28 NOVEMBER / DECEMBER 2019 COMPLIANCE CONNECTION Brett J. Ashton Partner Krieg DeVault LLP bashton@kdlegal.com Krieg DeVault LLP is a Diamond Associate Member of the Indiana Bankers Association. Indiana Do Not Call Law Impact of HEA 1123 on banks 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. Question: The Indiana Do Not Call Law has recently been amended. Does this mean that banks can contact current and former customers to solicit new business? Answer: Yes, but not without some risk. House Enrolled Act 1123, as enacted by the 2019 Indiana General Assembly, allows you to contact current and even former customers to solicit them for new business. Prior to doing so, however, you should carefully review the new law to evaluate any potential risk that may exist under the “deceptive acts” section of the code. Financial institutions have historically been subject to the provisions of Ind. Code § 24-4.7- Telephone Solicitation of Consumers (“Do Not Call Law”) while remaining exempt from a lesser-known telephone solicitation provision found at Ind. Code § 24-5-12 - Telephone Solicitations (“Telemarketing Law”). The Telemarketing Law is intended to regulate “sellers” engaged in consumer sales of a variety of consumer goods and services such as precious metals, vacation rentals or office equipment. While HEA 1123 amended the available exemptions from the Do Not Call Law that previously prohibited all financial services companies from contacting current or former customers to offer additional services, it also inadvertently removed the existing exemption for banks under the Telemarketing Law. Prior to the enactment of HEA 1123, the Telemarketing Law required the registration of any seller doing business in Indiana, if soliciting from a location in Indiana, or soliciting to a prospect located in Indiana.* Notably, the definition of what constituted a seller * See I.C. § 24-5-12-10 under this section of the code was very narrow and did not include any financial institutions or many other businesses. HEA 1123 removed this exemption language, subjecting not only financial institutions, but a wide variety of other businesses, to the various requirements under the Telemarketing Law, including an onerous registration process and exposure to liability for violations of the deceptive acts section of the code for violations. Recognizing this unintended consequence of these provisions of HEA 1123, the Indiana Office of the Attorney General issued a memorandum to clarify that entities exempt under the Do Not-Call Law are not subject to the registration requirements of the Telemarketing Act. While the OAG’s memorandum provides relief for financial institutions from the burdens of a cumbersome registration process, financial institutions should still consider the potential risk associated with allegations of deceptive acts for violations of the Telemarketing Law. While the OAG’s memorandum has removed the burden of registration under the Telemarketing Law, it does not speak to the application of the various deceptive act provisions of this section of the code to businesses that are no longer required to be registered. Until the Indiana General Assembly clarifies the extent of the exemption from this section of the code for financial institutions, those engaging in telephone solicitation activities remain at risk. HB
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