32 JULY / AUGUST 2018 COMPLIANCE CONNECTION Brett J. Ashton Partner Krieg DeVault LLP Submit Compliance Connection questions to Eric J. Augustus, Indiana Bankers Association: eaugustus@indianabankers.org Krieg DeVault LLP is a Diamond Associate Member of the Indiana Bankers Association. This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. Indiana Do-Not- Call Law In relation to Regulation E Question: We recently had a presentation from a service provider on a new overdraft protection program that we are considering. We were told the program allows us to request the customer’s consent pursuant to Regulation E to opt in to receive the service, without violating the Indiana do-not-call law. Can we contact an existing customer and offer this service, or will doing so be a violation of Indiana law? Answer: Likely no, unless the customer has already provided written consent for you to call. The Indiana do-not-call law (the “Act”) prohibits a “telephone solicitor” from making a “telephone sales call” to a number appearing in the most recent quarterly do-not-call listing published by the consumer protection division of the office of the attorney general.1 The Act defines a telephone sales call to mean a call made to a consumer for, among other purposes, the solicitation of a sale of consumer goods or services.2 The Act defines the term “consumer goods or services” to include the extension of credit.3 While some may argue that, because Regulation E does not include lines of credit within the scope of the required opt-in disclosure, that overdraft protection programs presented in this manner are not an extension of credit. Nonetheless, in the unlikely event the attorney general’s office were to agree with this interpretation, the overdraft protection programs are still considered services that will be subject to the Act. The Act does provide an exemption for a telephone call made in response to an express request of the person called, or for a telephone call made primarily in connection with an existing debt or contract for which payment or performance has not been completed at the time of the call.4 The term “existing debt or contract” is defined to mean: 1. A sum of money currently owed by the consumer who receives the telephone call to the telephone solicitor making the call, or to the person who contracted, hired or authorized the telephone solicitor making the call; or 2. A legally binding agreement currently in effect between the consumer who receives the call and the telephone solicitor making the call, or the person who contracted, hired or authorized the telephone solicitor making the call.5 While the Act leaves room for interpretation that may cause some to think contacting an existing customer to solicit an additional service – such as the overdraft protection product – is permissible, it is important to note the exemption available for contact made with a consumer in connection with an existing debt or contract is limited to any contact made primarily for that purpose. Unfortunately, while products such as overdraft protection are clearly a benefit to depositors, unless any discussion of the ability to allow the customer to opt into this service is presented as no more than an ancillary issue when contacting a customer to discuss an unrelated account matter, it will likely be considered a violation of the Act. HB 1 Ind. Code § 24-4.7-4-1 2 Ind. Code § 24-4.7-2-9 3 Ind. Code § 24-4.7-2-3 4 Ind. Code § 24-4.7-1-1 5 11 IAC § 1-1-3.5
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