Many real estate professionals – agents, brokers and investors – have embraced the use of the telephone when contacting homeowners facing foreclosure. Here’s the question: How compliant are you with state and federal rules? Do you know some of the issues you’ll need to think about before making your first call?
Before putting together a winning script you’ll use to convince distressed homeowners that you can offer effective foreclosure avoidance strategies, it’s crucial that you have at least a working familiarity with potential legal pitfalls. Here are some things to keep in mind.
Do You Have to be a Licensed Real Estate Agent in Order to Call?
Because of the patchwork of state laws in existence, it’s crucial that you be able to wrap your head around the laws in your state. Some states have passed legislation requiring that you be a licensed real estate agent in order to call homeowners in any stage of the foreclosure process. This effectively means that unlicensed real estate investors are prohibited from calling. You’ll need to check state laws in your state in order to comply with applicable laws.
National Do Not Call Registry
Millions of homeowners have opted out of marketing calls by signing up for the National Do Not Call List (and related state Do Not Call registries). Real estate professionals sometimes assume that they’re exempt from these rules. Unless you have an existing business relationship with a person, you have to scrub any calling list against federal and state calling registries. One of the best ways to comply with these rules is to purchase pre-scrubbed foreclosure leads or to manually scrub your leads against these databases. Important note: Purchasing pre-scrubbed leads doesn’t absolve you of legal responsibility for anyone you call. Before you let your fingers do the walking, make sure the talking you’ll do will be with people who haven’t explicitly said “thanks, but no thanks”.
Hours You Can Call
Marketing calls are only permitted during certain hours of the day. National calling rules require that you call only between the hours of 8 AM and 9 PM, although some states have more stringent calling requirements. Again, check the law in your state before picking up the phone and making your first call.
The one step most real estate professionals miss with marketing calls is the Telephone Consumer Protection Act. These rules require that anyone making marketing calls:
- State their name;
- Their business name;
- The nature of the offer (in the case of foreclosure calls, what you want from them);
- Full disclosure of any costs; and,
- Customer service information
One of the most important aspects of TCPA is the TCPA close. In short, it requires you to say something like, “Thanks for talking with me. If you have any questions about this call, you can call (your number). Have a great day!”
Here’s an important TCPA consideration: If you get your prospect or a household member on the phone and you give your name, your business name or begin explaining the reason for your call, the law requires that you give the TCPA close in its entirety even if they hang up on you. Give the required TCPA close even if it sounds like your prospect has hung up on you. To do otherwise is to risk being fined for failing to comply with the terms of the law.
You may determine that the telephone is the fastest, most effective means of reaching property owners in foreclosure. If this is the case, it’s imperative that you familiarize yourself with all applicable rules surrounding calling. While you might not think of yourself as a telemarketer, most states treat marketing-related calls as telemarketing, and fines for non-compliance can quickly add up.
Do you use the telephone when marketing to foreclosure prospects? If so, how compliant are you with legal requirements?