FEDERAL COMMUNICATIONS COMMISSION
The FCC has issued an order adopting rules to protect consumers from unwanted text messages received on cellular telephones. The FCC was authorized to adopt these rules pursuant to the “Can-Spam” Act. The “Can-Spam” Act added to the FCC’s previous jurisdiction over the practice established by the TCPA. The new regulation allows mobile service commercial messages only with express prior authorization or if forwarded for noncommercial purposes. Persons who send the messages must cease sending further messages within 10 days after receiving a request by a subscriber and include the functioning electronic mail address in their messages. If you would like to review the full regulation and comments, it is available on the Internet at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-194A1.pdf.
FEDERAL TRADE COMMISSION
The FTC announced that it is fining three list management companies more than $200,000 for renting lists to telemarketers knowing that the telemarketers were engaged in illegal practices. The FTC fined the companies under the “accomplice liability” standards found in the Telemarketing Sales Rule.
The FTC has charged a Nevada telemarketing group with placing more than 300,000 calls to consumers whose names were registered on the national “do-not-call” list. The FTC is seeking civil penalties against the telemarketer and its owners for violations of the registry. The telemarketing firm calls consumers on behalf of vacation time share companies. The FTC also alleges that the telemarketer placed calls without paying for the list, abandoned telephone calls and violated other provisions of the Telemarketing Sales Rule. The Commission is authorized to refer matters to the Department of Justice for suit when it has “reason to believe” that law has been violated.
The fee schedule for the national “do-not-call” registry is to take effect September 1, 2004. The revised fee structure requires entities to pay $40 per area code with a maximum fee of $11,000 for accessing 280 or more area codes. Entities will still be able to access the first five area codes at no cost, and exempt entities can access the entire registry free of charge.
Two companies have settled allegations from the FTC that they harassed customers during debt collection calls. The FTC alleged multiple phone calls and use of abusive language.
The FTC has also settled charges against an individual with regard to “pre-approved” credit card offers. The FTC charged that consumers who purchased the product never received a credit card but rather received various coupons and discount offers for cell phones. Other customers received a stored value card which required them to deposit money before using it. These types of offers are subject to heightened scrutiny at the state and federal level. You should ensure that all your credit card campaigns comply with applicable law.
Despite the implementation of “Can-Spam,” spam volume continues to grow. This exact problem was predicted as new laws on the books do little if not enforced. It is possible that enforcement of this law could result in less scrutiny for legitimate telemarketing.
WIRELESS TELEPHONE NUMBERS
In October most major cell phone carriers plan to start compiling a publicly accessible listing of wireless phone numbers. The California statute discussed below may be a reaction to this plan.
California’s Governor has signed a law which makes minor changes to the state’s telemarketing law. This bill made technical corrections, only, and does not affect the substance of California’s legislative scheme.
A bill has been proposed in California which would amend its public utilities statute to allow local telephone providers to publish a directory of their subscribers only with express consent from the subscriber. Further, other telephone corporations would be prohibited from selling or licensing lists of residential subscribers if their telephone number is unlisted or unpublished.
California is also considering a bill which would require contracts between businesses and telemarketing service providers to include a provision that telemarketing representatives must disclose their location upon request from California residents.
Effective October 1, 2004, Connecticut will require that consumer sales involving introductory periods or introductory rates be accompanied by a written disclosure that the consumer can cancel his or her purchase prior to the end of the introductory offer. You should ensure that your written materials comply with this restriction in this state prior to the effective date of the statute.
A state appeals court in Georgia has denied class action status to a recipient of a fax who was a customer of the telephone company sending the advertisement. The court ruled that she was not an adequate class representative as she could be subject to the defense that she was an established customer of the sender of the fax.
I recently had a discussion with an attorney from the Mississippi Public Service Commission who told me she was intending to file numerous actions against telemarketers for alleged violations of the Mississippi “do-not-call” list in the near future.
The Missouri Attorney General has sued nine vacation companies alleging fraud exceeding $200,000. Calls for timeshares and vacation packages are generally subject to more scrutiny than other types of telemarketing.
New York has raised penalties for its “do-not-call” list from $5,000 to $11,000 per violation. New York has been one of the more aggressive states with regard to enforcement of its list.
Texas has issued a RFP to businesses interested in administering its state utilities’ “do-not-call” list. Texas is the only state which has a list specifically applicable to solicitations for utilities, e.g. change of electric provider, etc.