If you are telemarketing into Indiana beware! Several major changes to their “Do Not Call” exemptions take effect on July 1, 2019. Recent legislation made sweeping changes to the Indiana telemarketing requirements that come with severe penalties for violations. The new rules add two categories of calls that will be exempt from the state’s “Do Not call” statute, but both require an existing “established business relationship”.

What is important about Indiana’s enactment of HB 1123 is that it expands the telemarketing law for sellers to encompass any entity making a solicitation. Now a solicitation is defined as “a telephone conversation or attempted telephone conversation in which the seller offers, or attempts to offer, an item to another person in exchange for money or other consideration.”

You should also be aware that the exposure to fines could potentially extend to senior corporate executives of the businesses for violating the “Do Not Call” provisions. The civil penalty for the first violation is $10,000. Each addition violation will be $25,000. If you don’t want to be penalized for violating Indiana’s telemarketing requirements, review the new legislation in detail and make sure your telemarketing call centers are in compliance.

Below is a summary of HB 1123 that takes effect on July 1, 2019.

Summary of the Indiana’s HB 1123

Telephone Solicitation EXEMPTIONS

Adds to the list of telephone calls that are exempt from the "do not call" statute any telephone call made to a consumer by a caller that is:

1. A communications service provider that offers broadband internet service
2. A financial institution or a person licensed by the department of financial institutions to engage in first lien mortgage transactions or consumer credit transactions
3. An entity with an established business relationship with the consumer.

Residential Notification

Requires the consumer protection division of the attorney general's office (division) to notify Indiana residents of the following:

1. The prohibition under federal law against a person making any call using an:
   1. Automatic telephone dialing system; or
   2. Artificial or prerecorded voice; to any telephone number assigned to a mobile telecommunications service.
2. The prohibition under federal law against a person initiating any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior consent of the called party.
3. Information concerning the placement of a telephone number on the National Do Not Call Registry operated by the Federal Trade Commission.

Administrative Funding

Allows the division to use the consumer protection division telephone solicitation fund (fund) to:

1. Administer the statutes concerning:
   1. The registration of telephone solicitors; and
   2. The regulation of automatic dialing machines; and
2. Reimburse county prosecutors for expenses incurred in extraditing violators of these and other state and federal statutes concerning telephone solicitations.

Current Law:  Provides that the fund may be used only to administer: (1) the state's "do not call" statute; (2) the federal statute concerning restrictions on the use of telephone equipment; and (3) the state statute concerning misleading or inaccurate caller identification (caller ID statute).

Civil Penalties

• Provides that certain civil penalties recovered by the attorney general for violations of the statutes shall be deposited into the fund that concern:

1. The registration of telephone solicitors; and
2. The regulation of automatic dialing machines

• Provides that the attorney general can collect attorney fees and costs in a civil action for a violation of the caller ID statute.
• Allows the attorney general to collect a civil penalty based on the statue’s regulating of automatic dialing machines of not more than:

1. $10,000 for the first violation; and
2. $25,000 for each subsequent violation

Amended Definitions / Terminology

• Defines "executive" for purposes of the "do not call" statute, and provides that an executive of a person that violates the "do not call" statute commits a separate deceptive act actionable by the division.
• Amends the definition of "seller" for purposes of the statute requiring telephone solicitors to register with the division, so that the definition includes any person making a telephone solicitation.

Current Law:  Only includes persons making specified false representations in a telephone solicitation.

Seller Requirements

1. Provides that all sellers that make telephone solicitations must register with the division.

Current Law:  Registration is required only if the seller makes a solicitation involving consideration of more than $100 and less than $50,000.

2. Makes technical changes to the deceptive consumer sales act concerning violations of the caller ID statute.

Studies for Future Legislation

Urges the legislative council to assign to the interim study committee on corrections and criminal code the task of studying the following:

1. Whether existing criminal penalties for violations of specified telephone solicitation statutes should be increased.
2. The potential effects of increasing criminal penalties for violations of the statutes on:
   1. The ability of the office of the attorney general to enforce compliance with the statutes; and
   2. The state's criminal justice system.
3. Reconciling state and federal laws concerning the Do Not Call registry and other telephone privacy laws.

In Conclusion

The Indiana telemarketing requirements are an example of similar tough legislation on the horizon. As the states intensify their fight against telemarketers, you will see tougher rules and more penalties against executives of the companies involved. In today’s regulatory environment, telemarketers must continue to diligently ensure that all federal and state regulations are followed. As we see in Indiana, this risk is not just the loss of your business from the weight of fines and penalties. Now, there is an even greater risk to the personal finances of the individuals managing the business operations which should not be taken lightly.