August 8, 2006

By: Michael Murray
Mortgage Bankers Association, MBA Tech Newslink

Automation Helps "Block" Do-Not-Call Fines

Mortgage origination call centers could pay a high price for not having their national Do Not Call (DNC) Registry lists up-to-date.

In June, the Federal Trade Commission (FTC) ordered a mortgage brokerage, Executive Home Loan, and its parent company Executive Financial Home Loan Corp., Santa Ana, Calif., to pay $1.13 million for violating the DNC provisions of the Telemarketing Sales Rules (TSR).

The defendants claimed they relied on service providers for their compliance with the DNC rules and specifically purchased "lead lists" of phone numbers from list brokers, such as title companies. However, the FTC stated it was not enough for them to rely on the brokers' claims that the lists had been properly "scrubbed" against the DNC Registry.

A "scrubbed" list is supposed to have all telephone numbers that are on the DNC Registry removed from it no more than thirty days before calls are placed. The defendants paid the brokers for the phone lists, but did not properly pay for access to numbers on the DNC Registry.

"The bottom line is that telemarketers are responsible for complying with the Do Not Call provisions of the Telemarketing Sales Rule, and cannot hide behind the claims of their service providers," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection. "If a telemarketer purchases a 'scrubbed' list, they better make sure that it is current and squeaky clean or else they may be violating the law and subject to penalties."

Nearly 40 percent of citations by the Federal Communications Commission (FCC) were issued to mortgage companies since the DNC Registry list started, but the numbers have been declining. DNC federal fines could reach as high as $11,000 per call with some state fines higher than that, according to Melissa Sike, vice president at Bext Inc., a call compliance technology firm in Stuart, Fla. More than 15 states enacted their own DNC lists, including Alaska, Colorado, Florida, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Oklahoma, Pennsylvania, Tennessee, Texas, Wisconsin and Wyoming.

Sike said Bext's "Can Call List" is a complete outsourced call compliance service, made affordable for mid-sized and small companies.

Allied Home Capital Corp., a Houston-based mortgage banker/broker that opened eight branches across the country this summer, employed Norwood, Mass.-based Gryphon Networks for its Guardian and Call Advisor products to provide "100 percent" up-to-date DNC lists. It recently added Duluth, Ga.-based Possible Now as another DNC Registry tool.

"We figure two methods of scrubbing are better than one," said David Langston, CIO of Allied Home Capital. "They offer different methods for the telemarketing end of scrubbing the numbers."

Guardian automates DNC management for call centers and service bureaus. It combines automated dialing devices with a client's existing data flow and automatically removes DNC-restricted numbers. The software then routes a certified-compliant list of telephone numbers to the dialer before the call attempt. Meanwhile, Call Advisor automatically screens every outbound dial attempt through the telephone, blocking numbers that would violate any regulation and alert the caller with a voice prompt.

"Allied is able to automatically remove restricted numbers from the dialing queue and prevent them from being dialed, which results in greater efficiencies and reduced telecommunications expense," said Keith Fotta, president and CEO of Gryphon Networks.

Possible Now has a Web interface that enables branches to take old lead lists, upload them and scrub "hundreds of thousands of numbers in one pass," according to Langston. Allied Home Mortgage has the technology in all of its branches and Langston said the software is "definitely a necessity."

"There is too much press linked with violations of the Do Not Call [Registry]," Langston said. "We certainly do not want to pay the fines but we also do not want to be known as one of those [firms] that just pick up the phone and start calling people."