Maximizing Consumer Contacts while Mitigating TCPA Risk

 

A common myth in collections is that agencies and creditors cannot comply with the TCPA's often puzzling language for autodialed calls while simultaneously maximizing right-party contacts to grow business.

With TCPA lawsuits at a record high and rising, it's clearly dangerous ground. Does TCPA compliance have to mean call center performance and operational efficiencies suffer? FTC veteran and Neustar Chief Privacy Officer Becky Burr and Neustar Executive Director of Risk Solutions Adam Russell share industry-proven methods to ease your TCPA risk while improving overall performance. This webinar will review:

  • What credit and collections agencies need to know about new TCPA regulations
  • Best practices for mitigating TCPA compliance risk and protecting brand reputation
  • Case studies on using authoritative phone data to significantly improve operational efficiencies and increase right-party contact rates
 

Video Transcript

Operator:

Now without further delay, let's begin today's event, once again, sponsored by Neustar and hosted by Collections & Credit Risk. It's my pleasure to introduce your moderator for today, and that is Darren Waggoner. Darren, you have the floor.

Darren Waggoner:

Good afternoon, and welcome. I'm Darren Waggoner, Chief Editor of CCR Newsline from Collections & Credit Risk. It's my pleasure to introduce our speakers for today's seminar, Maximizing Consumer Contacts While Mitigating TCPA Risk.

Becky Burr is Deputy General Counsel and Chief Privacy Officer at Neustar. Becky joined Neustar in 2012. Among her many duties, she is in charge of ensuring Neustar maintains highest-quality privacy and data security, to protect consumer information.

Previously, she was a partner at Wilmer Hale, practicing in the Communications, Privacy, and Internet Law Practice Group. She is a veteran of the FTC and Commerce Department's National Telecommunications and Information Administration.

Adam Russell is Neustar's Executive Director of Risk Solutions, handling industry and product-development growth. He has 18 years in financial services, including previously serving as Senior Vice President of Consumer and Small Business Credit Cards at SunTrust Bank. He also has served as Vice President of Strategic Accounts at Experian Information Solutions and spent 13 years at Capital One in a variety of leadership roles.

Adam and Becky, thank you. Becky, the floor is yours.

Becky Burr:

Thanks very much. Greetings to everybody on the call today.

We all are probably being inundated with concerns about TCPA and trying to ferret out what the rules are and what they mean. So we hope we can help you with that today. And our focus will be avoiding some of the TCPA traps that come with massive number porting from wire-line to wireless and consumers cutting the cord and going all wireless.

So there are a couple of rules that regulate telemarketing and auto-dialed or prerecorded commercial messages, including the Telephone Consumer Protection Act, or TCPA, which we are going to be talking about today and which is administered by the Federal Communications Commission.

There is also the Telemarketing Sales Rule that is administrated, in part, by -- enforced by the Federal Trade Commission, which is a little different and the source of the Do Not Call List.

So TCPA, in a nutshell, prohibits the use of auto-dialers or prerecorded messaging to emergency lines, to healthcare facilities, to wireless numbers, or any called-party pays number without the prior express consent of the called party.

So when we're talking about any called-party pays number, that has been held by the courts to include texted messaging. It also in one case has been held by a court to cover VoIP calls in addition -- or potentially cover VoIP calls.

Subject to some specific exemptions, it prohibits nonemergency prerecorded calls to residential lines without the prior express consent of the called party. It also has limits on using faxed advertisements. We're not focusing on that today. And although it has only limited application to numbers registered by businesses, it does include some prohibitions on the use of auto-dialers to tie up business lines.

And let me just say, we're going to be talking about this issue of business lines versus consumers. But when I say the business applications are limited, that means numbers that are registered by businesses, as opposed to somebody -- an individual business mobile number, which would still be covered.

The question of the day is, does TCPA apply to you? And the questions that determine the answer are -- are you using an auto-dialer? As it turns out, that's a lot trickier than it may seem. Are you sending a prerecorded message to either a landline or a wireless number? That's a pretty easy one. Do you have the prior express consent of the called party? As we'll see, that's taken some new twists and turns in new regulations.

