Washington Report 052002

Date Published: 
Original Author: 
Robert M. Fells
Original Publication: 
ICCFA Magazine

ICFA Submits Comments on FTC Telemarketing Sales Rule 

by Robert M. Fells, Esq., general counsel 
In response to a public solicitation by the Federal Trade Commission for comments on its proposed amendments to the Telemarketing Sales Rule (TSR), the ICFA submitted remarks focusing on the "face-to-face" exemption from the TSR's requirements.
"The ICFA has supported the FTC Telemarketing Sales Rule since its promulgation in 1995 as an effective regulation that protects the public from abusive and fraudulent telemarketers without imposing unreasonable burdens on legitimate businesses. We believe that the existing rule achieves an appropriate balance between enabling consumers to avoid unwelcomed calls while safeguarding the constitutional rights of commercial free speech to businesses. ... Our comments are specifically addressed to Sec. 310.6(c) of the rule that exempts 'Telephone calls in which the sale of goods or services is not completed and payment or authorization of payment is not required, until after a face-to-face sales presentation by the seller.' The ICFA advocated this exemption during the original 1995 rulemaking proceeding and we believe that it has worked well."
Based on its January 30 Notice of Proposed Rulemaking, the FTC has recommended the retention of the face-to-face exemption in its TSR. However, the commission also proposed five amendments to this exemption that can be divided into three categories. The ICFA stated its concern within each category. The two proposals in the first category -- a company-specific "do not call" list and prohibiting calls between the hours of 9 p.m. and 8 a.m. -- prompt the ICFA to question why the commission wishes to needlessly impose existing federal law on businesses already required to comply with similar regulations under the Telephone Consumer Protection Act (TCPA) enforced by the Federal Communications Commission. While the commission seems to anticipate this concern in its notice, the issue remains unanswered and seems to be a case of excessive and duplicative regulation. The ICFA urges the commission to work closely with the FCC to assure full enforcement of the TCPA and to delete these two proposed amendments, at least as applied to the face-to-face exemption.
"The two proposals in the second category -- prohibiting intimidation, obscene language, and blocking caller ID -- appear reasonable on a practical level. Indeed, a caller hoping to make an appointment with a consumer at a mutually convenient time would not be motivated to use such tactics in the first place. However, the ICFA is concerned that certain terminology potentially determinative of whether a violation has occurred has not been defined in the proposed TSR. For example, the term, 'intimidation,' is not listed among the TSR's definitions. We are concerned that a consumer could potentially claim to have been 'intimidated' simply because a preneed caller suggested meeting to discuss funeral arrangements. So while these amendments are not unreasonable, the ICFA is not in a position to endorse them until the commission has clarified certain terms, at least by referencing them through existing definitions in specific statutes.
"The third category of proposed amendments to the exemption raises the most serious concerns by the ICFA -- a proposed national 'do not call' registry administered by the FTC. The proposed national registry as applied to the face-to-face exemption would, for all practical purposes, eliminate the distinction between defined 'telemarketing' under the TSR, where the purpose of the call is to sell something by phone, and the face-to-face exemption, whereby nothing is sold by phone. In addition, preneed callers must already maintain internal 'do not call' lists under the TCPA, and perhaps ultimately under the TSR as well. Since funeral homes and cemeteries function almost entirely on a local basis in their communities, a consumer potentially will be contacted only by a small number of these entities and can easily eliminate their calls by placing his or her number on the company-specific list. In other words, if consumers wish to eliminate preneed calls, resorting to a national registry will be unnecessary for them and burdensome for the businesses involved."
The ICFA also expressed its concern with "the lack of substantial evidence in the TSR rulemaking record to justify implementing the proposed amendments. ... As applied to the five proposed amendments to the TSR section 610.6(c) exemption, the ICFA is compelled to draw the commission's attention to the absence of substantial evidence in the rulemaking record demonstrating that preneed callers are engaging in unfair or deceptive acts or practices, or that such acts or practices are prevalent. As comments filed by interested parties are placed on the public record by the commission, the ICFA will continue to analyze the record for evidence that would justify imposing any of the five proposed amendments on preneed callers representing funeral homes and cemeteries."
The ICFA also filed its notification of interest to participate in the FTC public workshop conference, June 5-7, to discuss the proposed amendments.