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FTC Proposes National "Do Not Call" Registry

January 22, 2002

Commission Seeks Comment on Registry and Other Proposed Changes to the Telemarketing Sales Rule

The Federal Trade Commission today announced a proposal to create a centralized national "Do Not Call" registry. The registry would enable consumers to eliminate most telemarketing calls simply by making one call to the FTC. The proposal is a key component of the privacy initiative that FTC Chairman Timothy J. Muris announced in early October. The proposed national "Do Not Call" registry is one element of the Commission's proposal to modify the Telemarketing Sales Rule (TSR), which protects consumers from unwanted and late-night telemarketing calls and prohibits deceptive sales calls. The proposed amendments to the TSR are designed to enhance the Rule's ability to prevent deceptive telemarketing practices and to enable consumers to exert greater control over when and whether to receive telemarketing calls in their homes.

"Under the FTC's proposal, it would be illegal for telemarketers to call consumers who place their phone number on the national registry," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "Today's action is the first step. But, consumers need to understand that this is a proposal. If adopted, it will be a while before the national 'Do Not Call' registry can become a reality." A notice of proposed rulemaking to be published shortly in the Federal Register will seek public comment on this change and a range of other proposed amendments to the TSR.

The Commission is also proposing changes to the TSR mandated by the recently enacted USA PATRIOT Act. Prompted by the events of September 11, this legislation, among other things, directs the Commission to expand the TSR to cover calls made to solicit charitable contributions. (Currently the TSR covers only calls made to sell goods and services.) By law, non-profit charitable organizations are exempt from the FTC's jurisdiction, and the USA

PATRIOT Act does not change that. However, the USA PATRIOT Act does enable the FTC to act against for-profit companies that engage in fraudulent, deceptive, or abusive practices when they solicit charitable contributions on behalf of charities or purported charities.

The TSR (16 CFR Part 310) prohibits specific deceptive and abusive telemarketing acts or practices; requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; limits the hours that telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services. The Act that authorizes the FTC Rule also authorizes both the FTC and state attorneys general to enforce the TSR in federal court. The Rule, which marked its fifth anniversary this past March, has resulted in judgments amounting to more than $152 million in consumer redress and $500,000 in civil penalties.

The Commission also announced it will hold a public forum on June 5-7, 2002 to allow FTC staff and interested parties to explore and discuss issues raised during the comment period for the amended TSR.

Proposed Amendments

The highlights of the FTC's proposed amendments are provided below. A detailed summary of these proposals can be found in the notice of proposed rulemaking, which will be published in the Federal Register and is available at www.ftc.gov.

Through the proposed rulemaking, the Commission is seeking to:

    Supplement the current company-specific "Do Not Call" provision with an additional provision that will enable a consumer to stop calls from all companies within the FTC's jurisdiction by registering with a central "do-not-call" list maintained by the FTC; Permit a consumer who registers with the central "Do Not Call" list to receive telemarketing sales calls from an individual company or charitable organization to which the consumer has provided his or her express verifiable authorization to make telemarketing calls to the consumer; Modify § 310.3(a)(3) to require express verifiable authorization for all transactions in which the payment method lacks dispute resolution protection or protection against unauthorized charges similar or comparable to those available under the Fair Credit Billing Act and the Truth in Lending Act; Delete § 310.3(a)(3)(iii), the provision allowing a telemarketer to obtain express verifiable authorization by confirming the transaction in writing prior to submitting the customer's billing information for payment; Require, in the sale of credit card protection, the disclosure of the legal limits on a cardholder's liability for unauthorized charges; Prohibit misrepresenting that a consumer needs offered goods or services in order to receive protections he or she already has under 15 U.S.C. § 1643 (limiting a cardholder's liability for unauthorized charges on a credit card account); Mandate, explicitly, that all required disclosures in § 310.3(a)(1) and § 310.4(d) be made truthfully; Expand upon the current prize promotion disclosures to include a statement that any purchase or payment will not increase a consumer's chances of winning; Prohibit the practices of receiving any consumer's billing information from any third party for use in telemarketing, or disclosing any consumer's billing information to any third party for use in telemarketing; Prohibit additional practices: blocking or otherwise subverting the transmission of the name and/or telephone number of the calling party for caller identification service purposes; and denying or interfering in any way with a consumer's right to be placed on a "Do Not Call" list; Clarify that the use of predictive dialers resulting in "dead air" violates the Rule; Narrow certain of the Rule's exemptions; Clarify that facsimile transmissions, electronic mail, and other similar methods of delivery are direct mail for purposes of the direct mail exemption; and Make all changes necessary to implement the USA PATRIOT Act amendments to the Telemarketing Act, specifically, expanding the TSR to cover the solicitation of charitable contributions by for-profit telemarketers.

Source: Federal Trade Commission



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