A lot of people will say, well, wait a second. I have an established business relationship with the party I'm calling. And as you'll see, new FCC regulations essentially limit the established-business-relation exception. And we're also going to talk about what happens if you get it wrong.

So the first hard question is, are you using an auto-dialer? I think all of us in our minds understand what an auto-dialer is. And it's defined in the regulation as an automatic dialing system, equipment that can be used to store or produce numbers to be called using a random or sequential number generator and to dial those numbers.

So that's pretty traditional. It's going to call numbers sequentially. It's going to dial numbers randomly. It turns out you should not take any comfort in the use of the random sequential number generator, because both courts and the Federal Communications have essentially held that if the -- if it can store and auto-dial numbers, it's an auto-dialer, even if you don't use it for auto-dialing.

So for example, an auto-dialer in preview mode, where you're actually looking at a number and when pressing a button to dial -- if the equipment has the capacity for automatic dialing, it has been held to be covered in all calls, even when preview mode applied.

The FCC also has stated very clearly that this covers equipment that is used to call numbers from calling lists or CRM lists. So it's not just randomly or sequentially generated numbers that call, but from your own calling lists -- your own prospect list, your own customer list. If it has the capacity to auto-dial those numbers, it is covered calls.

The other question that is particularly difficult to know these days is whether you're calling a landline or a wireless number. It is very difficult to know with any certainty over any period of time whether a number that was a landline remains a landline or has, in fact, been ported either to a wireless carrier for the same subscriber's use, or whether a wireless number that you previously collected consent for has been ported to somebody -- has been transferred to somebody else with whom you have no -- from whom you have no consent.

So a lot of -- what people ask is, how do I find out whether I'm dialing a wire line or a wireless number? And it's difficult. One court has said, for example, well, you could use a reverse directory. But wireless numbers are typically not listed. And as -- something like 38% of US homes right now are wireless only, and an additional 16% of US households essentially -- may have a wireless call -- or a wire line, but never use it. We're talking about well over half of the population who are likely to give you numbers that are wireless.

The other question that you need to understand in this is, who's the called party? And this one is a little bit -- it has become a bit of a surprise through court interpretation. It's who you call -- in other words, the subscriber at the time you dial the number, not the person you intend to call.

So if you get consent from somebody who is then a subscriber to a wireless number, and that person, that individual who's provided you consent subsequently turns in their telephone number and that's reassigned to somebody else -- even if you had perfectly good consent at the beginning, you no longer have consent when the subscriber has changed. So that means you need the consent of the subscriber assigned to the number at the time you make that call.

The other thing that has changed, and changed quite recently, is that the definition of prior express consent under the FCC rules has changed rather dramatically with respect to telemarketing calls.

So previously the FCC essentially allowed one to make the assumption that if somebody gave you a wireless number, then they were consenting to receive calls or communications on that.

The FCC as of October 16 of last year has adopted a rule that follows the Federal Trade Commission's rule, with respect to the Telephone Sales Rule. So in order to demonstrate that you have consumers' consent, or a subscriber's consent, you have the burden of showing that the person you're calling received clear and conspicuous disclosure of the consequences of providing the requested consent -- in other words, that -- the receipt of -- that they -- if they gave you the number and agreed, they would receive prerecorded or auto-dialed calls from you.

Then you have the burden of showing that the individual unambiguously agreed to receive those kinds of calls -- and not just any kind of calls, but calls using automated dialing equipment.

In the cases of telemarketing, the FCC now requires that consent must be signed by the consumer who's consenting -- and that does not mean that you have to have a written consent on a piece of paper, but you have to have some evidence, some action that qualifies for a signature under the E-Sign Act .

And you also can't make -- you must communicate to the individual that they don't have to agree to receive auto-dialed or prerecorded calls in order to purchase goods or services that they're looking for. And again, as I said, it is the caller or the seller of the goods or service who bears the burden of demonstrating adequate disclosure and consent.

Now, one issue that I think is a source of a great deal of consternation is that there are lots of folks in mobile marketing who have complied for years with very, very strict regulations about consent and opt-in consent. And unfortunately the way the new rule reads, it specifies that information that must be provided in the course of getting that consent -- including the fact that you have to disclose that you're using auto-dialed or automatic dialing equipment.

