Readers who responded to the June 1 article What you don’t know Can Bankrupt your Company overwhelming asked the same questions, “Can I be personally fined?” and “What should I do if my company doesn’t take the DNC laws seriously?”

In regard to the first question, yes – you can be fined personally, as well as your company.  As for the second, you should seriously consider a job change. 

The federal government formally established the Do Not Call registry in December 2002 and launched it in June 2003 with joint enforcement from the Federal Trade Commission (FTC) and Federal Communications Commission (FCC).  The same laws that govern telemarketing practices also apply to mortgage originators. 

The fact is that while the laws were originally enacted to regulate telemarketing firms, they regulate all individuals and companies utilizing the telephone for sales purposes.  As a result, mortgage companies are essentially required to change the way they conduct business…even if they don’t make traditional cold calls.

Let’s look at an example.  Your buddy Joe Realtor is working with a client.  He tells that client you can give him a great rate and passes the client’s information along to you.  You call that client.  The client’s phone number is listed on the DNC list.  For whatever reason – they weren’t paying attention when Joe mentioned you, they are simply in a bad mood, or maybe they thought they should have got a better rate – they report you.  Unwittingly, you have just opened yourself and your company to an $11,000 fine.  And if you called that person twice, make that $22,000.  Not to mention that the customer can also sue you.

You need to take this seriously, because the federal government certainly does.  40% of the DNC citations issued by the FCC were to mortgage companies.  That’s pretty darn significant when you think about all the industries using the telephone during some phase of the sales process. It also speaks volumes about the lack of education and information being disseminated within the industry.

Oh, you’ll always have a few people that are hell-bent on breaking the law, but most mortgage companies – the vast majority of the ones we heard from - aren’t reacting because they don’t know anything about these laws.  Or, they think they’re in the clear because they don’t make traditional cold calls.

“The fact is that whether you’re calling a referral from a friend, past client, or realtor, you absolutely need to have your SAN and use it to run every phone number against the DNC registry,” says Compliance Attorney Barry Kaye.

And that’s just the beginning.  Industry experts indicate that there are actually eight steps your company needs to take to be fully compliant.  You need to get your SAN (Subscription Account Number), enact a compliance policy, train your employees, keep records of inquiries, keep records of past and current customers, have an internal real-time DNC list, use your SAN to check numbers, and be able to prove it.  This makes it tough for individual originators to act on their own because there’s really no way to be fully compliant without a company-wide plan in place. 

For mid-sized and smaller companies, this may all seem, well, daunting.  Kaye recommends an outsourced solution that takes care of everything for you.  “There are good companies out there that offer an inexpensive solution – significantly less expensive than the fine for just one violation.  It’s simply not worth it to take the risk.”

If your company doesn’t have a comprehensive DNC policy in place, they are basically leaving you out there to hang.  Kaye says you have three options “You can report them to the FCC or the FTC, you can quit, or you can roll the dice.  Considering that the average originator does not make $11,000 (the fine for every violation) per transaction, the latter would be a poor choice.”

Jen Schwartzman of the FTC Office of Public Affairs agrees that a fly by the seat of your pants attitude is not the best approach.  “They’re right in feeling concerned.  If for any reason you are reported by a consumer, not only the company, but the person making the call can be held accountable.”

Schwartzman suggests a concerned originator should stress that the civil penalty to a company is far more expensive than the cost to be compliant and do all they can to provide education and information to their companies.  You can find a wealth of information on the FTC http://www.ftc.gov/ and FCC http://www.fcc.gov/ websites. 

FCC Spokesperson Rosemary Kimball says that employees wishing to lodge a compliant against their companies can do so on the FCC website.  By not having a compliance policy and taking the DNC laws seriously, Kimball says “Their company has put them in a situation where they have a tough decision to make.  If we get complaints, they will get caught.”