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A rising listing of states are strengthening their telemarketing legal guidelines partly as a result of a Supreme Courtroom ruling, Fb v. Duguid, that in 2021 considerably narrowed the definition of an automated phone dialing system, also called an ATDS or auto-dialer, underneath the Phone Shopper Safety Act.
The TCPA prohibits the use of auto-dialers to contact customers with out their consent, the regulation agency Eversheds Sutherland defined. When the courtroom narrowed the federal definition, some states took issues into their very own arms. Others expanded their legal guidelines to cowl texting.
“Most of the new and amended state legal guidelines have broader definitions of ATDS than does the TCPA, and lots of states impose different distinctive restrictions for speaking through telephone and textual content,” the regulation agency Eversheds Sutherland wrote in a latest alert.
Plaintiffs can deliver claims underneath many of those legal guidelines along with, or along with, claims underneath the TCPA, in keeping with Eversheds.
Finest Practices for Advisor Communication
Lewis Wiener, companion at Eversheds, stated that brokers and advisors ought to “observe finest practices” when calling prospects. “Know who you’re calling,” Wiener stated, and “know whether or not you’re calling a landline or cellphone. If there’s any doubt, assume you’re calling a cellphone.”
The TCPA, Wiener continued, “was designed to restrict, by means of the consent requirement, the power of telemarketers to name folks on their cell telephones. Since landlines have been billed otherwise — and usually a lot decrease — the restrictions on calls to landlines usually are not as stringent.”
Additionally, “scrub your numbers in opposition to the federal, state, and company-specific Do Not Name lists and get consent upfront,” Wiener suggested.
SEC Advertising Rule
Issa Hanna, companion at Eversheds, added Monday in an e mail that funding advisors not solely threat working afoul of state legal guidelines but in addition violating the Securities and Alternate Fee’s Advertising Rule when telemarketing their providers.
“Whereas oral communications are typically excepted from the primary prong of the definition of ‘commercial,’ there’s an exception to that exception for advisors’ scripted oral communications that embrace presents of advisory providers,” Hanna stated.
Furthermore, Hanna continued, “oral communications that qualify as compensated endorsements or testimonials are additionally throughout the scope” of the SEC’s advertising and marketing rule.
Additional, “textual content messages that embrace presents of advisory providers are deemed to be ‘in writing’ and due to this fact throughout the scope of the primary prong of the definition of commercial,” Hanna stated.
Backside line: “The SEC will anticipate compliance with the Advertising Rule with respect to telemarketing communications which might be ads underneath the rule,” Hanna relayed.
See the gallery for the states which have enacted new “mini-TCPAs” up to now few years, as defined by Eversheds.
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