So even in the cases where mobile marketers have followed all of the best practices for really clear opt-in, it's unlikely that they would have used the magic language about using automated dialing equipment. So even if those cases where it couldn't be clearer that there is real consent, there is some compliance concern, here.

You all should talk to your lawyers about what kind of consent you need for telemarketing. I've put an example up here that has all of the elements -- in other words, it says, if you give up a phone number, this is optional. Don't include a mobile or pager number unless you want to -- or you agree to do that, to receive calls or text messages. And then, a clear -- by click and submit, you agree to be contacted at this.

As I said, we're not providing legal advice, but I wanted to show something that had sort of all of the elements up there; but all of you should be comfortable getting assurances from your legal counsel that -- since you're doing marketing, you're getting this kind of written consent.

A lot of things that have surprised folks under the new rules is that -- essentially, the established business relationship has completely gone away. It basically allowed prerecorded calls to residential lines where there was an established business relationship. That's gone. You need the express prior written consent.

This issue, the TCPA stuff, has become over the last couple of years really the favorite and most popular source of class-action litigation. And there's a reason for that.

First of all, there is a private right of action under the Telephone Consumer Protection Act. So while you could be subject to FCC penalties that are quite large -- in the $16,000 per incident range -- the bigger risk is the fact that even without showing any harm at all, you can be liable in a class-action litigation for between $500 to $1,500 per violation of the TCPA.

And we list a couple of pretty high-profile settlements and litigation involving Jiffy Lube, SalliMae, Papa John's, Steve Madden. They're all multi-million-dollar settlements.

There was just recently a settlement in a class-action litigation that was rejected by the court, on the grounds that it was too low. Given the fact that individuals were entitled to civil penalties in the $500 to $1,500 range, the court basically said it had no comfort that a settlement that amounted to something like $50 per violation, and could have been much less, was adequate. So the courts are enforcing this on both ends of the equation.

So a lot of people have said, okay, what am I going to do? How do I possibly communicate efficiently without running afoul of the TCPA?

And as I said, the Seventh Circuit in the Soppet case, which was the case that said, even if you had good consent from a wireless subscriber, if that subscriber -- if that individual is no longer the subscriber and you make a call to that number, you're on the hook. The Seventh Circuit said, okay, well, how about you have a person make a first call and then switch to a predictive dialer.

Unfortunately, that doesn't really help you, because it does not protect you in a case where the number is ported from one subscriber to another. And although there are some lags between the time a number is turned in and reassigned, in popular area codes the amount of time it takes to reassign a number can be actually very, very small.

As I said, the court also said, use a reverse lookup to identify the current subscriber, but of course, that doesn't work where the number is unlisted. And the other suggestion was that you (inaudible) get the advertiser to indemnify you -- something I'm sure all our advertisers would like to do.

So the better answers here with respect to making sure you know whether you're dialing a wireless number or a landline number and also whether you are dialing the right person -- the same person who gave you consent is to make sure that you're getting continuously updated and highly accurate phone data so that you will know what type of phone -- what type of number you're dialing and take steps to protect yourselves. You can increase your efficiency by filtering inactive numbers -- you know, verify the current subscriber for consent.

So we have sort of touched on the two biggest sources of risk there -- on the one hand, knowing whether you -- making sure you've got the kind of consent you need in any given situation. And then the other area that you have to pay attention to is, understanding whether you're dialing a wireless number or landline and understanding who the subscriber to those numbers would be.

I am at this point going to turn the ball over to Adam Russell to talk about a couple of other aspects of this. And then I believe we're going to take questions and answers at the end. Adam?

Adam Russell:

Thank you, Becky. And thanks to everyone again for joining the call.

Now that Becky's shared some best practices around complying with TCPA, I'd like to turn the conversation to the P&L implications and key strategies to maximize perform in a TCPA-compliant environment.

While TCPA has set out to protect consumers through responsible calling practices, it's really put a lot of pressure on the P&Ls for the organizations that are regulated by it. Banks, marketers, third-party agencies -- the entire industry seems to be impacted.

And the common response that I see in the clients that I work with is to take a couple of key steps to protect against TCPA, but it creates other problems.

