applicable to your telemarketing efforts, there are some basic rules that every cold calling professional must know about.
You must establish your identity first: before you start, before you can begin to sell your product, be sure that all cold-call scripts begin with an opening. Legal cold calls should begin with your name and the reason for calling. Within the first two minutes, callers need to provide:
  1. Name
  2. Company they’re representing
  3. Purpose of their call
  4. Phone number and/or address if requested
Cold calling hours: Legal cold calls are only permitted to be conducted between 8 am and 9 pm all day, every day. This timeframe is only applicable if the recipient is not a current customer or a client. This timeframe is exempt if the client has indicated that the caller is able to call them at any time.
Be aware of do not call lists: All security companies, as well as various other kinds of firms, must keep a do-not-call (DNC) database. If a consumer opts to sign up for the DNC cold-callers must be respectful of their wishes. If they call a person who is registered with the DNC, the DNC is a valid reason to make a formal complaint to the company and regulators, the state as well as the Securities and Exchange Commission (SEC).
Never collect funds over the phone: In this day and age of phone scams, consumers are very careful when they provide financial information on the phone. If your cold phone results in the theft of money from the client’s (call receiver’s) banking account a written authorization is required.
You’ll also find that the majority of customers aren’t willing to reveal their banking details on the phone. The public has come to expect that trustworthy companies will have more secure methods of collecting cash.
Honesty is expected: The SEC is confident that every cold caller is honest. There’s a vast distinction between deceitful marketing and honest marketing particularly when it comes in regards to calls from cold numbers. Always be honest with the people you call.

The National Do Not Call Registry

The National Do Not Call Registry was developed to offer consumers the option of deciding whether they would like receiving calls from companies that sell telemarketing. The registry covers the area codes of all 50 states and in the District of Columbia, and U.S. territories. Calls not covered by the registry comprise calls from:
  • Charities
  • Political organizations
  • Telephone surveyors
  • Companies that have an existing business relationship with a consumer
Be aware that it is unlawful for telemarketers to call any number that is listed on the National Do Not Call Registry. Businesses and sellers must sign up to this registry, and then pay the necessary charges prior to making calls. Violators can be fined up to $43,792 per violation.

B2C and B2B Cold Calling Are Different

Be aware that it is unlawful for telemarketers to call any number that is listed on the National Do Not Call Registry. Businesses and sellers must sign up to this registry, and then pay the necessary charges prior to making calls. Violators can be fined up to $43,792 per violation.
This is to protect against the exploitation of telemarketers who are simply looking for methods to bypass the TSR. Also, the B2B call cannot be transformed into an B2C call in the event that it’s the “business” that states that they’re not interested in the product or service provided. In these cases, the standard TSR rules are in place including compliance with do-not-call lists, appropriate timing windows, and other rules.
On the B2B end of things, this is where the FCC’s wireless calling rules kick in. In accordance with the Telephone Consumer Protection Act (TCPA) the wireless number is not able to be dialed using an automated dialing device without written permission. Since you aren’t able to tell if the number that appears on your list is a mobile phone or office telephone, or even an office phone that is redirected to a mobile phone, it’s better not to take the risk.

Frequently Asked Questions

Although telemarketing is a serious public nuisance, and as such, the Telephone Consumer Protection Act (TCPA) was passed in the year 1991 to combat the growing violation of privacy they caused in the eyes of U.S. citizenry, all marketing isn’t legal. There are strict guidelines that businesses must follow to remain within the legal boundaries.

It grants authorities like the Federal Communications Commission (FCC) and law enforcement agencies more authority to pursue scammers who make phone calls and should allow citizens to spot the robocalls and not answer them.

The TRACED Act requires telecommunications service providers to implement a number-authentication system at no cost to consumers, to help network subscribers identify callers. Additionally, it increases the penalties for robocallers who persist in contacting residents via telephone.

It grants authorities like the Federal Communications Commission (FCC) and law enforcement agencies more authority to pursue scammers who make phone calls and should allow citizens to spot the robocalls and not answer them.

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