Business and real estate lawyer Matt Mulholland had never given much thought to the marketing headaches realtors face.
That is until he began getting panicked calls from agents and brokers who’d been contacted by the Canadian Radio-television and Telecommunications Commission (CRTC), alleging that they violated the Unsolicited Telecommunications Rules – specifically the national Do Not Call List (DNCL).
DNCL often ignored or off radar
In place for 15 years now, the DNCL is intended to filter out consumers who don’t want to receive unsolicited telemarketing calls. Yet, the list is still often either ignored or off the radar of those who are supposed to refer to it when making those calls.
Yes, that includes realtors and any third-party telemarketers you hire to make cold calls for you.
Liable for actions of third-party violators
Anyone making calls for solicitation purposes is deemed a telemarketer by the CRTC. And although you may not realize it, hiring a company to make the calls does not sidestep your own responsibilities under the regulations.
It was a few years back when Mulholland first noticed a significant surge in the CRTC’s focus on realtors. Asked what the catalyst was for the frantic calls that had started coming into his office (Gill & Mulholland LLP in Toronto), he stated, “A lead-generating company was reported as making calls to people on the Do Not Call List on behalf of real estate agents. The CRTC investigated and found countless violations of the rules.”
This was inevitable.
Shocked agents as brokerages bear responsibility
There are plenty of sketchy telemarketing companies, both from here and overseas. But, the agents were shocked. They were unaware that the telemarketing firm they’d hired “was acting in a manner that was in violation of the DNCL rules,” Mulholland asserts.
And here’s the kicker: the agents had absolutely no idea that they, too, were liable. What’s more, so were their brokers as, according to the CRTC, “Agents act on behalf of brokerages … Brokers are therefore liable for violations.”
Consequently, as the CRTC explains to REM, “Real estate brokerages are responsible for registering with and providing information to the national DNCL operator, becoming a registered subscriber of the DNCL and paying all applicable (DNCL) fees to the extent that their agents initiate telemarketing telecommunications.”
Up to $15,000 in fines for non-compliance
“Brokerages must implement policies and keep careful records to ensure that their agents are in compliance and have up-to-date versions of the DNCL,” the commission continues. “Otherwise, individuals can be issued penalties of up to $1,500 per violation, while brokerages face up to $15,000 per violation.”
With potentially hundreds of actionable calls, the numbers can be jaw-dropping for realtors “who had no idea of their exposure before,” observes Mulholland. “It is of the utmost importance that prior to retaining anyone to make calls on your behalf, you first ensure that you, your brokerage and the telemarketer are all in compliance with the applicable legislation.”
Tips to maintain DNCL compliance
Make sure you’re working off a DNCL that is not more than 30 days old, and keep a record of each call. You must also maintain your own internal do-not-call list.
This way, you’ll be ensured of only calling consumers who aren’t on the updated DNCL. Exemptions to this include clients and potential clients with whom you have an existing business relationship, and who have given you consent to call them.
How to avoid sketchy telemarketing companies
But, how do you avoid hiring an unscrupulous telemarketing company that disregards the rules and call list, exposing you and your brokerage to liability?
“For starters, familiarize yourself with the rules”, advises Mulholland. “Make sure that the telemarketing company is registered with the DNCL and is updating its calling list. The CRTC maintains that it’s your responsibility to ensure that any third-party telemarketer you hire is in compliance.”
Mulholland recommends getting potential contracts reviewed by a lawyer. “If it seems too good to be true, it probably is,” he notes.
Talk to your broker and other agents. Get quality referrals. Don’t be bought off with ambiguous contracts and vague assurances from third-party telemarketers that the DNCL rules will be followed. Make sure you have everything clearly and unequivocally in writing.
Ask the company about its methods and how it generates leads. And, beware of operations that say they use surveys. “That’s a red flag,” notes Mulholland.
“Legitimate surveys are exempted from the DNCL,” he explains. But, some telemarketers skirt the rules by using surveys to get leads, which is a violation.
In Mulholland’s experience, it’s usually new agents who get caught up in iffy situations with third-party telemarketers. “Top producers usually have enough of a client base in place that they don’t need to do this,” he notes.
“It’s all about due diligence”
The good news is that there are “a lot less realtors unaware of the rules now,” Mullholand observes. That said, there are still plenty of consumer complaints to the CRTC around these issues.
“You don’t want to be caught being the cause of your brokerage getting a notice that they are in violation,” he says. “It’s all about due diligence.”