S3 E32: Telemarketing in Texas Just Got Riskier

Audio version

Telemarketing in Texas Just Got Riskier

Download the Texas SB 140 Compliance Checklist

Transcript

Jordan Eisner  
All right, good. All right, here we are. Another episode of Compliance Pointers. This one hot off the press. Can’t wait to be released. We got changes going into effect, I think, less than a week from now. And I’m joined by Kevin Mayfield here to tell us about Texas. What is it? SB 140. SB 140 sounds like a viral strain of something. SB 140, but Texas changes around telemarketing and you’re going to give us some insight and some tips on that. Maybe not a lot has changed, but.

Kevin Mayfield  
SB 140, yeah.

Jordan Eisner  
How they’re going to be enforced is what really has changed. And so for our listeners and our viewers, Kevin Mayfield is a 10 plus year consultant here at CompliancePoint. I think your official title is Managing Consultant. Is that right, Kev?

Kevin Mayfield  
I think A. manager of Marketing Compliance, something like that.

Jordan Eisner  
Manager of Marketing Compliance, the whole division.

Kevin Mayfield  
Yeah, I don’t. I don’t really like to get caught up in titles, Jordan.

Jordan Eisner  
But uh, so Kevin works in our marketing compliance group, which a lot of people follow compliance might probably know. It’s our origin story really. And that’s operational advisory consultative services around.
The various what we call direct marketing or direct to consumer or telemarketing laws in the US. And a lot of times, you know, people think, well, that doesn’t really apply to me. I’m not a telemarketer, but the definitions are pretty broad.
Text messaging, calling B2B, B2C, wireless, auto dialers.

Kevin Mayfield  
Even taking inbound calls, taking inbound calls, selling A. product, you’re you’re A. telemarketer.

Jordan Eisner  
Inbound calls. That’s right. Whole number of things. So Kevin’s been in it for more than a decade. Um. And given the nicheness of this area of expertise, I’d say that he’s probably one of the top.
Marketing compliance experts in the world.
I think you could say that.

Kevin Mayfield  
OK.
Yeah, you could probably say that.

Jordan Eisner  
And it’s also, it’s also important to know about Kevin, for our listeners and our viewers. And he loves it when I say this. He’s the only recipient in compliance point history of the Brad Pitt Award. And now you can, you can decide what that means for yourself.

Kevin Mayfield  
I think my Brangelina, my Brangelina days are over.

Jordan Eisner  
You can decide what that means for yourself as a listener or viewer, but you know it’s not a bad thing.
I continue to bring that up just because I’m jealous, obviously, that you got that award, but we better get to, we better get to the topic at hand. SB 140. So two of my favorite things, you Kevin Mayfield and Texas, the state of Texas.
What are they doing? Why are they changing the telemarketing law? What’s changed? Walk our listeners and our viewers through that first.

Kevin Mayfield  
Good thing. Thanks, Jordan. So, yeah, I think the important thing to note here is that, you know, very little has changed as far as the rules go. Yeah, the, the, the telemarketing rules in the state of Texas are are basically the same. They they made some minor changes like saying that.
Text messages or or video text messages and so forth are gonna are now gonna be considered calls. But from A. federal perspective, I mean, we’ve always said that you should be treating all texts as calls. So I mean that’s that’s really.
A non-issue as far as we’re concerned.

Jordan Eisner  
But that’s contrary. I know you’re going to keep going on on the Texas law, but that and that’s always been my understanding. Text messages are calls and maybe I’m saying the wrong name for this, but the is it the McLaughlin ruling? And I know I’m bringing another topic in and I’m throwing it on you. I’m really testing your world-class marketing compliance knowledge here, but.
That decision was different than what was typically seen. Is this Texas clarification around texting being calls in response to that, or is that just coincidence?

Kevin Mayfield  
Yeah, I think you’re talking about McLaughlin rule from a federal perspective means that the courts can decide whatever they want. We’ve seen some courts go the opposite direction on text messages and say they aren’t calls. But I think if you’re going to operate in that manner, that is A. high risk.
Kind of activity and we would not recommend that. But I mean, Texas is basically making it official, right? They’re saying that texts are calls, so that’s not going to fly in Texas.

