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Phone Follow Up on Leads Could Cost You Millions

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By Pam McDonald

Andy Cohen, co-founder and CEO of Caring.com, the largest online resource for people providing care to senior loved ones and a Senior Housing Forum partner, warns industry providers that use of a call center to follow up on Internet leads may be exposing them to multi-million dollar lawsuits thanks to a July 2015 ruling by the Federal Communications Commission (FCC).

How This Situation Arose

It’s complicated. But it starts with a law – called the Telephone Consumer Protection Act or TCPA. The law has been around for a while. It requires companies that use machines to auto-dial lists of telephone numbers to secure express written consent from consumers to make these calls.

Under this law, it’s not enough merely to have an existing relationship with a consumer to auto-dial them – a company must also have specific permission. If the company making auto-dialed calls can’t prove it has this permission, it could be facing penalties of $500 - $1,500 per dial (note, that’s not per conversation or per completed call, but per auto-dialed call).

So what changed?  

Last July, the FCC broadened its definition of what makes an auto-dialer. In simple terms, it appears that any telephone system that has the potential to dial random or sequential numbers – even if it is not currently doing so and even if it would need to be modified to do so – could be considered an auto-dialer and, consequently, subject to the TCPA consent requirement.

Essentially this means any computer-based telephone system, such as those in use in thousands of call centers around the world, could trigger TCPA requirements.   

How Other Industries Get Consent

According to James Gilmartin, General Counsel of Bankrate, Inc., the parent company of Caring.com: “In other industries, such as insurance, finance, and education, product providers tend to include TCPA-compliant consent language on lead forms on their own websites, and require their referral providers to do likewise.

“In Senior Living however, we haven’t seen providers taking the same steps to protect against potential TCPA liability,” he notes.

Calculating Potential Senior Living Company Fines

Let’s assume your company doesn't have TCPA-compliant language on your lead form – giving you express permission to call. You get 10 leads per day from your website and then your call center makes an average of four attempts per lead to try to connect with these families. You could be liable for $600,000 per month in penalties! Here’s the formula:10 leads x 30 days x 4 attempts x $500.

Additionally, if you are found to have willfully disobeyed the law, the per dial penalty jumps to $1,500 and so the $600,000 become $1.8 million. And, if your call center contacts people from referral sources that don’t have TCPA language on their lead forms, these dials would get hit with penalties, too.

Mr. Gilmartin points out that while the TCPA requirements are not always black and white and are currently being litigated in federal appeals court, “the risk of large liability from private class action litigation means that companies that don’t have a TCPA consent often find themselves pressured to settle cases for meaningful amounts.”

Better Safe Than Sorry

Mr. Gilmartin believes that all companies in the senior living industry, both referral agencies and senior living providers, should seek advice of their legal counsel to make sure they are taking the right precautions to protect themselves.

To learn more about the services provided by Caring.com, visit their website here.

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