Requirements & Compliance.
The Federal Communications Commission ("FCC") and the Federal Trade Commission regulate the direct marketing arena, and TriggerLeads is committed to maintain strict regulatory compliance. The telemarketing industry is heavily regulated, mainly under the Telephone Consumer Protection Act ("TCPA") and the Telemarketing Sales Rule ("TSR").The marketing rules fall into several broad categories:
- A national do-not-call list ("DNC list")
- wireless DNC lists
- state and company-specific DNC lists
- predictive dialers
- caller-ID
- direct mail disclosures
These telemarketing rules create various DNC lists and impose certain restrictions on call handling and consumer disclosures. TriggerLeads is committed to complying with all applicable laws, and to helping our clients remain compliant. Additionally, we will continue to remain compliant with state regulations regarding data and direct marketing.
A dedicated compliance team manages these procedures and policies, and we are confident that no stone is left unturned. Additionally, we regularly work with our legal counsel to review the laws and make sure we are doing everything possible to meet new standards.
The Federal-Do-Not-Call Database was designed to give consumers an opportunity to opt-out from receiving telemarketing calls to their home phone. As a telemarketer, you are required to register yourself on the Federal-Do-Not-Call website prior to beginning any telemarketing prospecting campaign. You are also required to pass your list of phone numbers against the DNC Database. Any telemarketer calling a phone number on the DNC Database for prospecting purposes faces stiff penalties. For more information regarding this, please visit the National Do Not Call Registry.
Telemarketing calls must include a firm offer of credit. This is a statement that says “you have been pre-selected (or pre-qualified) for a mortgage loan…”. As a mortgage broker, you should consider this offer you are required by law to make when choosing your target audience. TriggerLeads offers a large number of criteria selections to ensure that you are reaching the prospective borrowers that fit your loan programs.
Compliance
Pre-Approved Offer Guidelines
Mail and telemarketing offers using lists that are prescreened from credit bureau information are subject to certain rules and regulations that do not apply to other types of marketing lists. Credit screened lists are subject to the Fair Credit Reporting Act (FCRA) which requires that a firm offer of credit be extended to every name on the list. The Federal Trade Commission (FTC) is responsible for oversight and enforcement of the FCRA.
Below are suggested guidelines about how to comply with the FCRA requirements. These guidelines do not constitute legal advice from RealSource Inc. and are not meant to be comprehensive. These guidelines do not replace guidance from your attorney. It is your obligation to be aware of, and comply with, all applicable laws, rules, regulations and guidelines and you should consult with your attorney to ensure compliance.
The Firm Offer of Credit:
FCRA requires that every offer made to a prescreened list of names be a FIRM OFFER OF CREDIT. A FIRM OFFER OF CREDIT is carefully defined in FCRA. It is an offer that must be honored if the consumer who responds to the offer still meets the criteria used in the selection process.
FCRA also requires that consumers be notified in any written offers of their right to opt out of future prescreened mailings and the FTC has prescribed language and form for the notice. Finally, the offer of credit also must be stated clearly and concisely, as well as be true and not misleading.
Offers Must Include:
- An indication that the consumer is pre-selected pre-qualified or pre-approvedfor an offer of credit.
- A listing of the terms and conditions of the offer, such as interest rate, method of computing interest, length of repayment period and any other conditions to the offer. If these cannot be clearly determined at the time of the offer since they will depend on the market conditions and the value of the collateral, a formula or method for determining them should be included. If collateral is required, that should be stated.
- A minimum dollar amount of credit for which the consumer has been qualified. It is acceptable to say the consumer may be qualified for more and a range can be stated so long as there is a minimum amount somewhere on the mail piece, we recommend in the terms and conditions.
- The minimum dollar amount should be commensurate with the type of offer. For example, a minimum offer of $250 toward the purchase of an automobile that will cost $20,000 may not have any value to the consumer and therefore may not be a real credit offer.
- A time period during which it must be accepted by the consumer.
- A statement the consumer may opt out of future marketing solicitations by including the FCRA required opt-out disclosure notices. The opt-out notices are discussed below.
- A statement that the consumer received the offer because they met the lender's requirements for credit.
- Only statements that are true and not misleading to the normal consumer.
- If applicable, a statement that credit may not be extended if, after the consumer responds to the offer, they do not meet the criteria used to select the consumer or the consumer does not furnish the required collateral as specified on the mailpiece.
Offers May Not Include:
- Statements which merely invite the consumer to apply for credit.
• Statements which are false or misleading to the normal consumer.
• Only a telephone number for the consumer to call to find out what the terms are.
• An unreasonably short period of time in which the consumer must respond to the offer.
• The consumer's social security number or driver's license number.
• That you know how much a consumer owes, what their monthly payments are, etc. based on information from their consumer credit report.
• Offers that are "up to" a specific dollar amount without any minimum.
Offers May Include:
- A range of credit amounts and interest rates for which the consumer may qualify, so long as there is an offer for which he or she does qualify if the stated conditions are met. For example: "You are pre-approved for ... but you may qualify for the even better :::"
- Offers in addition to the firm offer so long as there is a clearly stated credit offer for which the consumer qualifies. For example, an offer to join a buyers club has been found by one court not to detract from the firm credit offer.
- A matrix of rates and terms to pick from, so long as the consumer qualifies for one if all conditions are met.
Recommendations:
- There should be an expiration date associated with the offer which can be up to 12 months after the offer is made, however we recommend three days to two months from the time that the consumer receives the offer.