Jordan Eisner  
Yeah, OK. Keep going on it. Sorry with the with the proposal, some of the others.

Kevin Mayfield  
OK, no problem.
Yeah. So, so again, very little change to the actual telemarketing rules in the state of Texas other than the text message thing. What has changed is the enforcement method. So prior to September 1st, all enforcement or or the majority of enforcement is handled by state regulators.
You know, after September 1st we got private right of action becomes available for all state telemarketing violations. So you’re talking about those are going to match the TCPA fines, so statutory penalties of $500 per.
Violation up to $1500 if you’re doing it knowingly or willingly. And of course any plaintiff worth their assault is going to claim that if you did it, you knew you, you knew you were doing it. So. So they’re going to go for $1500 per. So we’re talking, you know, private lawsuits.
Demand letters, class actions. I mean, when we see enforcement move from the state regulator to private right of action, I mean, you’re talking about the risk level increasing, I don’t know, 100 fold.

Jordan Eisner  
Right. And we say that because of what we’ve seen with the TCPA and the private right of action and just the amount of lawsuits claiming that over the years.

Kevin Mayfield  
And we saw it in Florida too. You know, when Florida tried to do something similar, really broaden the definition of an autodialer in Florida and make those subject to private right of action, we saw this, those lawsuits just explode.
I mean, there were thousands of them in A. matter of months. So you know, as A. result, Ford ended up kind of walking their deal back and saying, hey, well, maybe we went A. little bit too far beyond the pale here. So I mean.
Potentially that could happen in Texas, but as we sit here, there’s no way to know that and I wouldn’t count on it.

Jordan Eisner 
OK. And did you mention the date? So this is effective?

Kevin Mayfield  
September 1st. So yeah, just A. few days away.

Jordan Eisner  
And one of the things now that.
You can claim, I don’t know the legal term claim damages about and put together a class action or private right of action around is whether or not somebody is registered as a telemarketer in the state of Texas. And that’s we don’t see that.
Have we seen that in any other state where?
That can be claimed.

Kevin Mayfield  
No, generally we view telemarketing registration as A. A. little risk thing because you got to get on the kind of the state ages, you know, radar for enforcement there. But in Texas it’s A. little bit different, you know, being subject to private right of action.
Texas makes it really easy to go online and and determine if you are registered as A. telemarketer, you know, for these professional plaintiffs. And it’s important to note too, that in Texas the exemptions, there’s there’s seven or eight of them.
Maybe 10 available exemptions, but they only apply to sellers. So if you’re like A. third party BPO, third party call center, you only have one available exemption to you.
To claim that exemption from telemarketer registration. The rest of them are only attributable to sellers. So some of the common ones, you know publicly traded companies, if you’re publicly traded, if you’re A. seller, you would be exempt. Now if you’re publicly traded, call center third party.
Call center, that one doesn’t apply to you, right? But public traded companies, companies that call current or former customers. So this is not an exemption where just any EBR would exempt you from registering as A. telemarketer.
If you’re calling prospects, you’re calling with express written consent, that sort of thing, that’s not necessarily going to exempt you if you’re calling someone other than current or former customers. So there’s there’s several others, but those are the 22 broad ones, the publicly traded and the current and former customers, I’d say.

Jordan Eisner  
And I understand that, you know, Texas and companies being registered there, they’re already behind I think like a couple of months in terms of getting people registered and maybe that’s not something you’re too familiar with. I know we have a different group that handles telemarketer registration, but that’s what we had heard from the manager of that group and.
You’re going to have all these other companies flooding in probably to try and get registered, even if they think they might be exempt. You know, a consumer’s not going to always know laws and what’s a legal telemarketing call and where somebody might be exempt. They’re just they’re getting a call.
It’s to try and sell them something that’s on their phone. They’re gonna look up and if that company’s not registered, they’re gonna put a complaint against them.

Kevin Mayfield  
People definitely complain about perfectly legal calls for sure.

