Cold call, who?
The classic sales technique that has weathered the storms of time and technology.
Is it still relevant? Why, yes.
Cold calling might have earned a bad name over the years, but it is still as effective. It allows you to establish a genuine connection with prospects and clearly convey your message.
But there’s a catch. Many countries and regions have strict cold calling regulations in place to protect the interests of their citizens.
So is cold-calling illegal? No.
As long as you keep up with the intricacies of compliances and regulations, you’ll be sure to stay on the sunny side of the law.
In this blog, we’ll equip you with a trusty guide to help you find the sweet spot between making connections and staying within legal boundaries.
The Rise and Fall of Cold Calling
It all began in the early 20th century when telephones were the shiny new things that revolutionized communication. Businesses saw this as a golden chance to reach potential customers, expanding market reach and boosting sales. The idea was simple yet powerful—flip through the phone book, dial some numbers, and promote your products or services.
This was the time when cold calling was all the rage, and businesses were eager to ride the wave. Armed with trusty directories and scripts, sales reps would dial away, deliver a sales pitch, hoping to strike gold with each call.
In the late 1900s, they went from old-school touch-tone dialing to toll-free numbers, accelerating and scaling their sales efforts. But the decades that followed saw the downfall of cold calling. People were overwhelmed by the constant stream of unwanted calls and started seeing them as annoying and invasive. The once-promising approach was losing its luster.
The internet allowed buyers to do their own independent research. Social media created fertile ground for inbound sales, pushing inbound methods like cold calling further out of the picture.
And as technology advanced, so did its misuse. As of 2021, 59.4 million Americans have fallen prey to phone scams, losing nearly $30 billion. This gave rise to spam filters, call screening, and a generation of consumers conditioned to ignore unknown numbers.
Consumer privacy concerns further pushed governments worldwide to implement laws and regulations to protect citizens from unwanted telemarketing calls. These laws differed across countries and regions, making it critical for businesses to understand the legal landscape before making the next call.
Understanding Cold Calling Laws Around the World
With the changing landscape of cold calling, most businesses are faced with a pressing question—Is cold calling against the law? While the straightforward answer is no, navigating the legalities of cold calling across the globe is slightly complicated. In this section, we’ll dive into the nitty-gritty details of international cold calling regulations to help you stay compliant globally.
The Telephone Consumer Protection Act (TCPA) of the US
The TCPA was enacted by the Federal Communications Commission (FCC) in 1991. It protects US citizens from unsolicited calls, robocalls, fax advertisements, and automated phone dialing system. How? By creating a national database of “do not call” (DNC) numbers. The TCPA also has restrictions on when you can make cold calls and the equipment you use.
Key provisions of the TCPA:
- You can only call your prospects within the 13-hour window of 8 a.m. to 9 p.m. (local time).
- You must go through the DNC registry and refrain from calling customers listed in it.
- You must introduce yourself, your company, and the purpose of your call. You must also display accurate identification information on caller ID systems.
- Non-compliance with TCPA regulations can attract strict penalties, including hefty fines and potential lawsuits.
Number of registrations to the U.S. National Do not Call Registry from FY 2003 to FY 2022 Source
Telemarketing Sales Rule (TSR) of the US
The Telemarketing Sales Rule (TSR) was issued in 1995 by the Federal Trade Commission (FTC). It governs telemarketing sales in the US and combats fraud, safeguarding consumers from misleading practices and protecting their privacy. These regulations apply to all cold calls made to consumers in the US, regardless of where they originate from.
Key provisions of the TSR:
- You cannot call a prospect before 8 a.m. or after 9 p.m. (local time).
- You must accurately identify yourself, disclose the purpose of the call, and state important terms and conditions during the cold call.
- You must go through the DNC registry to avoid reaching out to consumers who have opted out of receiving telemarketing calls.
- You must also maintain your own DNC and honor the request of customers who do not wish to be contacted.
