FCC Will Use FTC Telemarketing 'Do Not Call' Registry for Intrastate Calls
by Robert M. Fells, Esq., general counsel
As previously reported, the Federal Communications Commission (FCC) has been considering whether to establish its own national Do Not Call registry to allow residential telephone subscribers to opt out of receiving intrastate telemarketing calls.
In March, Congress approved the Do-Not-Call Implementation Act authorizing funding for the Federal Trade Commission (FTC) to establish its own Do Not Call registry, which would apply only to interstate calls. However, Congress also directed the FCC to work with the FTC to apply the Do Not Call list to intrastate calls as well. Effective October 1, telemarketers must delete from their calling lists any phone number registered through the FTC/FCC Do Not Call list or risk fines up to $11,000 per violation.
ICFA members who engage in any type of telemarketing, even if limited to setting appointments for a face-to-face meeting, should carefully review the new rules by both the FTC and the FCC to determine if they are affected.
While the regulations from both agencies are similar, they are not identical and contain some important differences. The FTC enforces the Telemarketing Sales Rule (TSR), originally enacted in 1995, that requires certain disclosures to be made by telemarketers including prices, cancellation and refund policies for interstate calls, that is, calls from one state to another. The ICFA successfully obtained an exemption to the TSR for appointment-type calls that seek only a meeting with the consumer.
The FCC enforces the Telephone Consumer Protection Act of 1991 (TCPA), which requires, among other things, that telemarketers maintain an in-house, company-specific Do Not Call list for consumers who ask not to be called again. The TCPA contains no appointment call exemption to this requirement and applies both to interstate and intrastate phone calls.
Both FTC and FCC laws also regulate the use of autodialers, caller ID, call abandonment, unsolicited faxes, calling time restrictions and related issues.
The new national Do Not Call registry contains no appointment call exemption but does create a number of other exemptions:
• the consumer has given prior express permission to be called;
• there is an "established business relationship" between the seller and the consumer; • there is a personal relationship between the caller and the consumer (e.g., the caller is a relative or friend); or
• the caller is a tax-exempt, nonprofit organization. If a nonprofit company hires a third-party telemarketing firm to place the calls, the nonprofit exemption will apply to the telemarketing firm under both the FTC and FCC regulations, although the FTC requires the third-party firm to honor consumer requests to be placed on the company-specific Do Not Call list for interstate calls.
The FCC states that "prior express permission" must be based on a signed agreement, including the phone number to be called, between the consumer and the seller stating that the consumer agrees to be contacted by that particular seller. Permission can be revoked when the consumer asks to be placed on the company-specific Do Not Call list.
The FCC defines an "established business relationship" as "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without consideration, on the basis of the subscriber's purchase or transaction with the entity within the eighteen (18) months immediately preceding the date of the phone call or on the basis of the subscriber's inquiry or application regarding products or services offered by the entity within the three (3) months immediately preceding the date of the call."
Access to the national database will be available to telemarketers by September on an area code basis. There is no fee for businesses purchasing up to five area codes in the database (33 states currently have five or fewer area codes) and the FTC has proposed that sellers be charged $29 annually per area code beyond the first five with a maximum annual fee of $7,250 for access to the entire national database.
Telemarketers will be required to update their lists every three months, and the area codes provided to an entity cannot be shared with others. For example, a telemarketing firm must pay a fee for each entity on whose behalf it is making calls even if the same area code databases are used for each of its clients.
According to FTC and FCC staff, sellers who place calls solely intrastate are not covered by the FTC Telemarketing Sales Rule and would be required to comply only with the FCC regulations, assuming that none of the exemptions apply.
For more information, check the FTC Web page at www.ftc.gov
and the FCC Web page at www.fcc.gov
. ICFA members with specific questions can also contact me for assistance.