The first one is to screen any calling lists for phone type. That's simply to answer the question, is this is a landline or a wireless number? And then to simply shift the wireless volume to a manual-dialing environment. This creates an operational problem.

The first one is that, in our expense and what we're seeing today is that 50% to 60% of the phone numbers in files are typically wireless numbers. And that number is only going to grow over time. On top of that, manual dialing can be up to 70% less efficient versus the efficiency of an auto-dialer; and I certainly saw that in my experience working on the credit-card side. Taken together, the overall outbound productivity can be reduced by 35% to 40% or more.

Other complications impacting the margins -- and I'm sure a lot of you are already seeing this -- industry consolidation. So, the smaller, mid-size players are new being scooped up by the larger players, making it harder and harder for the mid-size players to complete.

The supply of debt is increasingly limited, driving up costs for paper. Reputational risk is a risk is a big consideration for everybody involved. Nobody wants to end up on the front page of the New York Times or on Becky's next slide showing a class-action settlement for calling the wrong people, abuse of calling practices, and the like. And increasingly, contact data is becoming more and more complex and less available as people are cutting the cord and new technologies and channels are opening up.

And looking ahead, we see the challenges continuing. Here are several industry trends and predictions, summarized from a great article by Ginsberg and Anderson, that point to continued consolidation in the marketplace, where specifically those serving financial-services institutions -- the number that's going to be serving them is fewer is fewer.

On top of that, we're seeing centralization and consolidation within organizations, to where a single group now will be handling outbound activity to ensure consistency in the processes and the policies; but it's really narrowing down the field.

On top of that, and interestingly, the government is increasingly becoming the largest customer in this space, driven mainly by the rapid increase in student lending and the significant amount of tax debt and other paper that's becoming increasingly difficult to collect. And the irony here, of course, is that the very organization that is creating the regulatory challenges at times is also becoming the biggest customer for the industry. So it's an interesting trend to watch and something that we all need to be paying attention to.

And then the point earlier that I made about reputational risk we see continuing into the future. Put more positively, really setting customer satisfaction as a top KPI. And that benefits us all as consumers, but it also makes operating in this environment more challenging, as more and more restrictions are being placed on those that are involved in the outbound activity by their customers and by themselves, to be more compliant and to create a higher degree of customer satisfaction.

So with all these headwinds and continued challenges on the horizon, how are companies going to compete and survive in this environment? Well, let's take a look at what some of the leaders in the space are doing to stay ahead of the curve and to continue to create separation from the rest of the industry.

There are three categories of activity that we see the leaders in the industry taking. The first one is around verification, and this is really to ensure that the person that you're trying to reach is currently the owner of the phone number that you have associated with them.

This benefits you from a TCPA and reputational-risk perspective, but it also improves your ability to make sure you're getting the right person on the phone when you're making that outbound dial. It also frees up valuable resources in the manual-research space or skip-training portions of the process.

Secondly, updating and appending with the most accurate and up-to-date address and phone information is critical. This allows you to more efficiently and more effectively reach the people you're trying to get to. It can cut down on returned-mail consists, if you're sending the physical addresses. And again, it reduces the amount of manual involvement in the process.

And then thirdly, prioritizing the phone numbers inside of either the dialer or the manual environment, not only on ability to convert or collect, but also on the ability to reach these customers. Using new and differentiated data like phone activity is a great example of a way where you can understand who you're going to be able to reach by understanding how much outbound activity has been made on the phone.

Simply put, you don't want to call a phone number that hasn't had any outbound dials on it in 12 months. And that applies both in the manual environment, as well as in the dialer environment.

We'll talk about these methods in more detail and discuss a case study shortly. But first, let me give you a little background on Neustar and how we make this all possible.

At Neustar, we provides our clients with instant access to data and analytics, providing actual insights that dramatically improve decision-making. Neustar is the first real-time, cloud-based information services and analytics company, enabling clients to effectively promote and protect their business.

Through our roles as the administrator of the North American Numbering Plan, the administrator of local number portability, and the largest independent provider of caller ID services, Neustar sits in the middle of the digital and telecommunications ecosystem and powers billions of interactions every single day.

We started it all and continue to shape the industry today. We're pioneers of real-time, cloud-based information services and analytics. By using our unique, authoritative data combined with your information, we help inform high-volume decisions about your customers.

