Keller Williams lawsuit: Is this the end of cold calling?

US real estate firm Keller Williams has agreed to pay US$40 million as part of a settlement agreement after it faced a class action lawsuit alleging it had violated the Telephone Consumer Protection Act, raising questions about the viability of cold calling.

The lawsuit alleged agents from Keller Williams had made unsolicited, pre-recorded calls to consumers – including those on a do not call database – without their consent, according to RealTrends.

About two million people may be eligible to receive payments of up to US$20 each as part of the settlement.

In addition to the financial settlement, Keller Williams has reportedly agreed to undertake further measures to improve compliance with the National Do Not Call Registry.

Real estate coach Claudio Encina said cases like these raised questions about the viability of cold calling in the Australian market, where the Australian Communications and Media Authority operates a similar Do Not Call scheme.

The register prohibits businesses from making unsolicited voice calls that have commercial-type purpose to numbers that are registered on the database.

Agents can check their compliance with the Do Not Call Register by visiting the ACMA website.

In particular, agents in the early stages of their career who relied on cold calling as a way to build their client database would need to look to diversify their methods.

“Cold calling for a lot of people is for the newer agents, someone who is starting out and trying to build a database,” Mr Encina said.

He said many agents had already turned to door knocking in their local neighbourhood because the Do Not Call Register limited the number of people they could reach by telephone.

Door knocking had several other advantages over cold calling too, he said.

“A lot of them have started to do door knocking because they’re just finding that there’s a lot of people who are on that Do Not Call Register,” he said.

“And they find that being more personal, meeting face-to-face, making an introduction like ‘Hi, I’m the local agent from Smithfield’, for example, and being more personal that way… They have a lot more success and a lot more of a connection, rather than a cold call where someone is just able to hang up.”

Along with door knocking, turning to social media could also be a better alternative for agents trying to increase their profile.

“If I was an agent today, would I be cold calling?” Mr Encina said.

“I think there’s probably much better strategies to try to help and find people who are looking at selling in the marketplace.

“We’ve seen a lot more, especially in the last 12 to 18 months, agents using social media as a way to try to build a brand, build a profile and trying to create awareness of who you are and what you do and what your offer is.

“That’s definitely one method.”

Mr Encina said agents should also be aware that financial penalties existed for repeat breaches of the Do Not Call Register.

Real estate coach Caroline Bolderston said that the requirement for early-career agents to revert to cold calling could be negated if agencies were more willing to share their existing database.

“A lot of new agents don’t get to tap into the database because of a sense of proprietorship from their colleagues over certain contacts,” she said.

She said that the Keller Williams case also served as a reminder that agents were not always across the latest legislative changes, and that more education was needed in the industry.

She said that cold calling still serves a purpose though, so long as agents approach the conversation as something that brings value to their contact.

This could include reaching out to owners in the immediate vicinity of a listed property to invite them to the open home, she said.

“I think in general cold calling without a relevant purpose that actually might be meaningful to a person is where the problem is,” Ms Bolderston said.

“(For example) calling people and looking for business, rather than cold calling them with something which actually might be of genuine interest to them and might benefit them from the call.”

She said that determining when cold calling was appropriate was “a bit of a fine line.”

On the one hand, cold calling could serve a genuine purpose as a way to communicate changes in the market.

“Not everybody looks online and follows what happening but a lot of people are very interested in what’s happening in their local area,” Ms Bolderston said.

But agents also needed to make an honest assessment of who their call was serving.

“The cold calling with the intention with trying to get something out of it for the agent is not acceptable.

“They (clients) don’t want that, it’s not meaningful enough, they can see through it.”

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Jack Needham

Jack Needham was a Digital Editor at Elite Agent in 2022 & 2023

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