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Brokers need to get DNC savvy

By: Kelly

If you’re one of those mortgage Brokers who thinks the Do Not Call laws don’t apply to you because you’re not making cold calls or you are only buying “scrubbed” leads, you’d better listen up to what the FCC has to say.



The federal government formally established the Do Not Call registry in December 2002 and launched it in June 2003 with joint enforcement from the Federal Trade Commission and Federal Communications Commission (FCC). Yes, the laws were originally enacted to curb those annoying dinnertime calls from your typical telemarketer; but the reality is these laws apply to all U.S. companies that make sales transactions over the telephone – including mortgage companies.



Beverly Hills compliance attorney Barry Kaye has been closely following this issue “The DNC laws are having a sweeping effect across the mortgage industry. The legislation essentially changes the way mortgage companies must conduct business. What is alarming is that many originators don’t have a clue or are simply not that interested”, says Kaye.



Given the fact that 40% of DNC citations issued by the FCC were to mortgage companies, many companies are taking a gamble. And the stakes are high. The fine for non-compliance is $11,000.00 per call. Just ask Dynasty Mortgage how quickly that can add up. Dynasty was recently issued a forfeiture notice for $770,000.00. You’d think a judgment of this size would get people reacting. Well, so did I.



The sad truth is that almost all the mortgage companies I’ve spoken with who asked not to be mentioned in this article think the laws don’t really affect them because they aren’t making cold calls or they buy “scrubbed” leads. The FCC says they’re wrong and they aren’t playing games.



“The FCC website is very clear regarding the DNC laws. We’ve sent out a message and our enforcement is vigorous,” notes FCC Director, Office Media Relations, David Fiske.



Any outbound call that you make to someone with whom you do not have an established and direct business relationship through realtor referral or past client referral, to a person on a list you purchased – must first be run against the DNC registry.



“The fact that a realtor gave your card to their client and told them you’ll be calling does not keep you compliant. If you think otherwise, you’re wrong. You’re just totally wrong,” says Kaye.



“You need to first get a SAN and run every call – including realtor referrals – against the DNC registry at least once every 31 days. You’ve got to have a written compliance policy in place and train your employees. You also need to have a system in place that documents all calls made, proofs of established clients and consumer inquires, and an internal real-time “do not call” list.



If that sounds like a lot, it is. Small to mid-sized companies are clearly at a disadvantage. Membership organizations like the National Association of Mortgage Bankers and the National Association of Mortgage Brokers have yet to provide an easy to access road map on what members can do to stay compliant like the National Association of Realtors has done for its members on their website.



Rather than relying on membership organizations for guidance, Kaye says you should consider an outsourced call compliance solution that takes care of everything for you.



“You’re on your own right now. And until this issue is really brought to the forefront, chances are we’ll see many more Dynasty Mortgages in the future”.



The Federal Communications Commission (FCC) issued a forfeiture notice to Dynasty Mortgage, LLC to the amount of $770,000 for 70 phone calls made by Dynasty to 50 consumers who were listed on the Federal Do Not Call List. According to the notice, Dynasty obtained the leads from a lead broker, who claimed the leads were scrubbed prior to Dynasty’s purchase of the lead.



The forfeiture notice also found that Dynasty failed to comply with the Federal Do Not Call laws by failing to adequately train employees, maintain written guidelines, maintain an internal company do not call list, and failure to regularly download the Federal Do Not Call List and use the current list to scrub phone numbers before calling consumers.


In the notice to Dynasty the FCC also made it clear that purchasing a scrubbed list from a lead broker or aggregator is not compliant under the law.



Additionally, the notice also emphasized that any permission given by a consumer to allow telemarketing calls must be evidenced by a signed, written agreement between the consumer and the calling company which states that the consumer agrees to be contacted by the calling company and includes the telephone number to which the calls may be placed and is non-transferable.



It also appears that many of the calls that were made by Dynasty to consumers were within state boundaries, commonly known as intrastate calls.



The Dynasty Mortgage forfeiture notice is likely to have a sweeping effect on the mortgage industry. “I think this case is a wakeup call to all the mortgage companies out there that thought the federal DNC laws didn’t affect them. This case shows that even companies that only conduct business in a local market within a single state need to comply with the federal guidelines,” said Barry Kaye, a Beverly Hills attorney that specializes in compliance issues for mortgage companies. “It’s a scary day for anyone that has relied upon buying “pre-scrubbed” leads since in and of itself this offers no protection.”



To date mortgage companies have been the leading industry players cited in the citations issued by the Federal government.

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