We also deliver actionable analytics so you can make high-value decisions, and we uncover insights for our clients, making complex problem solving easier for marketers, IT, and operations, through our suite of complete cloud-based workflow solutions. It's important to point out that everything we do is done in real-time, one customer interaction at a time.

Our trust has been earned through a proven legacy of managing complex authoritative data sets. Neustar provides instantaneous answers to more than 27 billion queries per day from the Internet and answers over 300,000 questions every second.

Every day, Neustar manages nearly 7 billion physical and virtual addresses. And in the US, Neustar also enables 6 billion daily text messages and 4 billion phone calls daily. Across the world, Neustar answers 2.1 billion daily customer client queries every day.

Advertisers need access to reliable third-party data. You need to ensure that your information is accurate, complete, and up-to-date so that you can feel confident with making the best possible decisions, strategically and in real-time when interacting with customers. But doing so is really difficult.

Just how big is the big data explosion? Every year, consumers change at least one piece of contact information on themselves, whether that's a name; an address; phone number, landline or mobile; email address, etc.

Over the course of the year, more than 100% of US consumer record information changes. So any record that you have as accurate at the beginning of the year will be inaccurate by the end of the year.

And here's why: 75 million consumers change their phone carrier; 45 million consumers change their phone number; and over 16 million consumer households relocate; and 2.1 million people legally change their name due to marriage or divorce or for security or vanity reasons. And that's happening every single year. And the pace of change is also increasing.

On top of that, publically available information has declined from 78% of US households in 2000 to only 30% today. And this is largely driven by cord-cutters, opt-out functionality, and the like. And almost 40 million households in the US are mobile phone only and therefore non-published.

Neustar addresses these challenges through its authoritative repository of name, address, phone, email, and IP address. With hundreds of authoritative data sources and proprietary relationships, Neustar is constantly updating this repository, literally every 15 minutes throughout the day, every single day. Eight billion record feeds per month, all updated in real-time, to give our clients the most accurate, up-to-date information available, anywhere in the industry.

So now let's take a look at how this approach is helping to solve the P&L challenges we discussed earlier.

Going back to what we were talking about before, verification is a key question to get answered. And simply what we're asking here is, is the phone number on your list associated with a given consumer?

By accessing Neustar's authoritative information, we're able to provide unmatched coverage and accuracy, literally up-to-the-date information on millions of real-time updates every single day to be able to answer that question.

But it doesn't just end there. Neustar has incredibly unique information on the phone numbers, themselves -- things like, is the phone number landline or mobile at this moment. Phone activity -- the level of outbound activity or inactivity that we've seen on a given phone number in the past month, two months, three months, and beyond.

We can help you understand if it's a business or consumer phone number, which could drive your strategy. Also, if it's a wireless phone, if it's a prepaid phone. Different information like that, all about those phone numbers that can help you optimize your strategy.

And then also, line porting -- so, has this phone number been ported. By managing over 600 million telephone numbers in the US, we have a unique, real-time view of landline versus mobile and, again, current ownership of that phone number so you can stay on top and protected, but also optimized so that you're reaching the right customers.

Neustar answers key questions based on a single query to power your business strategy and execution, questions like, is this person linked to the phone number that I have for them? Does the contact still own the phone? Is this phone a landline or wireless number? If it's a wireless, is it a prepaid? Is this contact information correct? And oftentimes, we can output corrected information to be able to access customers.

So here's how the solution can work. On the left-hand side, you see the input that would into the solution. It can be any combination of name, address, landline phone, mobile phone, email address.

We bring it to our solution in real-time, return a significant number of insights and outputs -- everything from a verification score, which tells you the strength in the ownership, how well that name goes together with the phone, or how badly does it go. We can tell you if it's authoritatively linked to somebody else.

We can tell you the current phone type, level of activity, business or consumer phone, prepaid, and the other items I mentioned earlier. And we can provide a similar level of detail on other inputs, like address and email address, and the like. And all of this can be done in real-time as you're sending the queries and then being able to act on them.

So now let's take a look at how this approach is helping to solve the P&L challenges that I mentioned earlier.

