Telemarketing

The FINRA telemarketing rule's principal-level testable content overlaps with the federal Telephone Consumer Protection Act (TCPA), but the exam tests the FINRA rule: the time-of-day restriction, the two DNC layers, and the EBR exception.

Time-of-Day Restrictions

Outbound telephone calls to a person's residence are prohibited:

• Before 8:00 a.m. local time at the called party's location
• After 9:00 p.m. local time at the called party's location

The clock runs by the recipient's location, not the caller's. A New York firm calling Los Angeles must use Pacific local time as the controlling clock.

Time-Window Exceptions

The 8 a.m. to 9 p.m. window does not apply when:

• The called party has given prior express invitation or permission to call outside the window
• The person has qualifying financial transactions, security positions, money balances, or account activity with the firm or its clearing firm within the previous 18 months
• The called person is a broker-dealer

Exam Tip: Gotchas

• The 8 a.m. to 9 p.m. window is local time at the called party's location, not the calling firm's location. A New York firm (Eastern time) calling Los Angeles can call until midnight Eastern (9 p.m. Pacific). The exam will hand you a fact pattern with the firm in one time zone and the consumer in another and test whether you know which clock controls.
• The hours exception uses the specified financial-relationship test. An inquiry within three months can support a national-registry exception but does not by itself permit a 7 a.m. call. Express permission for that call is a separate route.

Two Required Do-Not-Call Layers

The telemarketing rule requires firms to maintain two independent do-not-call protections:

Think of it this way: The two layers are separate filters. A consumer can be on the national registry (no firm can call) or on the firm's list (this firm cannot call) or both. A consumer who is an existing customer of the firm is exempt from the national-registry filter but not from the firm-specific list (the customer can always tell the firm "stop calling me").

Firm-Specific DNC List Requirements

For the firm-specific list, the firm must:

• Maintain written policies for adding names to and managing the list
• Train all personnel involved in any telemarketing on the list's existence and use
• Honor requests within a reasonable time that does not exceed 30 days
• Record the request and add the number to the list when received; the outer implementation limit is not an automatic grace period

National DNC Registry Scrubbing

For the national registry, the firm must:

• Subscribe to or obtain access to the FTC's national DNC registry
• Scrub outbound calls against the registry version obtained no more than 31 days before the call
• Document the scrubbing process and date
• Maintain records sufficient to demonstrate compliance

Exam Tip: Gotchas

• The national-registry scrub uses a copy obtained within 31 days, not the most current version. A scrub done with a 32-day-old copy violates the telemarketing rule. The exam tests this number; do not confuse it with the 30-day DNC honor period.
• An existing customer can still be on the firm's own DNC list even if they do not qualify for federal-registry protection. The two layers operate independently.

The Existing Business Relationship (EBR) Exception

The EBR exception carves existing customers out of the national DNC registry filter. An EBR exists if:

• The person has a qualifying financial transaction, security position, money balance, or account activity with the firm or its clearing firm within 18 months, OR
• The firm was the person's broker-dealer of record within 18 months, OR
• The person inquired about the firm's product or service within 3 months

These relationships can support the national-registry exception, but only the specified financial-activity category supplies the relationship-based calling-hours exception. Signed written permission and an associated person's qualifying personal relationship are additional national-registry exceptions. The firm's own stop-call list and other applicable restrictions remain separate.

Exam Tip: Gotchas

• The transaction-based EBR is 18 months from the last transaction; the inquiry-based EBR is 3 months from the last inquiry. The exam tests both numbers as separate facts.
• An EBR exempts the call from the national registry, not from the firm's own DNC list. The exam will sometimes describe an existing customer who has told the firm "stop calling me" and ask whether the firm can still call. The answer is no; the firm-specific DNC list overrides the EBR.

Caller-ID and Disclosure Requirements

The telemarketing rule's caller-ID provisions require that outbound caller-ID transmits:

• The firm's name when made available by its telephone carrier
• A phone number that allows the recipient to make a do-not-call request
• The number transmitted must be answered during regular business hours

The firm may not block caller-identification transmission. The number must permit a do-not-call request during regular business hours. A dead number fails that requirement; compliance does not depend solely on whether the firm uses a person or an effective automated process.

Exam Tip: Gotchas

• The transmitted number must permit stop-call requests during regular business hours. A non-working number does not satisfy that duty even if the original call otherwise complied.

Wireless Numbers and Auto-Dialed Calls

Calls to wireless (cell) numbers and the use of automatic telephone dialing systems or prerecorded voice messages receive heightened protection under both the FINRA telemarketing rule and the federal TCPA:

• Calls to wireless numbers are subject to the rule, including time-of-day and DNC restrictions
• Use of an automatic dialer or prerecorded voice message to a wireless number requires prior express written consent of the called party
• The consent must authorize the identified firm's covered calls to the specified number. For FINRA-covered prerecorded calls, the written agreement follows a clear disclosure, includes the recipient's signature, and cannot be required as a condition of opening an account or purchasing a service.

Exam Tip: Gotchas

• Auto-dialed or prerecorded calls to wireless numbers require prior express written consent, not merely an EBR. The heightened consent for autodialers does not have an EBR exception. A firm that auto-dials existing customers' cell phones without prior written consent violates the rule even though the call would otherwise satisfy the EBR exception.

Recordkeeping

The telemarketing rule requires that records of:

• The firm-specific DNC list (every entry, with date added)
• The national-registry scrubbing process (registry copy date, scrub date, methodology)
• Caller-ID transmission verification
• Prior express written consent records for wireless autodialer calls

be retained under the general communications-record framework: at least 3 years, with the most recent 2 years in an easily accessible place.

What Should You Check on Exam Day?

• Can you state whose local time controls the 8 a.m. to 9 p.m. calling window: the called party's location, not the firm's?
• Do you know the maximum age of the national do-not-call registry copy a firm may scrub against: 31 days?
• Can you distinguish the transaction-based EBR window (18 months) from the inquiry-based EBR window (3 months)?
• Do you know why an auto-dialed or prerecorded call to a wireless number needs prior express written consent, even for an existing customer under the EBR exception?