Telemarketing rules (Rule 3230)

Cold calls run from 8 a.m. to 9 p.m., their time

When can a rep pick up the phone and call a stranger about stocks? A cold call is a sales call to someone who didn't ask you to call. Telemarketing means selling over the phone, cold calls included. FINRA Rule 3230 sets the limits.

Say Jake is a rep in Los Angeles. He wants to call a prospect at home in New York. A prospect is someone who isn't a customer yet. The rule says calls to someone's home are allowed only between 8 a.m. and 9 p.m.

Those hours run on the local time where the person you're calling is. That's New York time, not Jake's. New York is three hours ahead of Los Angeles. 8 a.m. in New York is 5 a.m. for Jake.

The common mistake is using the caller's own clock. If Jake calls at 7 p.m. his time, it's 10 p.m. in New York, and that's too late. Call homes only from 8 a.m. to 9 p.m., on the clock of the person you're calling.

A do-not-call request is honored within 30 days

What if someone tells a rep to stop calling? A do-not-call list is a list of people who said they don't want sales calls. There are two kinds. Each firm keeps its own list. The government keeps a national one, called the national do-not-call registry.

Say a prospect tells Jake, put me on your do-not-call list. The firm records the request and adds him to its own list. The firm must honor that request within a reasonable time. That time can't be more than 30 days from the request.

People can also put their number on the national registry. Firms check their calls against a copy of it that's no more than 31 days old. The common mistake is mixing up 30 and 31. Thirty days is for honoring a request to the firm. Thirty-one days is how old the registry copy can be.

When someone asks your firm to stop calling, put them on the firm's list and honor it within 30 days.

A recent business relationship lets the firm call

When can a firm call a number on the national do-not-call registry? It can if it has an established business relationship with the person. An established business relationship is a recent link between the person and the firm. Two kinds count.

The first is a customer link: a trade, a position or account activity with the firm in the last 18 months. The second is a question about the firm's products or services in the last 3 months.

Say Ana's number is on the registry. She asked Jake's firm about its services two months ago. That's inside 3 months, so Jake may call her. Signed, written permission from the person to call also works.

A direct request beats all of this. If a customer asks the firm to stop, it adds him to its own list. The calling hours have exceptions too. The 8-to-9 limit doesn't apply with a relationship, with permission, or when calling a broker-dealer.

The common mistake is mixing up the windows. Activity counts for 18 months, and a question for only 3. A recent link with the firm lets it call a registry number.

Worked example: can the Denver rep call Boston?

1. A rep in Denver wants to call a prospect in Boston at 6 p.m. Denver time. The number is on the national registry. The prospect asked about the firm's services six weeks ago.
2. Check one is their clock, because the hours run on the called person's time. Boston is two hours ahead, so 6 p.m. in Denver is 8 p.m. in Boston.
3. Eight p.m. is before the 9 p.m. cutoff, so the time is fine.
4. Check two is the registry. A question in the last 3 months is an established business relationship. Six weeks is inside that, so the registry doesn't block the call.
5. The call is allowed. If the rep waits until 7:30 Denver time, it's 9:30 in Boston, and that's too late.

Common mistakes

their clock, not yours

You used your own clock instead of theirs. The 8 a.m. to 9 p.m. window runs on the called party's local time. Calling New York from Los Angeles? 8 a.m. in New York is 5 a.m. for you. Always use their clock, not yours.