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You Could Be Sending Illegal Robocalls and Not Know It

Federal concern is growing as are the fines for noncompliance. If you send 50 texts simultaneously via computer, you likely broke the law, leaving you and your broker exposed to monetary demands up to $500K from lawyers threatening a class action lawsuit.

ORLANDO, Fla. – Are you using automated software – such as Customer Relationship Management (CRM) programs – to text multiple people with the push of a button? If so, you’re a robocaller.

“While robocalls remain legal in limited circumstances, the penalties have now gotten so high that Realtors, in general, are advised not to make any robocalls at all – or hire any private company offering to make robocalls on their behalf,” says Juana Watkins, Florida Realtors vice president of law and policy and general counsel.

Up until now, the cost of a potential law violation was, to a handful of agents and brokers, the “cost of doing business.” However, that cost just rose a lot higher under the Pallone-Thune TRACED Act, which the president signed into law on Dec. 31, 2019.

 Agents who want to send multi-recipient texts should do it from their cell phone. Under the law, agents can cut-and-paste 50 email addresses into their phone and simultaneously send all of them the same text message – but they’re breaking the law if they use their computer’s CRM program to do the exact same thing.

Purchasing leads doesn’t protect you

“Buying leads is not the problem – it’s the method you use to contact those leads that puts you at risk,” says Watkins. “To avoid potential fines that go as high as $10,000 per text, don’t focus too much on whether it makes sense to penalize your use of a computer-based CRM but not your cellphone. Focus on the amount of money you could save by sending mass texts only in a legal way.”

Before Jan. 1, 2020, a handful of agents and their brokers considered potential fines for robocalls a “cost of doing business,” but that cost skyrocketed under the Pallone-Thune TRACED Act. The legislation allows fines as high as $10,000 per call or text if the sender knowingly broke the law. For a CRM-sent text to 50 people, that cost could be as high as $500,000.

Beyond stiffer fines for violations, an analysis of the 44-page Act suggests a higher government interest in penalizing people who make robocalls, especially in an election year. Many Americans consider robocalls an irritating inconvenience, and the bipartisan group of lawmakers who passed the Act appear ready to fight.

Note: The Act on robocalling is separate from federal do-not-call laws that would also apply to calls and texts.

The threat from private law firms

 “It’s too early to determine how dedicated the federal government will be enforcing these new laws, which fall under the Federal Communications Commission (FCC),” says Watkins. “The more immediate threat comes from private law firms that file lawsuits against brokers.”

A broker or agent may find that a single recipient of a 50-email robo-text complains to a law firm rather than the FCC. The law firm, in turn, files a class-action lawsuit against the broker, demanding perhaps thousands of dollars for every text sent.

If a lawsuit is filed, brokers have few options. They can either pay the money demanded, negotiate for a smaller amount, or take the case to court and admit that they broke federal law. And while some E&O insurance policies may cover the cost, it’s unlikely they will continue to do so over time.

“If you use an automated call or text system, stop,” warns Watkins. “Even if the FCC is slow to enforce the new penalties, the private lawsuit threat is gaining ground in Florida. Given the penalty hike for robocalls, this new risk makes it an unaffordable ‘cost of doing business.’”

Your CRM calls could soon be blocked

The Pallone-Thune TRACED Act focuses largely on the phone carriers that allow robocalls rather than the people who send them. The Act’s overriding goal is to block automatically dialed texts and calls from going through. It does that, in part, by mandating that telecommunication carriers adopt a call-blocking technology called the “SHAKEN/STIR call authentication framework.”

It’s too early to know how effective SHAKEN/STIR will be or whether it will target smaller companies and real estate agents. However, the Act also forces phone carriers to monitor success and update Congress on their call authentication frameworks, call blocking and labeling measures.

“That, in turn, could result in the FCC applying increased pressure on carriers to take such actions,” according to an analysis of the changes published by Covington & Burling LLP. “As a result, the TRACED Act could increase the risk that high volumes of calls will be blocked or mislabeled as spam.”

© 2020 Florida Realtors®