Jordan Eisner  
Yeah. So maybe you have touched on why these changes are significant and we’ve definitely talked about what the changes were or weren’t really. What’s your recommendations for companies right now that are scrambling? And there’s a lot of them, you know.
We’re getting a lot of inquiries, seeing a lot of buzz out there.

Kevin Mayfield  
Yeah, well, I think is.

Jordan Eisner  
That are calling into Texas and around registration around their their processes, the controls are putting in around this. What are what are some quick hitters or tips that you would say to those companies that can be sound bites in this podcast later on?

Kevin Mayfield  
Yeah, well, I think it’s important to they just know the rules, right? They know the state rules when it comes to telemarketing. So for example, the calling times in the state of Texas are stricter than the federal calling times. You can only call 9:00 AM to 9:00 PM Monday through Saturday.
Believe it’s noon to 9:00 PM on Sunday. Now, if you’re calling people you got a relationship with, those call those, you’re exempt from those stricter times. But if you’re calling people that you don’t have an established business relationship with, then you should be abiding by those.
Texas also has a stricter established business relationship EBR time frame for do not call. So from a federal perspective you’re getting 18 months from a for a prior transaction.
If someone’s on the do not call list in Texas, you’re only getting 12 months. Now, somebody might argue that if you’re only on the state or only on the federal do not call list in Texas, that that you still get 18 months. I mean, it’s probably not the safest course of action to take.
That approach, but certainly Texas has their own state do not call list and if you’re on that do not call list, you should certainly be abiding by that 12 month rule because 100% that’s going to apply and we see very little.
We’ve done some analysis between state and national do not call lists. And you know, for the most part, if you’re on one, you’re on the other.
But a lot of companies will just say, well, they’ll just assume the 18 months, right? They don’t. They don’t check any do not call lists. They’ll call for 18 months after a transaction. Well, if you’re taking that approach, then you definitely need to be cutting that back to 12 months in the state of Texas.
The other kind of weird thing in Texas is their their rules around calling wireless numbers. So Texas states and this is regardless of dial method. So unlike at the federal level we we.
Talk about calls with an ATDS and and so forth. They prohibit calls to wireless numbers. Any call to a wireless number if you’re telemarketing trying to sell something.
If it’s a wireless phone and you know or you should have known that that person is being charged for the call. So we’re certainly going to see plaintiffs that are going to argue, oh, hey, it’s a wireless number. Of course you should have known I’m, I’m charged for the call.
Most people don’t have those types of of calling plans, but professional plaintiffs do on purpose. Now you’re if you’re calling with consent that you’re exempt from that that requirement, but Texas doesn’t define what consent means.
So yeah, just to make things, just to make things simpler. So you know, if someone’s a current customer of yours and they gave you their telephone number during the normal course of business, is that consent enough to be calling their wireless number to on a telemarket?

Jordan Eisner  
I didn’t know that.

Kevin Mayfield  
Marketing call, that’s probably we’re probably going to see that play out in the Texas court system and we’re probably not going to know the answer to that until until that happens. Um.

Jordan Eisner  
What do we recommend? Our clients get expressed written consent.

Kevin Mayfield  
I mean, certainly that’s the safest course of action. The most conservative approach in Texas, even if you’re manually dialing, is going to be to only dial those numbers, you know, where you’ve got expressed written consent. Anything outside of that is going to be a business decision on your part, and it’s not going to be without risk.

Jordan Eisner  
Yeah, I just while you were talking, I I googled how many people are in Texas. I knew it was a lot as of 2024 is just under 32,000,000, so about 10% of the country. So I always say it if it’s, if it’s California, if it’s Texas, if it’s New York.

Kevin Mayfield  
Yeah, and another interest.

Jordan Eisner  
And they’re applying state specific law in a way it really does affect.
The whole country in terms of businesses and where they operate because you’re probably market, especially when it’s direct to consumer marketing type law, you’re marketing into Texas and if you’re not, you’re avoiding a pretty big revenue stream.

Kevin Mayfield  
Yep, another interesting twist on it is that they have their own definition of an automatic dial announcing device.
So when we when we typically think of a dads, we think of pre-recorded messages, right?

