Is Cold Calling Legal?

Cold calling is a way for businesses to get in touch with potential leads. In today’s highly competitive world, businesses are willing to do whatever is necessary to make a sale.

While online shopping is more popular than ever, there’s a personal side to making a purchase. Hearing a voice on the other line or speaking to someone in person provides human interaction, a factor that many customers today still prefer.

Human interaction is a great way to build trust. If your business relies on B2B cold calling, you want to ensure that you aren’t running into any potential legal issues.

Here’s what you need to know about legal cold calling services.

Is Cold Calling Legal?

Maybe frustrating and annoying for some consumers, cold calling is not illegal. However, there are strict guidelines that determine when a company can and cannot call a consumer. For example, if a person has previously told your company to stop calling them, you must abide by their wishes.

Understanding the Telemarketing Sales Rule

The Telemarketing Sales Rule (TSR) is a set of regulations created and enforced by the Federal Trade Commission (FTC). The policy defines how businesses can legally use telemarketing to reach potential customers over the phone.

TSR was mostly created to protect consumers from unwanted telemarketing calls on their home or personal cell phones. The policy also enables certain law enforcement agencies to thwart telemarketing scams and fraud.

Additionally, TSR contains regulations that provide customers enhanced privacy protections against unethical callers.

Cold Calling Comes with Rules

When cold calling consumers, companies must follow strict rules and requirements. In fact, TSR contains various regulations that businesses must follow to be in compliance. 

This includes things such as:

  • Call-time windows
  • Disclosure requirements
  • Caller ID transmissions
  • Prohibited misrepresentations
  • Billing restrictions
  • Pre-recorded message restrictions
  •  Upsell requirements

And this list just scratches the surface of the many topics covered under TSR.

It’s important to note that most B2B cold calling is exempt from TSR rules. However, there are some exceptions to be aware of.

Is B2B Cold Calling Legal? What About B2C?

According to policies in TSR, a B2B cold call is allowed as long as the call is placed from one business to another. However, if a call is made to a consumer at their place of business, the call is not exempt. In fact, this type of call is illegal under TSR.

In the past, telemarketers have found creative ways to circumvent TSR rules, which is why calls like the one described above aren’t allowed.

If the business states that they’re not interested in the product or service that you’re selling, the call cannot go from a B2B call to a B2C call. When businesses decline what is being offered, all the standard TSR rules apply.

When making B2B calls, there are regulations to be aware of, including the FCC’s wireless dialing rules.

Under the Telephone Consumer Protection Act (TCPA), a wireless number cannot be dialed from an automated phone dialing system unless prior express written consent has been provided.

Because you cannot be certain that the number on your call list is an office phone or cell phone, or an office phone that directs to a cell phone, it’s better to be safe than sorry. Don’t risk a B2B cold call if you aren’t sure of the receiving phone type.

State Laws Apply as Well

TSR and TCPA protect consumers from unwanted and illegal cold calls at the federal level. However, several states also have their own rules that apply to telemarketing and cold calling.

If you’re making calls across state lines, you could be in double trouble. Not only could you be breaking laws in your state but laws in the receiver’s state as well. Local jurisdiction regulations may apply as well.

Be sure to thoroughly research each state’s laws to avoid getting into a very sticky legal situation.

The National Do Not Call Registry

The National Do Not Call Registry was designed to give consumers a choice as to whether they want to receive calls from telemarketers. The list applies to area codes in all 50 states, the District of Columbia, and U.S. territories.

Calls not covered under the registry include calls from:

  • Charities
  • Political organizations
  •  Telephone surveyors
  • Companies that have an existing business relationship with a consumer

Be aware that it’s illegal for a telemarketer to call any number on the National Do Not Call Registry. Companies and sellers must access the registry and pay any required fees before making calls. Violators are subject to fines up to $43,792 for each violation.

Top 5 Rules to Know

is cold calling legal

There are a lot of legal rules and regulations when it comes to cold calling. While your company needs to be well-versed in every law or regulation that applies to your telemarketing actions, there are some foundational rules that every cold caller needs to be aware of.

You must establish your identity first

Instead of rushing to your sales pitch, make sure that all your cold call scripts begin with an introduction. Legal cold calls must start with who you are and why you’re calling. During the first two minutes, callers must share:

  • Name
  • Company they’re representing
  • Purpose of their call
  • Phone number and/or address if requested

There are set times to call

Legal cold calls can only occur between the hours of 8 AM and 9 PM, seven days a week. However, this timeframe only applies if the call receiver isn’t a current client or customer. The timeframe is also waived if the customer has stated that the caller can contact them at any time.

Be aware of do not call lists

All security firms, and many other types of businesses, must maintain a do not call (DNC) list. If a customer signs up for a DNC, cold callers must respect their wishes. Calling a consumer who is on a DNC can file a formal complaint with the company, regulators, the state, and the Securities and Exchange Commission (SEC).

Never collect funds over the phone

In the age of phone scams, customers are extremely cautious when providing financial information over the phone. If your cold call results in money being taken out of the customer’s (call recipient’s) bank account, written approval is required. 

However, you’ll find that most clients are unwilling to provide their banking information during the phone call. Consumers have come to expect that reputable companies have other safer means of collecting money.

Honesty is expected

The SEC expects that all cold callers are honest. There is a huge difference between misleading marketing and good marketing, especially when it comes to cold calls. Always be truthful with call recipients.

Final Thoughts

Cold calling is a great opportunity to expand your horizons and to get more solid leads for your business. However, if used improperly, cold calling can venture into illegal territory that can cost you tens of hundreds of dollars.

For cold calling success, reach out to the team at Leads At Scale. We’re experts in helping B2B companies generate well-qualified leads so that they can grow their business. 

Contact us today to get an estimate or request a demo.

John Dubay

John Dubay is the Managing Partner at Leads at Scale, an outsourced sales support company that helps B2B companies generate well-qualified leads at scale, ready to be closed.

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