The FTC has a telemarketing sales rule which requires do not call telemarketer compliance
The Federal Trade Commission protects consumers not telemarketing companies
National Do Not Call Registry and List Compliance News

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State Do Not Call

August 2005 - Call Compliance News

The DMA has established the deceased “do-not-contact” list of persons who are deceased and should be removed from commercial marketing lists. All DMA members will be required to honor the DDNC. 

The FTC has taken the position that for-profit entities placing calls on behalf of exempt entities, such as charities, are subject to the Telemarketing Sales Rule including “do-not-call” list and abandonment provisions. For example, the FTC argues that a for-profit entity placing a sales call on behalf of a nonprofit (e.g. Girl Scout cookies) would be required to “scrub” against the national “do-not-call” list. It takes this position despite the fact that the nonprofit organization is exempt from the “do-not-call” list, and the FTC takes the contrary position that the seller, in this case the nonprofit, is required to purchase the list. Thus, the FTC argues that the nonprofit is both required to purchase the list and exempt from purchasing the list.

Effective August 1, 2005, companies that send “prescreened” solicitations of credit or insurance to consumers will be required to provide opt-out notices regarding the consumer’s right to opt-out of receiving future offers. The FTC has prescribed the format, type size and manner for these opt-out notices. Please contact me if you would like to discuss same.

The FTC has published its final rule raising the cost for the national “do-not-call” list to $56.00 per area code, with a maximum of $15,400 annually for any entity accessing 280 area codes or more. Entities will still be able to access the first 5 area codes at no cost. The list has increased in price every year of its existence, clearly placing the burden of the list on primarily compliant companies.

The FTC recently announced a $10.2 million judgment won against a debt collection company. The Court awarded judgment to the FTC and permanently barred the individual and corporate defendants from debt collection activities based on alleged violations of the FDCPA, including harassing and repeated telephone calls. 

The FTC currently has 22 federal cases filed under the Telemarketing Sales Rule. As you know, that rule contains many restrictions regarding deception and fraud in addition to more technical issues such as the “do-not-call” list and call abandonment.

The US Commerce Department report has shown what many in the telemarketing industry have known for years, that US multi-national companies are shifting work and employment abroad. In the period to 2000 to 2003, US employment by multi-national companies declined almost 10% while overall employment rose 2.4% during the same time period.

On Saturday, July 9, 2005, President Bush signed into law Senate Bill 714 which restores the established business relationship exemption for faxed communications. The fax must still contain an opt-out disclosure and prohibits companies from buying client lists of fax numbers. This may put an end to TCPA class actions which argued that the FCC was not entitled to allow the “established business relationship” exemption for unsolicited faxes. The FCC delayed implementation of its rule on the topic until January 9, 2006, which should give it plenty of time to publish a rule consistent with this new law.

California’s Attorney General has filed suit against a marketer of membership programs which purportedly provided discounts on car and home repair, shopping and other goods or services. The sale involved a negative option and a “free to pay” sales arrangement which offered consumers a free introductory period. Two other states, Connecticut and Maine, have also filed suit against the same defendants. The Telemarketing Sales Rule applies special disclosures to “free to pay” programs, and you should ensure your campaigns comply with this and other applicable rules.

Although a Florida telemarketing registration law requires disclosure of the social security number of officers and directors, the agency will waive that requirement based on federal privacy law which holds that a license cannot be conditioned on disclosure of a social security number. This likely would be the rule in other states that require this disclosure, as well.

Indiana has publicly asked several nonprofit organizations which have petitioned the FCC to preempt conflicting state law to withdraw their petition. This kind of governmental pressure against the exercise of free speech is disheartening, however, it is unlikely to have much effect as the FCC has already been petitioned by many entities. It should be noted that when this firm filed a First Amendment challenge to Indiana’s “do-not-call” list law, the Attorney General acted in the same fashion by putting pressure on the named plaintiffs to withdraw their support of the lawsuit without reference to the constitutionality of the statute. In one case, Indiana’s Attorney General held a television press conference in front of one of the businesses that challenged the constitutionality of the law.

New York has passed a law which eliminates an exemption from the state “do-not-call” law for calls to set up a later face-to-face meeting. The bill also clarifies that calls are allowed to established customers only if the customer has not made a company-specific “do-not-call” request. This change brings state law more in line with federal law on the topic.

The authors make every attempt to provide current, accurate information, but Telemarketing ConnectionS® is not intended to be a substitute for legal counsel, and readers should not use it in lieu of obtaining knowledgeable legal, or other professional, counsel expert in the field of commercial telemarketing law. References in Telemarketing ConnectionS® do not constitute endorsement by Copilevitz & Canter, L.L.C. or Telemarketing ConnectionS®. January 1, 2005, Copilevitz & Canter, L.L.C.
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