``Do-Not Call ``Provisions of Telemarketing Sales Rule; Meeting

FEDERAL TRADE COMMISSION

16 CFR Part 310

``Do-Not Call ``Provisions of Telemarketing Sales Rule; Meeting

AGENCY: Federal Trade Commission.

ACTION: Announcement of public forum on the ``Do-Not-Call'' provision

of the telemarketing sales rule.

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SUMMARY: The Federal Trade Commission plans to hold a public

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forum on January 11, 2000, to discuss issues relating to the ``do-not-

call'' provision of the Telemarketing Sales Rule, 16 CFR Part 310.

DATES: The public forum will be held on January 11, 2000, in

Washington, DC, from 8:30 a.m. until 5:30 p.m. Notification of interest

in participating in the forum must be submitted on or before December

10, 1999.

ADDRESSES: Notification of interest in participating in the public

forum should be submitted in writing to Carole I. Danielson, Division

of Marketing Practices, Federal Trade Commission, 600 Pennsylvania

Avenue, NW, Room 238, Washington, DC 20580. The public forum will be

held at the Federal Trade Commission, 600 Pennsylvania Avenue, NW, Room

432, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Catherine C. Harrington-McBride (202)

326-2452 (email [email protected]), Karen Leonard (202) 326-3597, (email

[email protected]), or Carole I. Danielson (202) 326-3115 (email

[email protected]), Division of Marketing Practices, Bureau of

Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue,

NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Section A. Background

On August 16, 1994, President Clinton signed into law the

Telemarketing and Consumer Fraud and Abuse Prevention Act

(``Telemarketing Act'' or ``the Act''),1 which directed the

Commission to prescribe rules prohibiting deceptive and abusive

telemarketing acts or practices. In response to this Congressional

directive, the Commission promulgated its Telemarketing Sales Rule

(``the Rule''), 16 CFR Part 310, which became effective on December 31,

1995.2

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\1\ 15 U.S.C. 6101 et seq.

\2\ 60 FR 43842 (August 23, 1995).

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The Telemarketing Act directed the Commission to include in its

rules ``a requirement that telemarketers may not undertake a pattern of

unsolicited telephone calls which the reasonable consumer would

consider coercive or abusive of such consumer's right to privacy.''

3 Section 310.4(b) of the Rule sets forth two prohibitions

on sellers and telemarketers which were intended to effectuate this

requirement of the Act. First, Sec. 310.4(b)(1)(i) prohibits causing

any telephone to ring, or engaging any person in telephone

conversation, repeatedly or continuously with the intent to annoy,

abuse, or harass any person at the called number.4 The

second provision in the Rule intended to limit unsolicited telephone

calls is the ``do-not-call'' requirement set forth in

Sec. 310.4(b)(1)(ii). This section prohibits any telemarketer from

initiating, or any seller from causing a telemarketer to initiate, an

outbound telephone call to a person when that person previously has

stated that he or she does not wish to receive such a call made by or

on behalf of the seller whose goods or services are being offered. This

provision is modeled on a similar provision included in the FCC's

regulations,5 adopted pursuant to the Telephone Consumer

Protection Act (``TCPA'').6

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\3\ 15 U.S.C. 6102(a)(3)(A).

\4\ This provision is modeled on a similar provision in the

Fair Debt Collection Practices Act (``FDCPA''). 15 U.S.C.

1692(d)(5). The legislative history of the Telemarketing Act

indicated Congress' intent that the Commission consider the FDCPA in

establishing prohibited abusive telemarketing acts or practices.

See, e.g., H.R. Rep. No. 20, 103rd Cong., 1st Sess. at 8.

\5\ 47 CFR 64.1200(a)-(f), 64.1200(e).

\6\ 47 U.S.C. 227.

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Although both the FTC and the FCC have similar regulations

prohibiting sellers or telemarketers from calling persons who have

stated that they do not wish to be called, there are differences in the

enforcement of the TCPA and the Telemarketing Sales Rule. The Rule may

be enforced by the Commission or the States.7 In addition to

injunctions, each violation can result in a court's assessment of civil

penalties up to $11,000 per violation, or an order to pay redress or

disgorgement under Section 13(b) of the FTC Act, 15 U.S.C. 53(b). By

contrast, the TCPA ``do-not-call'' provisions primarily have been

enforced by consumers. The TCPA provides a private right of action for

a consumer who receives more than one telephone call within any 12-

month period by or on behalf of the same entity in violation of the

FCC's regulation.8 Such a plaintiff can recover the greater

of $500 or actual damages.

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\7\ See 15 U.S.C. 6102(c), 6103. In addition, a person who

suffers more than $50,000 in actual damages has a private right of

action under the Rule. See 15 U.S.C. 6104.