This their definition you because you could say, OK, well I’ll just call landlines in in in Texas. I won’t worry about this wireless thing and I’ll just call call landlines. The definition of an ADAT is equipment used that can store telephone numbers.
To be called and convey alone or in conjunction with other equipment, a prerecorded or synthesized voice message. So when we think about.
Predictive dialers, right? They have the capacity that to send pre-recorded messages because you’re when you’re abandoning calls, you have to leave a pre-recorded a pre-recorded message.
Right. So you know if your system can store telephone numbers and use pre-recorded messages, then you are using an ADAD in Texas and.

Jordan Eisner  
Right.
Do they have registration requirements for ADADS in Texas?

Kevin Mayfield  
But you’re going deep in the weeds on me, Jordan. I think they, I think they do. I think they do.

Jordan Eisner  
Yeah, there you go. Even more complicated.

Kevin Mayfield  
Yeah, yeah, that’s right.

Jordan Eisner  
Yeah, well, it will be interesting to see.

Kevin Mayfield  
Yeah, for sure.

Jordan Eisner   18:06
What happens? I mean, it’s not gonna be quick, but next week it’s it’s not just effective, it’s enforceable, right? Or is it? Yeah, OK.

Kevin Mayfield  
That’s right. That’s right. I mean, we’ll probably see plaintiffs that wait for calls to stack up, right? You know, to make larger claims and and things of that nature, but.

Jordan Eisner  
Sure.

Kevin Mayfield  
I suspect that over the next few months we’re going to see quite a quite a number of lawsuits in Texas surround this.

Jordan Eisner  
So if you had to really sum it up.
And you had 30 seconds to make recommendations for companies calling into Texas. What would he?

Kevin Mayfield  
You know, make make your folks aware of the changes of these changes around enforcement. Make them aware of the rules. So you know the calling times, for example. And you got to remember to El Paso is in the Western time zone, so you can’t treat Texas as one one time zone necessarily.
And definitely train folks on if someone says.
Hey, every time you call me, I’m having to pay for this call and hangs up on you, right? I mean, you got them on a recorded line saying that there’s no getting around arguing that that you knew they were being charged for the call and those should be marked as do not contact and then prohibit.
The use of aid ads in in the state of Texas, unless you’ve got the proper level of consent to do so, you know, anything short of that’s just going to create too much risk in my opinion.

Jordan Eisner  
OK, So what I heard is be aware of the laws.
Put controls in place with your systems to honor calling time restrictions. You know, take a good hard look at what sort of consent you’re getting if you’re gonna be calling cell phones.
Consider if your system meets the definition of an ADAD.

Consider the cost benefit analysis of just registering, even if you feel like you might have exemptions, just based on the fact that it can be looked up and it might just be a good thing to do, OK.

Kevin Mayfield  
Not a terrible idea.

Jordan Eisner  
All right. Well, I think that’s very helpful. And thank you for your time this morning, Kevin. And I would say to our audience, our subscribers, whatever, whatever you call them, whatever you refer to, I always say viewers and listeners a lot. I need to summarize it into one word, but we appreciate you.
Listening and watching obviously and and if you have questions around this law, please contact us connect@compliancepoint.com. Come to our website, there’s plenty of resources there, probably a lot published by Mr. 10 Year Plus marketing compliance expert himself, Kevin Mayfield.
And and other consultants on our team, we sent out, Yep, we’ve got a checklist on our website. I’m sure there’ll be a link to this in the in the description of this podcast. There’ll be a link to that checklist. It’s pretty, it’s pretty high level, but it’s a good thing to look into and I think you reiterate reiterated some of those points there Kevin, but.

Kevin Mayfield  
Yeah, I think we got that checklist too, right? We got the the Texas check.

Jordan Eisner  
We welcome any questions, inquiries or concerns about this law and for your business in particular and and would be happy to talk about how we can help or support.
Till next time, we got to get you on another race, Kevin.

Kevin Mayfield  
Thank you.
All right, you got it.

Jordan Eisner  
All right. Be well, everybody.