The Wisconsin Legislature is considering proposed legislation that will increase the penalties and fines for violation of Wisconsin’s No Call law. According to Sen. Jon Erbanbach, author of the original state law as well as the new proposal, the number one consumer complaint is violation of the No Call statute. Therefore, he supports increased penalties to discourage telemarketers who break the law from continuing to do so.
The original law, one of the first in the nation and predecessor to the federal laws, became effective January 1, 2003. The law regulates telephone solicitation – defined as the “unsolicited initiation of a telephone conversation for the purpose of encouraging the recipient of the telephone call to purchase property, goods or services.” In the field of real estate, telephone solicitation generally includes cold calling, calls to owners with expired listings, calls to FSBOs and calls to consumers referred by others. A telephone solicitor may not make a telephone solicitation to a consumer’s residence or cell phone if that consumer’s telephone number is included in the “no call” directory maintained by the Department of Agriculture, Trade and Consumer Protection. Under current law, violations are subject to a forfeiture of $100 per violation.
If the proposed legislation is adopted, and by all accounts it appears that such adoption is a virtual certainty, the penalty will increase to not less than $1,000 or more than $10,000 for each violation. In addition to the increased forfeitures, a person who suffers damages as a result of a violation of the law will be permitted to bring a civil action for injunctive relief and actual damages, or for $500 per violation, whichever is greater. Efforts have been on-going since 2004 to increase the penalties.
The Wisconsin REALTORS® Association has consistently opposed the increase in fines as being excessive. Rather, the WRA believes that if there are flagrant, repeat offenders who consider the lesser fines under the current law as nothing more than a cost of doing business, then the Legislature should consider a graduated fine schedule that penalizes the habitual violator. We have also expressed our concern that the ability to bring private civil actions will trigger increased complaints, even for innocent mistakes by REALTORS® and others.
Given the increase in potential liability, it is more important than ever to make certain REALTORS® are in compliance and do not unintentionally make a call in violation of the law. According to Sen. Erpenbach, the DATCP has done a good job in making certain that telemarketers always get warnings when they first violate the law and receive clear instruction on how to follow the law. Despite that assurance, what should REALTORS® make sure to do?
Different REALTORS® may need to adopt different measures to protect themselves. Brokers who do allow or require telemarketing by their agents may not be able to escape the telephone solicitation registration requirements and fees. Brokers who do not engage in cold calling or related practices may need to seek other precautions to avoid having their follow-up and closing preparation calls classified as telephone solicitations, subjecting the brokers to the same registration and fees as the brokers who do engage in telemarketing practices.
Brokers and real estate companies that market over the telephone may obtain a copy of the Wisconsin No Call list by completing the DATCP’s annual application form and paying the annual fees. REALTORS® should contact the DATCP by phone (608-224-4999), fax (608-224-4939) or e-mail (WINoCall@datcp.state.wi.us), or visit www.NoCall.Wisconsin.gov/web/home.asp to obtain a registration application packet. A client or customer on the no call list should not be called unless the call meets one of the telephone solicitation exemptions.
One way to protect REALTORS® who do not engage in cold calling but who do make followup calls and closing preparation calls is to find a reliable way to make sure these calls do not fall within the definition of a telephone solicitation. All REALTORS® should confer with their company legal counsel in developing the company’s policies on telephone solicitations. For example, the telephone solicitation definition does not include:
- A telephone call encouraging the call recipient to buy property, goods or services from a “nonprofit organization” unless sale proceeds are subject to Wisconsin sales tax or federal income tax. (Note: REALTOR® firms and companies are not nonprofit organizations.)
- A telephone call made by an individual acting on his or her own behalf, not as an employee or agent for any other person. This exemption does not apply to a caller who sells or promotes the sale of property, goods or services for others. (At first glance, this exemption might be encouraging, but if taken literally, most REALTORS® “sell or promote the sale of property, goods or services for others.”)
- A telephone call made in response to the call recipient’s affirmative request for the call. (This may prove to be the best option for most brokers who, after conferring with legal counsel, may insert language in all agency agreements and all broker disclosures to customer forms along the lines of “(Seller) (Buyer) requests but does not require Broker to telephone (seller) (buyer) regarding issues, goods and services related to the real estate transaction. This request will terminate at such time as Broker is no longer providing brokerage services to (seller) (buyer).”)
- A telephone call made to a current client. A current client is a person who has a current agreement to receive, from the caller or the person on whose behalf the call is made, property, goods or services of the type promoted by the telephone call.
- A telephone call made to a number listed in the current local business telephone directory.
- One telephone call to determine whether a former client mistakenly allowed a contractual relationship to lapse. (This type of call may be made by REALTORS® under these limited circumstances.)
- A telephone call made to determine a former client’s level of satisfaction, unless the call is part of a plan or scheme to encourage the former client to purchase more property, goods or services. (This type of call may be made by REALTORS® under these limited circumstances but requires caution – there is a risk of the call later being classified as a telephone solicitation if it is deemed to be part of a scheme or plan to sell.)
- A telephone call made to a party to an existing contract that is necessary to complete the contract. (This exemption may apply to calls a REALTOR® makes to the seller or the buyer regarding a listing contract or buyer agency agreement as long as care is taken to limit the conversation to tasks needed to fulfill the contract or agreement.)
For more information, visit the No Call REALTOR® Resource page at www.wra.org/nocall.
Kevin King is General Counsel for the WRA.
Published: 10/9/2009
