PETER P. CASEY
Many ‘uncertainties’

Bay State Realtors who fought hard to be exempted from do-not-call registry rules are finding out that their short-lived victory has been turned upside down by new federal regulations.

The Federal Communications Commission recently announced changes to national telemarketing rules – designed to protect consumers from unwanted telephone solicitations by allowing them to register their phone numbers on a national do-not-call list – that essentially override similar laws passed at the state level.

The new FCC rules apply to calls made within states, whereas previous rules by the Federal Trade Commission applied only to calls made across state lines. Previously, state telemarketing laws governed intrastate calls.

Thirty-eight states, including Massachusetts, Connecticut and Rhode Island, have their own do-not-call laws. Massachusetts allows residents to register on a do-not-call list maintained by the Office of Consumer Affairs and Business Regulation. Numbers on the list are supposed to be shared with the national registry. But last year, the Massachusetts Association of Realtors successfully lobbied for a so-called “face-to-face exemption.” Such exemptions apply to solicitors who don’t actually sell services and goods over the phone, including real estate agents and brokers, but make phone calls to set up appointments and face-to-face meetings to generate business.

However, the FCC changes, which are slated to take effect Oct. 1, would trump state law and prohibit telemarketers, including Realtors, from making intrastate calls to consumers who have registered with a national do-not-call list. Violators are subject to fines.

“Apparently, what the FCC has done is stated publicly that exemptions that exist in state laws will no longer be in effect as of Oct. 1,” said Stephen Ryan, general counsel and director of government affairs for MAR. “The FCC is now intending to regulate intrastate calls through their telemarketing law, and that has caused some questions and concerns.”

It’s not uncommon for real estate brokers and agents to cold-call consumers in hopes of attracting a prospective buyer or seller. Some agents frequently make calls to sellers who are trying to sell their homes on their own without the use of a real estate agent. Under Massachusetts and other state laws, that type of activity isn’t defined as a telemarketing call.

“Quite frankly that [FCC rule] appears to be a solution in search of problem,” said Ryan, who noted that states have already passed their own laws and regulations as to “what is and is not a telemarketing call.”

“The level of regulation that the FCC is proposing would be affecting decisions already made at the state level in the majority of states in this country,” Ryan said.

MAR President Peter P. Casey said the latest FCC amendments have created a lot of confusion and concern in the real estate industry. “There are a lot of uncertainties,” he said last week.

Casey noted that MAR “spent a great deal of time and effort convincing legislators,” that real estate brokers and agents don’t operate like typical telemarketers because they don’t sell goods or services over the phone.

“This is not a high-pressure sale where we’re trying to close a sale over the phone,” said Casey, who is the president of Prudential Wilmot Whitney Real Estate in Weston. “A number of real estate companies do a fair amount of telemarketing. It’s one technique to generate customers and leads.”

Finding a ‘Balance’

While Bay State Realtors are concerned, some pointed out that cold calling is just one way – and not always the preferred way – of generating business.

“Realtors have been using it less and less as a means of procuring business [because] … consumers don’t embrace it,” said James McKeon, president of Coldwell Banker Residential Brokerage Northern New England.

Instead, agents at Coldwell Banker focus on marketing to their so-called “sphere-of-influence,” sending promotional materials, for example, to past clients and old contacts, he said. In addition, companies like Coldwell Banker also use their Web sites to attract prospective clients.

“We have been doing less and less of it [telemarketing]. I’m sure there is some element of it still going on in some of our offices,” said McKeon.

One exemption to the federal law could help Realtors who want to stay in touch with prior clients. Consumers who have registered their phone numbers on the do-not-call list may still get calls from companies from which they purchased a product or service, up to 18 months after the purchase. Those types of calls aren’t prohibited under the telemarketing law.

Still, McKeon said he is concerned about the latest developments and wonders whether more restrictions are in store. “We want to be respective [of the law and consumers], but we don’t want to see it swing to an extreme. I think there needs to be balance.”

In the meantime, the National Association of Realtors is trying to determine what action to take next.

“We are currently assessing our options for amending these rules either through the regulatory and/or legislative process or via a legal challenge,” reads a statement on www.realtor.org, NAR’s Web site. “We understand this development is undermining the efforts of state associations seeking exemptions, and those states that already have exemptions, for real estate activity. In the meantime, we are developing a comprehensive guidance document for members on how to comply with the rule changes and make it widely available on the Realtor.org Web site.”

Earlier briefs and notices from NAR instructed real estate agents to follow state telemarketing laws and rules unless they were calling across state lines, in which case they had to comply with Federal Trade Commission rules.

The FTC amended its Telemarketing Sales Rule and established the national do-not-call registry last December. At the time, the national Realtor association pushed to maintain an exemption for real estate professionals, but the FTC wanted to tighten the rule and minimize exemptions. However, since the FTC’s authority was limited to interstate activity, it was considered good news.

Meanwhile, states enacted their own laws with exemptions based on FTC rules. In March, Congress required the FCC to issue final rules “to maximize consistency with FTC rules,” according to NAR. FCC sought input and NAR submitted comments advocating for an exemption from the do-not-call registry requirements.

MAR’s Ryan said the state association, which is in the process of notifying members about the FCC rule changes, will be working closely with NAR in upcoming weeks.

“We’re hopeful that the FCC will recognize that calls within states are being clearly and adequately addressed at the state level,” said Ryan.

Consumers in Western states started registering their names on the do-not-call list June 27 via the Internet or by calling a toll-free number. Consumers living East of the Mississippi River were able to start calling to register last Monday. Nearly 17 million phone numbers have been registered.

Registration lasts for five years, or until a phone number is disconnected or the consumer takes it off the registry. Calls from political groups, for charitable contributions and for surveys are not covered by the registry rules.

Aglaia Pikounis may be reached at apikounis@thewarrengroup.com.