- Certain entities, like banks, credit unions, and non-profit organizations are exempt from TSR.
Privacy and Electronic Communications Regulations (PECR) of the UK
The PECR was introduced in the UK in 2003. It governs the use of electronic communications, including sales emails, phone calls, text messages, cookies, and automated phone calls. This regulation mandates businesses to obtain explicit consent from consumers before contacting them through electronic channels. This protects the users’ privacy and guards them against receiving unwanted and potentially harmful messages.
Key provisions of the PECR:
- You must identify yourself and reveal your phone number and address if asked.
- You can only make cold calls between 8am and 8pm on weekdays and between 9am and 6pm on weekends and public holidays.
- You must honor the preferences of prospects who wish to opt out of receiving cold calls.
- Non-compliance with PECR rules can lead to strict actions by the Information Commissioner’s Office (ICO), which may result in warnings and penalties.
General Data Protection Regulation (GDPR) of the EU
EU’s GDPR came into force in May 2018 to protect the privacy and personal data of EU citizens. It replaced the outdated Data Protection Directive, giving individuals more control over their personal data. The GDPR applies to all companies that process the personal data of EU citizens, regardless of where the company is located.
Key provisions of the GDPR:
- You must obtain explicit consent from the prospect before cold calling them.
- You must establish a legitimate interest that does not override the prospect’s rights.
- You must be transparent with the prospect about the purpose of the cold call and how their data will be used.
- You must provide prospects with a simple way to opt out of future contacts.
- Violating GDPR can attract fines of up to 4% of your annual global revenue or €20 million, whichever is higher.
Australian Consumer Law (ACL)
The ACL, introduced in January 2011, governs business practices, consumer rights, and protections in Australia. Like other Western countries, Australia also maintains a national DNC list. It allows citizens to register their phone and fax numbers to restrict contact from telemarketers.
Key provisions of the ACL:
- You can only call prospects between 9am and 8 p.m. on weekdays and between 9 a.m. and 5 p.m. on Saturdays. You cannot make cold calls on Sundays and public holidays.
- You must provide accurate and honest information to consumers about your identity and the purpose of the cold call.
- You must strictly comply with the DNC Register and avoid calling registered numbers.
- If the prospect enters into an agreement with you, you must give them a cooling-off period of 10 days from the day they receive the agreement. During this period, they may cancel the agreement without any penalty or charges.
Telecom Commercial Communications Customer Preference Regulations (TCCCPR) of India
In India, The Telecom Regulatory Authority of India (TRAI) allows customers to fully or partially block telemarketers. The TCCCPR, launched in 2018, regulates unsolicited commercial communication (UCC) or cold calls. The regulation has given powers to telecom operators to allow customers to set the days and time frames within which they prefer to be contacted, whether through SMS or call. India also has a Do Not Disturb (DND) directory to allow consumers to opt out of receiving telemarketing communications.
Key provisions of the TCCCPR:
- You must register yourself with TRAI for commercial messages or calls.
- You can only make cold calls between 9am and 9pm (local time).
- All cold calls must start with 140 to identify their origin.
- Non-compliance with the rules can attract a fine of up to $2,500 and a potential account ban.
Do Not Call Registry of South America
Argentina has a Do Not Call registry (Registro No Llame) that allows consumers to opt out of receiving unsolicited telemarketing calls. Brazil also has a national DNC Registry (Cadastro Nacional Não Perturbe) for the same purpose. It also prohibits robocalls.
Key provisions of the Registro No Llame:
- You must register on the DNC registry and download the database of consumers who do not wish to be contacted.
- You can only make cold calls between 8am and 8pm on weekdays. The law prohibits any telemarketing calls on weekends and public holidays.
- You must accurately identify yourself and disclose the purpose of the call and other important details to the consumer.
Key provisions of the Cadastro Nacional Não Perturbe:
- You can only make cold calls between 8am and 9pm on weekdays. The law prohibits any telemarketing calls on weekends and public holidays.
