Vine Notes: Telephone wine sales vs. federal law

As always, I feel we all win when we share the lessons learned from others in our business. I’ve recently had a flood of questions on our solutions that solve compliance with Federal Communications Commission (FCC) and Telephone Consumer Protection Act (TCPA) rules on making outbound phone calls. The answers should be of interest to any company making outbound calls, as well as those who use third parties like my company to do so.

I’m not a lawyer, but I’m speaking from my own compliance experience. What I found most surprising is that the rules update in October 2013 says that existing business relationships (EBRs) really mean nothing, and most vendors haven’t caught up with the specifics of these new laws even though the TCPA laws have been around since 1991. Just because you’ve done business with someone in the past does not exempt you from these new laws, nor does it mean you can call that person and not be in potential violation.

Implementing systems that are TCPA-compliant is becoming more important each day, especially since the courts are being flooded with new TCPA lawsuits. There were 1,714 TCPA lawsuits from Jan. 1 through Aug. 31, 2013. That is a more than 31 percent increase from the same period the year before, with California leading the pack.

Ignorance of the law is not a defense, and each violation - each and every out-of-compliance call - could cost you a $1,500 fine. Settlements in these cases have been in the millions of dollars.

Calling riskier than shipping?

It appears to be safer - and less expensive - to ship a case of wine to Utah and get caught than it is to violate the new TCPA law even one time. The last time I checked, there weren’t any wineries being sued for shipping wine in the United States.

Sure, the compliance guy from Louisiana might call you and demand his tax check for 37 cents for shipping wine into his state - yes, it happened to me - but the companies that are being hit with new TCPA lawsuits had no idea just how real and how serious they could be. That includes Diageo, which is defending a multimillion-dollar TCPA lawsuit right now.

Some of these lawsuits are even against schools, so nothing is sacred. For example, Pleasantville School District is facing a New Jersey federal district court lawsuit, filed in July, over allegations a school made repeated automated calls to plaintiff Howard Schaum’s mobile phone.

The TCPA is a federal law and not state-specific. Yet states have different laws about who and when you - or your third-party service provider - can and cannot make calls.

Compliant phone system

Any telephone system or platform used to initiate a call - Avaya, Shoretel, Nortel, Five9, Salesforce, etc. - should include real-time compliance checks on every number and take appropriate action including logging the result of the data check before placing each call. Otherwise, it is not effective, and you are not protected.

These systems should be certified to comply with the new laws by an FCC- and TCPA-knowledgeable law firm and by the vendor of the telecommunications equipment used to make calls. There are features within some of these systems that automatically make them noncompliant, even if they “appear” compliant on the surface.

These days, they only need a “capability” to do certain things, and this makes them noncompliant by default and you are therefore at risk. Someone who thinks they know what they are talking about and who tells you that your system or their system is compliant may not know the specifics of the law, nor have the right protections in place.

We supply compliance certification letters to our partners, issued by a specialized FCC–TCPA law firm, and our telecommunications vendor and equipment suppliers. You should ask for those from your suppliers. This work and subscriptions to TCPA and National Do-Not-Call Registry (DNC) data services is expensive, time-consuming and engineering-intensive, but it ensures compliance and keeps us up to date.

The only way to not worry about this wonderful set of new federal TCPA laws we now have to deal with is to use systems that provide real-time lookup data DNC and phone-type lists before the call is placed then log this information for each inbound and outbound call.

It has taken us years and much investment to become uniquely qualified to take inbound and make outbound telephone calls in compliance with these new laws. But knowing the stakes are so high, we take this as seriously as you take your state by state compliance for shipping alcohol.

Where to start

You have to start somewhere, and there are some really great resources available, both free and paid. A good place to begin would be dnc.com. The site has several white papers on compliance and hosts periodic webinars about staying that way. They also have a great service called “Litigator Scrub” which actually pinpoints individuals who make a living trying to trip up companies and identifies them before you get into trouble.

Getting prior express written consent from your customers to make calls to them is also an important aspect of compliance. Think of it like asking for a customer’s birthdate when shipping alcohol.

Don’t take your vendors’ word on compliance. Ask for certifications from them and their suppliers. This could save you a lot of headaches in the future.

Land of even more laws

As always, California laws make the situation even worse. Did you know it is illegal in the state to record or even listen in on one side of a conversation without both parties consenting to the recording or listening?

Are your vendors recording calls? Are you or they listening in on all calls? Do the monitoring or recording systems observe and comply with the consent laws that can vary by state, day and time? You might want to check.

Jeff Stevenson (jeff@vinopro.com) is chief executive officer of VinoPRO, a Santa Rosa-based direct-to-consumer sales, marketing and technology solutions company. VinoPRO works with Treasury Wine Estates, Beringer, Chateau St. Jean, Iron Horse Winery, Benzinger Family, Ferrari Carano, Gloria Ferrer, BR Cohn, Hello Vino and dozens of other winery brands in addition to the Loudmouth Apparel Companies. VinoPro was named to the 2013 Inc. 500 list of fast-growing companies, ranked No. 236 for attaining 1,818 percent growth over the previous three years.