These are real results from a current client that is a third-party debt buyer, focusing on recently charged-off debt. The methodology was that our client provided the results of the prior month's outbound calling activity. This is before they worked with Neustar at all, so the current-state process. And they included on their records the outcomes of the calls, themselves -- where they able to make a right-party contact, or did they definitive not make a right-party contact.

We took the input file, and then we overlaid Neustar's verifications and attributes solutions onto the input file and uncovered very strong results, aimed at improving right-party contact rates, which was the metric that they were looking to optimize.

All ratings of good versus bad phone numbers were defined by our client, based on what they were able to achieve in their own calling actions.

This slide shows the performance of the verification solution, itself, which speaks to the ownership of the phone number; and for our purposes, we're going to be looking specifically at tier A, which is right here, and tier C, right here.

Tier A is saying specifically that the phone and the name are linked, based on our authoritative repository and all of the updates and the feeds that we receive. Whereas tier C says that the phone is authoritatively linked to a different individual.

A few points I wanted to highlight, here. If we looked at the tier-A population, based on what our clients experience, 48% of the phone numbers in that population were deemed good by our clients. Comparing that to tier C, where we were saying that the phone was linked to a different name, only 8% of the phone numbers in there were considered to be good phone numbers by our client. So there was a six-times greater likelihood to reach the persons they were trying to reach when that customer was a tier A versus a tier C.

Next up, bad-to-good ratio. This is really speaking to how many bad phone numbers do you have to go through before you're able to get a right-party contact. In tier C, they had to go through 12 phone numbers before they'd actually reach the right person. In tier A, it was nearly a one-to-one ratio.

And then if you look at the percentage of bads and goods, what we were able to help them understand was, if you're looking specifically at tier C, 49% of the bad phone numbers in the entire file were resident in tier C, whereas only 11% of the good numbers were.

So if they were to simply say, let's take the numbers that Neustar tells me are tier C, that are linked to a different person, and remove them from my dialing efforts, they would cut 49% of the bad phone numbers out of the file and only lose 11% of the good numbers.

The next solution that we looked at was the phone-activity piece. And for our purposes here, we summarized them into simply active phones, meaning we saw an outbound dial from that phone, or inactive, or within active, if we'd seen no activity from that phone in the past year. And again, what we end up seeing is really good separation and rank ordering.

Active phone numbers -- 46% of them were deemed good by our client, compared to only 4% in the no-activity 12-plus-month category. The bad-to-good ratios are even more pronounced. You have to go through 24 bad phone numbers in the no-active group before you get a good one, whereas the active phones were, again, close to a one-to-one ratio.

And again, looking back at the percentage of bads -- by eliminating the no-activity group, you can cut 40% -- our client was able to cut 40% of their bad phone numbers out of their file and only lose 4% of the good phone numbers.

And then we said, well, let's see if we can get even better precision or better impact. So we brought the solutions together into the heat map, and let me walk you through this. So this is simply the results from both solutions brought together.

If you look here, across the top, this is the verification solution I showed you a couple of slides ago. If you look to the left-hand side, you have active, inactive, and no activity, which is from the prior slide. But now you're seeing the more granular level of activity that we're able to provide. So you see it in two different groupings.

So these speak to one, two consecutive months, three consecutive months active, or 12 consecutive months or more active, meaning outbound dials; conversely, inactivity at those ranges, as well; and again, no activity for 12-plus months.

The percentages that you see in the boxes refer to the percent of phone numbers in each of those groups that are deemed good by our customer, based on their outbound activity.

So in the box I'm pointing at right here, 71% of the phone numbers they were able to make a good right-party contact and speak with the right person. Compare that at the opposite end of the grouping, tier-C inactives, only 3% -- in other words, 97% of the phone numbers were bad in that group. And what you can do is create this mapping and more surgically, with more precision, be able to go in and make business decisions as to what you want to do.

In this case, our client elected to cut out the no-activity, tier-C, and tier-B inactive populations. And what that ended up doing was removing 53% of identified bad phone numbers from their calling file and still retaining 92% of the good numbers.

Again, what our client was trying to optimize for was efficiency and right-party contact rate; and they were able to cut more than half of the bad phone numbers out of the list and still retain a lot of the valuable phone numbers where they were making a right-party contact.