- You must obtain explicit consent from consumers before making cold calls.
- You must display your number clearly and avoid using hidden or private numbers.
5 Cold Calling Rules That Your Business Must Follow
Whether you’re cold-calling prospects next door or across the globe, there are certain best practices that you must follow regardless of their location. Let us explain.
1. Establish Your Identity, While Cold Calling
Cold calling regulations vary for different countries and regions. But one thing that’s standard across the board is revealing your identity right at the beginning of the call. This helps you be transparent and builds trust with the prospect. So, within the first 2 minutes, make sure you disclose important details like:
- Your name
- The company you’re representing
- The purpose of your call
- Your address or phone number
2. Know the Cold Calling Hours
Different laws lay out different hours during which you can cold call prospects. As a rule of thumb,
- Stick to regular business hours and call prospects only between 8 a.m. and 8 p.m.
- Avoid calling prospects on the weekends and public holidays.
3. Obtain Explicit Consent Before Calling
This ensures you comply with cold calling regulations and makes the prospect more open to listening to you. Here are some ways to obtain explicit consent:
- Use a clear opt-in checkbox on your website.
- Clearly states the purpose of your telemarketing calls on sign-up forms.
- Inform the prospect about the purpose of the cold call right in the beginning and ask for their consent before continuing the conversation.
- Cross-check your prospect list with a DNC Registry to avoid calling prospects who have opted out.
4. Get Prospect’s Written Approval Before Monetary Transactions
There’s no dearth of financial fraud across the globe. And when you’re reaching out to a prospect for the first time, this is not the impression you’d want to leave.
Even if they’re ready to make a purchase, never process any financial transactions over a phone call. Always obtain proper consent, preferably in writing, before transferring funds from their bank account. As a cold caller this helps you:
- Build trust with the prospect.
- Ensure they fully understand what they’re agreeing to.
- Prevent payment disputes and financial loss.
5. Avoid Making Calls Using Bots
For starters, they lack the human touch and personalization. This is an immediate turnoff and encourages recipients to promptly hang up. Secondly, they’re frowned upon by most telemarketing regulations. Putting robocalls to rest allows you to:
- Create an emotional connection with your prospects, making them more receptive.
- Address their objections in real time.
- Customize your pitch to suit their unique needs and make the conversation more meaningful.
Are B2B Cold Calling Rules Different From B2C Cold Calling Rules?
Yes, B2B cold calling is very different from B2C cold calling, as both are governed by a different set of rules. This begs the question—“is it legal to cold call?” Or more specifically, “is it legal to cold call businesses?”
According to the Telemarketing Sales Rule, cold callers can cold call a business to sell their services. However, if this involves calling the personal number of an employee in the target company, it is illegal.
Also, if the recipient of your B2B cold call explicitly states their disinterest, then the TSR rules apply. You’ll have to end the call and stop pursuing them in the future.
The TCPA prohibits B2B cold calls to personal cell phones using automated dialers. Since it is often difficult to accurately distinguish between an office and a cell phone number, you should always tread cautiously while cold calling using auto-dialers.
Additionally, when making B2B cold calls, you must also be mindful of FCC’s wireless dialing rules. This means you cannot dial a wireless number using an automated dialing system unless you have the receiver’s prior express written consent.
GDPR also has different regulations to collect and use B2B and B2C data. For example, if you’re making a B2B call to sell project management software, asking the prospect about their favorite brand of cereal isn’t relevant. This could land you in trouble. But if you’re reaching out to a B2C prospect from a cereal brand, you can justify collecting such information.
Despite innovation in communication technology and growing concerns around data security, cold calling remains unmatched in the human touch it offers. So, by maneuvering around the regulations on the practice in different countries, sales reps can continue to make the most out of it.
Disclaimer: The information provided above is educational in nature. It should not be considered as legal advice. For actionable legal guidance, please consult an attorney.