Calling & texting: How insurance companies can be compliant

External communications are one of the most important elements in business operations today. Calling and texting consumers is a very effective means to drive engagement, and ultimately, sales. In fact, text messaging has outpaced email when looking at conversion and click-thru rates.

Calling and texting are great tools to engage consumers, but it is not without legal and regulatory risks. Insurance companies must be mindful of the FCC’s Telephone Consumer Protection Act (TCPA), a regulation that has already put thousands of companies in the compliance crosshairs.

Over the past decade, the number of TCPA lawsuits has increased tenfold. With penalties of up to $1,500 per text/call in violation and the cost of an average TCPA settlement over $6 million, the potential threat the TCPA poses to a firm’s bottom line and reputation are real.

Insurance companies can put their business at legal and financial risk each time they act on a lead because the TCPA allows consumers and law firms to bring lawsuits over even minor compliance lapses. This is true even when a franchise, subsidiary, or storefront engages with a consumer. The insurance industry is obviously not immune to TCPA lawsuits — consider the following:

• Metlife: $23 million
• Nationwide: $5 million
• Allstate: $10.5 million
• State Farm: $7 million
• Anthem: $6.25 million
• And on and on…

This resource is not intended to be a scare tactic. The TCPA has created an entire industry of professional plaintiffs and opportunistic law firms who actively seek to capitalize on allegations of TCPA violations. TCPA lawsuits are rampant, and consumers are more aware now than ever of their rights. However, with proper compliance parameters in place, your company can enjoy the benefits of texting/calling consumers with peace of mind.

Top 5 compliance considerations

1. Obtain consent. This is not achieved by simply having a number provided by the consumer or by purchasing a lead from a lead generation source. Instead, the consumer must positively agree to receive promotional calls/texts by automated means from a specific company. This is done through a clear disclosure and often accompanied by an unchecked checkbox.
2. Honor opt-outs. This seems obvious, right? Provide instructions on how to opt-out and look for other phrases like “stop/quit/cancel.” If a consumer says to stop calling them, this should be honored across texting channels, as well. Opt-outs should be honored immediately with the most common texting and calling platforms.
3. Keep records. If a complaint is received, companies want to be able to respond confidently, and records are the only way to do that. The vital records to maintain are calling and texting records (the phone numbers contacted, the date/time of the contact, and the content of the text or call recording), consent opt-in forms, and opt-out requests from consumers with dates. Ask yourself: what records do you need to prove you had consent, and what records prove you didn’t call or text a consumer after they opted out.
4. Only call/text consumers between the hours of 8 AM and 9 PM, according to their time zone. Determine the consumer’s location from their address and not their phone number due to cellphone mobility. If a call/text occurs to a California number at 8 PM, but the phone owner lives in New York, a few complaints may be coming.
5. Monitor compliance with these items. Another one that seems obvious, yet most companies fail to do so, and one can see what happens by reading the above. It’s a virtual guarantee that issues will be with most audits.

Paul Gipson is the director of marketing compliance services for CompliancePoint. To contact CompliancePoint, send an email to connect@compliancepoint.com or call (770) 255-1100. 

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