Consider a hypothetical example: A solar energy company wants to expand its outbound calling operations and engages additional vendors for lead generation, dialing software and outside call center services. As expected, the solar company initially presents standard, one-sided contract terms to all vendors, including placing sole compliance risk on the vendors and requiring complete indemnity. The smaller vendors are quick to sign off, some of them without even reading the document, because they desperately need the money. Sadly, these are the same vendors (the smaller ones) who are sometimes more inclined to make compliance mistakes as they rarely have their own compliance department or outside counsel. The larger vendors, by contrast, redline the solar brand's contract and propose reasonable modifications to make the compliance and indemnity obligations more mutual. After some negotiation, a number of contracts are signed. All is well for several months.
In time though, a nasty legal demand arrives, containing several allegations and threatening a class action. The demand alleges that a so called "opt in" lead was fake and the autodialed calls lacked consent. It also alleges internal DNC violations since additional calls were made after the consumer opted out. The lead generator, one of several small lead vendors selected by the solar company, is identified as responsible for supplying the lead at issue. The solar company is upset with the lead vendor because they thought they were buying only consent leads. The lead vendor swears the opt in was real and is mad that the solar company kept calling after the opt out, regardless. The call center vendor claims they flagged the lead as DNC after the first call, but it appears the client had re-uploaded the lead back into the system thereafter, hence the additional calls. The solar company feels the call center should have still recognized the number as a DNC and not called it, regardless whether the lead showed back up in the system. The dialer vendor does not want to be involved at all because they were merely "the tech" and had no control over the calls themselves. However, the call center feels the dialing software's DNC interface isn't user-friendly enough and that made handling opt outs difficult in general. The call center and dialer vendor are larger vendors who had negotiated out of compliance obligations related to issues over which they had no control, such as lead-related problems. The small lead vendor, however, had signed a contract assuming complete risk for everything related to the leads and agreed to indemnify the other parties regardless who was to blame. Unfortunately, the lead vendor cannot afford to pay the amount the consumer's lawyer is demanding. People are stressed, fingers are pointed and tempers flare. The relationships are jeopardized all around.
Vendors and clients both make mistakes - that's the reality of our industry. Consider the following telemarketing risk mitigation techniques to avoid conundrums like the one above, or to at least make them easier to resolve:
- Take time to craft a well-thought out contract for each individual relationship. A party should generally only be responsible (and provide indemnity) for issues over which they have primary control. For example, a lead generator is best situated to police its own data. The call center vendor is best situated to control what it's agents say on the phone and on how calls are dispositioned. The dialer vendor should be responsible for avoiding technical flaws its the system itself. Finally, the client needs to have a compliant product and needs to ensure internal DNC data is being honored. Learn more about Do Not Call law and other telemarketing rules.
- Little vendors are often attractive to big brands because of their pricing and the personal relationships. However, small vendors need to act like big vendors when it comes to contracts and compliance. Read what is put in front of you. Don't make assumptions. Negotiate for fair terms. Invest in compliance so you don't get your big client sued. Small vendors often think they are immune from litigation because they have few assets, are in another country, etc. However, getting your big client sued may end the relationship and send you searching for new work. Learn more about TCPA liability for outside vendor conduct.
- Big seller companies need to thoroughly vet the brands they work with, whether large or small. Do your due diligence and only work with brands committed to compliance and who take the contract and the relationship seriously. It isn't enough to have an indemnity clause and then let them go do whatever they want. They will get you sued if they are breaking the law. Win or lose, your legal fees may be very expensive. Small vendors who offer complete indemnity without blinking an eye are the ones you should look more closely at. They likely don't have the funds to pay your big indemnity bill if they get you sued. Learn how to respond to a TCPA lawsuit.
- Regardless of the relationship type (lead, tech, call center, fulfillment), it often makes sense for everyone to pitch in and purchase risk mitigation scrubbing, such as known litigator suppression. Many TCPA and similar claims are filed by serial litigators ("professional plaintiffs") who file frivolous claims in order to extort quick settlements. Serial plaintiffs know how to take advantage of your vendor relationships, which they know you want to keep in tact. They will often email your partners with threats, knowing those brands will pressure you to pay them off.
