Cold Calling Compliance in the US: A Guide for Businesses

Cold calling remains one of the most direct and effective sales strategies, but it also comes with legal and regulatory responsibilities. In the United States, businesses that engage in cold calling must comply with federal and state laws aimed at protecting consumers from harassment, fraud, and unwanted solicitations. In this blog post, we’ll break down the key laws and regulations governing cold calling practices in the U.S. and provide actionable tips for staying compliant.

1. The Telephone Consumer Protection Act (TCPA)

At the heart of cold calling compliance is the Telephone Consumer Protection Act (TCPA), a federal law that regulates telemarketing calls, prerecorded voice messages, and automated telephone dialing systems (ATDS, as defined in the TCPA). Originally passed in 1991, the TCPA has been updated over time to address new technologies and consumer concerns.

Key TCPA requirements:

• Do-Not-Call (DNC) Registry: Companies must respect the national Do-Not-Call Registry. If a consumer registers their number on the national DNC Registry, businesses cannot call that number for telemarketing purposes, unless the consumer has provided prior express written consent to or has an established business relationship with the business. Violating this rule can result in significant fines.
• Call Time Restrictions: Calls can only be made between 8 a.m. and 9 p.m. local time of the recipient.
• Identification Requirements: When making cold calls using artificial or prerecorded voice, telemarketers must identify themselves and the company they represent at the beginning of the call.
• ATDS Calls and Pre-Recorded Messages: If using an ATDS or pre-recorded voice messages, telemarketers must follow additional rules, including obtaining prior express consent, providing an easy way for consumers to opt-out, identifying themselves and the company they represent at the beginning of the call, and providing their telephone number and/or address.

2. The National Do-Not-Call Registry

The National DNC Registry, maintained by the Federal Trade Commission (FTC), allows consumers to opt out of unsolicited sales calls. As a business, it’s essential to scrub your calling list against the national DNC Registry before making any calls to ensure you’re not contacting consumers who have opted out.

Important rules for national DNC Registry compliance:

• Scrubbing Lists: Businesses should scrub their call lists against the national DNC Registry. This means removing any numbers that appear on the registry from future cold calling lists.
• State Do Not Call Lists: In addition to the national DNC Registry, numerous states have their own DNC lists. Companies should adhere to both national DNC Registry and state DNC list requirements when making calls.
• Third-Party Data Providers: Many businesses purchase subscriptions to third party data providers. Before importing, integrating, or calling prospects from these providers, it’s important to verify whether the individuals on the list have consented to be contacted and whether these providers remove prospects listed on the national DNC Registry and state DNC lists.

3. The Telemarketing Sales Rule (TSR)

The Telemarketing Sales Rule (TSR), enforced by the FTC, is another key regulation that governs telemarketing and cold calling. The TSR aims to protect consumers from deceptive and abusive telemarketing practices, including high-pressure sales tactics, fraudulent schemes, and unsolicited offers.

Key provisions of the TSR:

• No Misleading Claims: Telemarketers must not make false or misleading statements about products or services. For example, misrepresenting the cost, benefits, or terms of an offer is prohibited.
• Do-Not-Call Violations: As mentioned earlier, telemarketers must comply with the national DNC Registry and also ensure they are not calling consumers who have asked not to be called again by the telemarketer.
• Unconventional Payment Methods: If a consumer agrees to purchase something during a cold call, telemarketers cannot accept payment using an unconventional payment method without first receiving verifiable authorization from the consumer for the sale or providing written confirmation of the sale to the consumer.  Payments by credit and debit cards are not subject to this restriction.
• Prohibited Payment Methods: Telemarketers are not allowed to request payment by certain methods, such as remotely created payment orders, remotely created checks, cash-to-cash money transfers, and cash reload mechanisms. These payment methods are often associated with fraud.

4. State-Level Regulations

In addition to federal laws, many states have their own telemarketing laws that govern cold calling. These laws often extend beyond the federal regulations and may impose stricter rules on telemarketing practices.

Some common state-level regulations include:

• State Do-Not-Call Lists: As noted, states like Florida, Texas, and California have their own DNC lists, which require businesses to maintain compliance with both state and federal laws and regulations.
• Caller ID Rules: Certain states have laws that prohibit the display of misleading caller ID information and/or require telemarketers to display particular information on the recipient's caller ID, such as their correct business name or phone number.

It’s important for businesses to research and understand these and other kinds of telemarketing laws in each state they operate, especially if they are calling consumers across multiple states.

5. The Truth in Caller ID Act

The Truth in Caller ID Act makes it illegal for anyone to display misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.

Telemarketers must ensure that the information displayed on the recipient's caller ID is accurate. This law was implemented to combat fraudulent schemes where scam callers impersonate legitimate businesses.

Calling in Nooks is compliant and Nooks is not considered an ATDS, because:

• Nooks does not utilize a random or sequential number generator to store or produce numbers for dialing (or for any other purpose)
• Tools are available to restrict calls to permissible calling hours
• There’s full traceability of calls, linking each number dialed to the corresponding user
• There is no number spoofing to maintain transparency
• No prerecorded messages are played to live prospects
• Users can manage and honor opt-out requests, ensuring no further contact is made with individuals that don’t want to be called

Conclusion - Calling Compliantly

Here’s our recommendation on configurations within Nooks and best practices to help your team stay compliant: 

• Ensure that your data providers automatically remove prospects from National DNC Registry. 
• Include your name, company name, and reason for call in your call opener.
• Use the state-level call recording features to ensure that you are being compliant with call recording
• If a prospect lets you know they don’t want to be called, thank them for their time politely and properly disposition them so they are ‘opted-out’.
• Include privacy notices wherever is necessary on your website, digital forms, and other areas where you capture your prospect information. 
• Ensure compliance with call recording consent requirements, which vary by state.  Nooks has administrative controls for managing call recordings by area code, by country, and by limiting recordings to what the sales rep is saying.
• The following 3rd party data providers are recommended if using the Nooks Numbers feature: Zoominfo, Cognism, and Apollo (these are links to each platform's Do Not Call Registrar capabilities).

*The information contained in this document is provided for informational purposes only, and should not be construed as legal advice on any subject matter. Please conduct your own legal assessment (including of state laws, some of which also impose licensing requirements on certain types of telemarketers and kinds of calling activity) before engaging in cold calling