Cold Calling

A representative wants to call a current customer with whom the firm has an established business relationship to discuss a new product idea. Does this call require the same Do-Not-Call Registry check as a cold call to a prospect?

1. A.Yes, every outbound call requires an identical Do-Not-Call Registry check regardless of any existing relationshipWrong. This misses the established business relationship exception that generally applies to such calls.
2. B.Not necessarily -- an established business relationship exception generally applies, though the firm's internal do-not-call list for that customer should still be honoredCorrect. The established business relationship exception changes the Registry analysis, though internal do-not-call preferences still need to be respected.
3. C.No, established customers are entirely exempt from all telemarketing-related considerationsWrong. This overstates the exemption; internal do-not-call preferences can still apply even to established customers.
4. D.Yes, but only because the call involves a new product rather than an existing oneWrong. The subject matter of the call is not what determines whether the Do-Not-Call Registry check exception applies; the existing relationship is.

Why: Calls to a party with whom the firm has an established business relationship generally fall within a recognized exception to Do-Not-Call Registry restrictions, though the firm's own internal do-not-call list preferences for that customer should still be honored. The principal should not treat every outbound call identically without considering this distinction.

A firm's compliance policies describe telemarketing supervisory procedures as applying only to staff at the firm's dedicated outbound call center, on the theory that individual representatives making occasional cold calls from their own desks are not really "telemarketers." Is this scope limitation appropriate?

1. A.No — any associated person placing solicitation calls is subject to the firm's telemarketing compliance procedures, regardless of whether the calls are made through a dedicated call center or by an individual representative from her own desk.Correct. Telemarketing obligations apply to any associated person placing solicitation calls, regardless of organizational setup.
2. B.Yes, because telemarketing compliance obligations apply only to functions specifically organized and staffed as a dedicated calling operation.Wrong. This is exactly the scope-limiting misconception the scenario is testing.
3. C.No, because only representatives who make cold calls as their primary job function are subject to telemarketing procedures, while incidental cold calling by other representatives is exempt.Wrong. This invents a primary-function-based exemption that does not limit the obligation this way.
4. D.Yes, but only for firms above a certain size; smaller firms without a dedicated call center have no telemarketing supervisory obligations at all.Wrong. This invents a firm-size-based exemption from telemarketing obligations generally.

Why: Any associated person placing solicitation calls is subject to the firm's telemarketing compliance procedures, regardless of whether the calls are made through a dedicated call center or by an individual representative from her own desk.

A firm has a principal-approved telemarketing script and instructs representatives to use it for all cold calls. The principal has never listened to or reviewed any actual recorded calls to confirm the script is being followed as written. What is the concern?

1. A.Approving a script is not sufficient on its own; the principal should also have some means, such as reviewing recorded calls or other monitoring, to confirm that representatives are actually following the approved script in practice, since an approved script that goes unmonitored provides no assurance about what is actually being said on calls.Correct. Script approval alone provides no assurance without some means of confirming actual adherence in practice.
2. B.There is no concern, since an approved written script fully discharges the firm's supervisory obligation regarding what representatives say on telemarketing calls.Wrong. This treats script approval alone as sufficient without any verification of actual use.
3. C.The concern is that the script itself must be rewritten, since scripts alone are never an acceptable telemarketing compliance tool.Wrong. This misidentifies the issue as the script's content rather than the absence of monitoring for adherence to it.
4. D.The concern applies only if a customer complaint is received alleging the script was not followed; absent a complaint, no monitoring is necessary.Wrong. This makes monitoring contingent on a complaint rather than being a proactive supervisory practice.

Why: Approving a script is not sufficient on its own; the principal should also have some means, such as reviewing recorded calls or other monitoring, to confirm that representatives are actually following the approved script in practice, since an approved script that goes unmonitored provides no assurance about what is actually being said on calls.

A firm wants to send marketing text messages to prospective customers' cell phones using an automated bulk-texting platform, relying on the same Do-Not-Call Registry check the firm already performs before making live cold calls. Is checking the registry sufficient before beginning this text campaign?

1. A.No — sending autodialed or prerecorded marketing messages to cell phones generally requires the recipient's prior express written consent, an opt-in requirement that is separate from, and not satisfied by, the opt-out Do-Not-Call Registry check used for live calling.Correct. Automated texting to cell phones is generally governed by a separate opt-in consent requirement, not the opt-out registry check.
2. B.Yes, because the Do-Not-Call Registry check governs all outbound marketing contact regardless of the channel or technology used to deliver it.Wrong. This treats the registry check as fungible across channels, missing the separate opt-in consent requirement for this method.
3. C.No, because automated bulk-texting platforms are prohibited outright for any marketing purpose regardless of consent obtained.Wrong. This overstates an absolute prohibition rather than a conditioned consent requirement.
4. D.Yes, but only if the prospective customers are also on the firm's list of existing customers with an established business relationship.Wrong. This misapplies the established business relationship concept, which relates to live telemarketing calls, to a different consent-based requirement for automated texting.

Why: Sending autodialed or prerecorded marketing messages to cell phones generally requires the recipient's prior express written consent, an opt-in requirement that is separate from, and not satisfied by, the opt-out Do-Not-Call Registry check used for live calling.