- If acronyms such as "APR" appear on the piece they must be spelled out in the terms and conditions as "Annual Percentage Rate". Using (*) next to the acronym within the body of a piece can lead the consumer to the terms and conditions and is highly recommended.
- If the offer calculates monthly savings, the calculations must be clear and accurate and state the assumptions, such as: type of loan (term, fixed, adjustable), the interest rate used, total amount of loan, any additional costs or fees.
- In cases where additional fees may apply, they should be stated in the terms and conditions.
- A listing of the terms of the offer, such as interest rate, method of computing interest, length of repayment period and any other conditions to the offer. If these cannot be clearly determined at the time of the offer since they will depend on market conditions and the value of the collateral, a formula or method for determining them should be included. Last sentence needs to be expanded on.
- Credit tradeline data used on the piece MUST be used as an EXAMPLE and be stated as such. This information must also be rounded. It may not identify specific creditors.
- Stating the minimum loan amount that the consumer is qualified for in the Terms and Conditions, not in the body of the offer. We recommend the minimum pre-approval amounts for the following types of consumer loans:
• Student Loan - $5,000.
• Residential 1st Mortgage - $50,000 to $100,000.
• Residential Home Equity/2nd or 3rd Mortgage/Home Equity Line of Credit - $10,000 to $20,000.
• Auto Loan - $4,000 to $10,000.
Telemarketing Offers:
- Telemarketing offers have the same requirements as other marketing offers listed above, except for the opt-out notice.
- The telemarketing script must state an offer for which the consumer has been pre-selected and the conditions based on which it may be withdrawn.
- The script must state a minimum dollar amount for which the consumer qualifies, the applicable interest rate, whether or not collateral is required and what other conditions apply.
- The offeror must intend to make the offer in the script and must intend to make all the disclosures but it is not necessary to call back if the consumer refuses to listen.
Sample Firm Offer Statements
- “You've been PRE-QUALIFIED for mortgage loan of up to $800,000."
- "XYZ Mortgage has pre-selected you for a home equity loan of up to $200,000 for ONE LOW MONTHLY PAYMENT!"
- "You have been pre-approved to consolidate your student loans now with XYZ Loan Solutions and lock in a fixed interest rate as low as 5.00%."
The Directional Notice:
There should be a directional notice on the first page of the solicitation directing consumers to the Terms and Conditions of the offer. "NOTICE: SEE REVERSE SIDE FOR TERMS & CONDITIONS OF THIS PRE-APPROVED OFFER"
Sample Term and Conditions:
Mortgage
Information from your consumer credit report was used in connection with this offer and you received this offer because you satisfied the criteria of credit worthiness we used to screen persons for this offer. Our offer is subject to:
- Continuing to meet the criteria for this prescreened offer;
- Your ability to give us a first (or second) mortgage lien on your property;
- Your credit report and credit history continue to meet the criteria by which you were selected;
- Your income is at least $2,200 per month and you have been employed for at least 1 year;
- We receive a satisfactory title and appraisal on your home.
You are pre-approved for no less than $100,000 with a maximum loan to value of 80% in the of the subject property that you own. As of the date of this letter, Annual Percentage Rate (APR) is 7.59% for a 30 year mortgage loan of $100,000 with 80% loan to value. Actual interest rate as of September 1, 2006 is 7.00% and is based on the published 11th District Cost of Funds (COFI), plus 1.5% at the time of your application. Loan assumes 1/2 point origination fee based on total loan balance financed. Monthly payments would be $665.30 for 360 months per $100,000 financed. This includes principle and interest only. Other rates and conditions apply for different mortgage amounts and terms. The pre-approved offer expires January 1, 2007.
Opt-Out Notices
Pursuant to the FTC's Final Rule on Prescreen Opt-out Disclosure, the offer must include the following two disclosure statements (a short notice and a long notice). The short notice should conform to the following:
Short Notice
You can choose to stop receiving "prescreened" offers of [credit or insurance] from this and other companies by calling toll-free 1-888-567 8688. See PRESCREEN & OPT-OUT NOTICE on other side [or other location] for more information about prescreened offers.
• The short notice can not contain any other information than the information listed above
• The short notice must appear in type size that is larger than the type size of the principal text on the same page, but in no event smaller than 12 point type font
• The short notice must appear on the front side of the first page of the principal promotional document (item designed to be seen first by the consumer but not the envelope) in the solicitation
• The short notice must be located on the page and in a format that is distinct from the other text (inside a border)
• The short notice must appear in a type style that is distinct from the principal type style used on the same page (bolded, italicized, underlined, etc)
Long Notice
This "prescreened" offer of credit or insurance is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria including providing acceptable property as collateral. If you do not want to receive prescreened offers of credit or insurance from this and other companies. call 1-888-567-8688 or visit the website at www.optoutprescreen.com, or write TransUnion Opt Out Request PO Box 505. Woodlyn. PA 19094-0505. Experian Information Systems. Inc PO Box 919. Allen. TX 75013. Equifax Options PO Box 740123. Atlanta. GA 30394-0123.
Required Format:
- The long notice must appear in type size that is no smaller than the type size of the principal text on the same page (if electronic the type size must be greater than 8 point font).
- The long notice must begin with a heading "PRESCREEN & OPT OUT NOTICE" in capital letters and underlined
- The long notice must appear in a type style that is distinct from the principal type style used on the same page (bolded, italicized, underlined, etc.)
The long notice must appear set apart from the other text on the page (blank lines above and below the statement, indenting the margins, etc.)
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