And the good news here is that our solutions provide a lot of flexibility to enable a level of precision that your strategy and business practices require. With similar results, you might make different decisions as to where you draw your line. But we provide this level of transparency and directions to that you can make the right business decisions to optimize for your P&L.

By utilizing Neustar solutions, our client in this example, and many others in the industry, are driving significant improvements in their outbound calling strategies.

Closing the manual-dialing productivity gap is a big one, increasing ops (ph) capacity and performance, reducing TCPA and reputational risk -- all of those needs are being met by having more intelligence, more precision around your dialing strategies, and incorporating more of this data, more of that hard-to-access data into your strategies and execution.

Additionally, a number of our clients are using these insights to measure and manage their data-supplier effectiveness. So whether you're using a skip-trace company or process, or if you're using other data-feed lists and things like that -- by overlaying Neustar solutions and understanding the effectiveness of them, you can have those conversations back with those suppliers and make better business decisions with them, provide better feedback and better management of your supply chain.

Lastly, these solutions pair very well with other Neustar services, like phone-address append, scoring and segmentation, and a variety of others.

As we started the discussion, the P&L challenges in the industry have become more pronounced. And as I said, we expect this trend to continue into the future. The leaders in the space are taking proactive steps now to optimize their operational performance and risk exposure through real-time verification, accessing restrictive, hard-to-find data, and gaining insights on phone numbers, like activity, phone type, business/consumer, and so on.

Neustar is helping these clients to create the needed performance and margins to create separation from the industry, and we're here to help your business, as well.

Thank you for your time, and I'd like to turn it over to Darren for Q&A.

Darren Waggoner:

All right. Thank you, Adam, and thank you, Becky. We do have several questions that have been submitted, and I believe we have time to get through several. Our first one is -- there is new technology that places a message on a voicemail without making a call to the cell phone. Does the TCPA apply in this space?

Becky Burr:

So, it places a message on a wireless email -- voicemail storage -- I think that I'm understanding that -- but it doesn't place the call.

I think that the answer to that is unknown, based on any of the interpretations that we have out there. The question would be -- doesn't sound like it's a wireless call or a call to a wireless number. The question would be, does it have any implications for a called-party pays fee schedule?

So it depends on how the charges get accrued. It's not intuitively a call to a cell number, and since it doesn't -- depending on whether it results in the possibility of a call or a charge to the wireless subscriber I think would probably be the turning point. Although I have to say, I'm not familiar with this technology, so I'd want to look closely at it to make sure I knew how it was working.

Darren Waggoner:

Okay. Thank you, Becky. Our second question is simply, does the TCPA apply to first-party collections?

Becky Burr:

Well, that's a very interesting question. It clearly is not -- if you're calling a collection call, it is clearly not a telemarketing call. But it could be -- but it certainly could be covered by the other provisions of the TCPA which don't turn on whether it's a marketing call or has an established business relationship.

So the question would be, if you have that number, do you have permission from the individual you're calling to call them on the wireless number. And here where it's not telemarketing, the FCC would permit you to continue to rely on the fact that the number -- that the consumer gave you the number as consent to be called on that.

Darren Waggoner:

Okay. Thank you, Becky. Our third question is -- when you describe the client "good percentages," are you saying that they had a right-party contact, or that they confirmed that the phone number belongs to that consumer and it continues? It's a different issue of whether you get a right-party contact compared to a TCPA violation.

Adam Russell:

So I'll handle that one. In this case, the way that the client was defining good, it was that they were able to get -- actually have the conversation with the person they were trying to reach on an outbound dial. Again, what they were trying to optimize for was talking to the right person, while being TCPA compliant, of course. So that's the way that they were defining it for us.

Darren Waggoner:

Okay. Thank you. Our fourth question is -- do rules differ for sales calls versus collection calls?

Becky Burr:

So the short answer to that is, yes. The question is, how different?

Sales calls, marketing calls, are subject to the new, strict, express written -- prior express written consent, which does not permit you to depend on the fact that somebody gave you that number as evidence of consent.

In the case of a first-party collection, TCPA would apply. But again, if you have that number from the consumer, the FCC would permit you to infer from the fact that they gave it to you that they were willing to be called there.

