IMPORTANT ALERT:  DNC NUISANCE LAWSUIT SCHEME
 

"Do Not Call" Alert
Issued by the National Association of REALTORS on 11/22/2006
Reprinted with Permission

NAR has become aware of an individual threatening to bring claims against real estate brokerages for violating the federal “do not call” laws. The caller has used this method against other industries and has now focused his efforts on real estate brokerages. The caller is an individual whom the brokerage has never contacted and probably never had any intention of contacting.

The caller’s method works in the following way. First, he contacts the real estate brokerage and asks that his phone number be placed on the company’s internal “do not call” list. He also requests that the brokerage mail him a copy of the company’s policy for maintaining its internal “do not call” list within five days. If the caller does not receive the brokerage’s “do not call policy” within five days, he will threaten to file a lawsuit against the brokerage in Minnesota state court. To avoid the lawsuit, the caller offers the brokerage the opportunity to settle the matter for around $5,000. The caller is not a lawyer.


Legal Requirements

The caller’s method is not without legal support. The Federal Communication Commission's (“FCC”) regulations, enacted pursuant to the Telephone Consumer Protection Act of 1991 (“TCPA”), state that those who engage in "any telephone solicitation to a residential telephone subscriber" must also have a "written policy, available upon demand, for maintaining a do not call list"- i.e., its company-specific do not call policy, not necessarily its policy for complying with the “Do Not Call Registry” (although policy could include this information as well).

The caller also relies on a 1996 FCC letter which states "even where a company does not solicit a particular consumer, we find nothing in our rules that limits a company's duty to disclose its policy if it does engage in telephone solicitation. Additionally, we believe that failure to provide a do not call policy is a prohibited act under the TCPA." Therefore, if the brokerage is engaged in any telemarketing, it must have a “do not call” policy which must be made available to send to those who request it from the brokerage, possibly even if the brokerage has never contacted the consumer.

The caller’s five day time frame demand is not supported by the TCPA regulations or FCC correspondence. Instead, the only existing guidance from the FCC states that the brokerage must send its policy in response to a request within a “reasonable amount of time following the consumer's request". In addition, FCC rules give a company thirty days to add a consumer’s name to the company’s do not call list, further demonstrating that a five day turnaround time is likely unreasonable. There also might be jurisdiction issues if the lawsuit is filed in Minnesota state court against an out-of-state defendant. Further investigation has discovered that the caller has filed five lawsuits in small claims court, with the last being one being filed in 2003. It is not clear whether he has ever succeeded in court. Nevertheless, the faster you send the policy in response to a request, the better your chances will be of avoiding a lawsuit.


Summary

A real estate brokerage’s best defense against claims like those described above is for the brokerage to be prepared to properly respond to these calls. The brokerage should have a written do-not-call policy available upon request; needs to educate its salespeople to respond to these requests by promptly transmitting the policy to the requestors; and should make sure salespeople document the transmission of the policy to the requestor. For those who do not have a do not call policy, a model policy is attached below. Note a more complete policy detailing your company’s compliance with the federal “Do Not Call Registry” is recommended, but not required- click here to learn how to create a more complete policy and so qualify for the “safe harbor” provision in the federal rules.

NAR's Model "Do Not Call" Policy*
Reprinted with Permission

If you do not want to receive sales calls from [COMPANY NAME], you can ask us to place your telephone number on [COMPANY NAME]’s "Do Not Call" list. In compliance with federal and state laws, your request will be documented immediately. Please allow up to 30 days for your telephone number to be removed from any sales programs that are currently underway.
 

 •  Your request can be in writing or by phone, and must include, at a minimum, your telephone number.
 •  If you have multiple telephone numbers, tell us all numbers that you want to be included.
 •  You will remain on our "Do Not Call" list for five years, unless you ask to be removed.
 •  If your telephone number ever changes, you must give us your new information for your"do not call" status to remain in effect.
 

Many "do not call" regulations permit companies to contact their own customers even though your number(s) are on these other "do not call" lists. Therefore, if you are a [COMPANY NAME] customer, you may be contacted by [COMPANY NAME] even though you are on these other "do not call" lists. If you do not want to be contacted by [COMPANY NAME] even though you are a customer, simply follow the steps above to be placed on [COMPANY NAME]'s "Do Not Call" list and your request will be honored.

Being on [COMPANY NAME]'s "Do Not Call" list means that you will not receive sales calls by anybody representing [COMPANY NAME]. We may still contact you, however, for non-solicitation purposes.

* NOTE THIS POLICY IS ONLY PROVIDED FOR GUIDANCE PURPOSES AND IS NOT INTENDED TO SERVE AS LEGAL ADVICE. BE SURE TO CONSULT YOUR ATTORNEY WHEN CREATING YOUR COMPANY’S “DO NOT CALL” POLICY