In terms of third-party collections, there is actually quite a bit of confusion. The FCC has said, essentially, that TCPA doesn't apply. But courts have rejected that interpretation.

Again, whether it's first or third party, if TCPA applies and it's collection as opposed to telemarketing, you need prior express consent, but it doesn't have to be the prior express written consent.

And again, of course, there's some confusion as to whether a third-party collector could rely on whatever consent the original credit provider acquired; and that's going to turn on the nature of the collection relationship.

Darren Waggoner:

Thank you, Becky. Another question we have is -- how does the TCPA differ for the primary lender versus a third party, or does it?

Becky Burr:

So that was just what I was talking -- speaking to. The question -- again, the FCC has said it doesn't apply to debt collections, but the courts have rejected that notion.

It's not a telemarketing call in either case, but there is some question as to whether third-party debt collectors can rely on whatever consent the lenders or the provider of credit got, with respect to calling. And it's worth noting that some of the biggest cases in TCPA have been related to credit -- to collections practices. So it's worth being quite careful.

Darren Waggoner:

Thank you. Another question we have is -- why should my business worry about compliance right now? We haven't had any problems.

Becky Burr:

Well, I think that the first thing we should say is congratulations and may your luck continue to hold. The second answer to that is that what's required for consent changed rather dramatically in October, and that's fairly recent. And then the final answer is -- as I said, this year-over-year increase in TCPA class-action litigation is extraordinary. It continues to be the fastest-growing area and I think has for several years been the most popular source of class-action litigation.

And nobody needs to be harmed to -- you don't need to demonstrate any harm. You just need to demonstrate that a lot of people received auto-dialed calls to get a plaintiff's attorney interested in it.

And even if you haven't really -- no matter what the sort of equities and answers are in the case, you just don't want to be in somebody's gun sights, because any kind of class-action litigation is expensive, including expensive to settle. And the point in a case was, as I said, a recent decision where a proposed $6-million settlement was rejected by a court as not being clearly a high enough recovery or an appropriate recovery, given the statutory damages.

Darren Waggoner:

Thanks, Becky. Another question that came in -- how are push notifications affected by the law?

Becky Burr:

The push notifications, to the extent that they are dependent on text messaging or telecom -- they're going to be covered as -- if it's a wireless -- if it's a call to a wireless device, or a text to a wireless device. And again, you still have to consider whether the push notifications are telemarketing or some other kind of messaging that's not marketing.

Darren Waggoner:

Okay. Thanks, Becky. One question here -- what are the differences with Neustar data from other providers?

Becky Burr:

Adam, why don't you take that one.

Adam Russell:

Sure, absolutely. So going back to what I mentioned earlier, probably the biggest difference is twofold.

One, that we have unique roles that we play that nobody else does -- for instance, the administrator of local number portability, the administrator of the North American Numbering Plan. On top of that, we have proprietary relationships with hundreds of telco providers and other billing relationships and the like.

Brought together, that provides us with access to very difficult-to-find, very unique information. And our frequency of update -- again, 8 billion record updates per month -- is what keeps that information as fresh as possible.

One thing I will point out is, we are a privacy-by-design company, so we're very careful with the amount of information that we're able to share. So it all boils down to exactly what business problems you're trying to solve, and we can work with you to help structure how we can help to answer those questions. But there will be limitations to a certain amount of information that we can share, again, because we want to respect the privacy of the consumers and all of our partnerships.

Darren Waggoner:

Thanks, Adam. I think we have time for one more question, and that is -- how does the TCPA apply to small business?

Becky Burr:

The TCPA does not apply to a call to a business number. So if a number is -- if it's a wire-line business number, the limits aren't going to apply. If it is a wireless number, then there's no distinction between consumers versus businesses. And because the established-business-relationship rule has been eliminated, essentially there really is no distinction between a call to a business wireless number and a consumer wireless number.

Darren Waggoner:

All right. Thank you, Becky, and thank you, Adam. That's all the time we have today.

I want to thank everyone for attending today's seminar. And on behalf of Neustar and Collections & Credit Risk, we hope you have a great rest of the day. Thanks again. Thanks, Becky and Adam.

Becky Burr:

Thanks.

Adam Russell:

Thank you.