\8\ See 47 U.S.C. 227(c)(5).

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Because of the differences in the agencies' ``do-not-call''

provisions, the Commission declined to make a blanket pronouncement

that compliance with the TCPA's ``do-not-call'' procedures would

constitute compliance with the Telemarketing Sales Rule.9

Nonetheless, the Commission has clarified that sellers and

telemarketers need compile only one list of consumers who wish not to

be called in order to comply with the recordkeeping provisions of both

the TCPA and the Rule.10

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\9\ 60 FR at 43855.

\10\ Id.

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While much of the TSR takes aim against fraudulent telemarketing,

an equally important goal of the TSR is to protect consumers' right to

privacy. In the five years since the Rule became effective, consumers

increasingly have become interested in choosing what information is

available about them and with whom and under what circumstances that

information may be shared. In response to these concerns, local

telephone companies and others have begun to market products that allow

consumers to screen out calls from telemarketers, for example, by

playing a message stating that no telemarketing calls are accepted or

by blocking all calls except those from specific numbers selected by

the consumer. Many states have responded to consumer concerns by

enacting ``no call'' legislation,11 under which consumers

may have their names placed on a list maintained by a centralized list-

holder of persons who do not wish to receive telemarketing

calls.12 Sellers or telemarketers who call any of the

persons on that list would be in violation of state law. Increased

consumer awareness of the right to be placed on a ``do-not-call'' list

also has resulted in the Commission receiving numerous consumer

inquiries on how to stop receiving telemarketing calls and how to

assert the right to sue an offending seller or telemarketer under the

TCPA.13

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\11\ See, e.g.!, Alabama, 1999 Ala. Acts 589; Alaska, 1996

Alaska Sess. Laws 142; Arkansas, 1999 Ark. Acts 1465; Florida, Fla.

Stat. Sec. 501.059; Georgia, Ga. Comp. R. & Regs. r. 515-14-1;

Kentucky, 1999 Ky. Rev. Stat. Ann. Sec. 367.46951 (Michie 1999);

Oregon, 1999 Ore. Laws 564; Tennessee,1999 Tenn. Pub. Acts 478.

\12\ The idea of a central ``no-call'' list is not new. For many

years, Direct Marketing Association (``DMA'') has maintained a no-

call database called the ``Telephone Preference Service.'' Consumers

may place their names and numbers on a list, which is provided to

all DMA members. To remain in good standing with the DMA, its

members agree to check the list regularly and remove from their call

lists any person who has requested not to be called.

\13\ FTC staff refers consumers to the FCC for assistance on how

to assert their rights under the TCPA.

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During the year 2000, the Commission will be conducting a review of

its Telemarketing Sales Rule.14 Simultaneously with this

rule review, the Commission intends to conduct a broader study of

telemarketing. The planned result is a separate report on the

technological, social, business, and

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other forces that have shaped the practice of telemarketing over the

past two decades. The report will also look forward, assessing emerging

trends for the future. The Commission will publish a separate Federal

Register notice shortly to solicit comments and opinions in connection

with both the rule review and the broader report on the telemarketing

industry. In addition to requesting written comments and academic

studies, the Commission plans to hold a series of public forums to

afford staff and interested parties an opportunity to explore relevant

issues.

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\14\ The Telemarketing Act directs the Commission to conduct a

review of the Rule and its impact on fraudulent telemarketing after

5 years following its promulgation, and to report the results to

Congress. 15 U.S.C. 6108.

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The first forum in this series will address the ``do-not-call''

issue. By devoting an entire forum to this single topic, the Commission

staff expects that interested parties will have sufficient time to

explore the many facets of this important topic. This forum will be

held in advance of the deadline for submitting written comments in the

overall rule review so that participants will be able to use the ``do-

not-call'' discussion to advance alternative approaches, to gain deeper

insight into the forces motivating the various interested parties, and

to make their subsequent written comments more focused than they might

otherwise be.

After analyzing the complete record of the rule review, which will

include the information provided at all the forums as well as all

written comments and academic studies, the Commission will determine

whether to propose amendments to the ``do-not-call'' provision or any

of the other Rule provisions. The Commission will also use the

information gathered during the review process in its report on

telemarketing.

Section B. Public Forum

The FTC staff will conduct a public forum to discuss the issues

raised by the ``do-not-call'' requirement set forth in

Sec. 310.4(b)(1)(ii) of the Telemarketing Sales Rule. The purpose of

the forum is to facilitate a discussion among members of industry,

consumer groups, state regulators, and law enforcement agencies about

issues raised by this provision, and possible solutions to any concerns

raised in the forum.

Section C. Request To Participate

The FTC invites members of the public, industry, and other

interested parties to participate in the forum. To be eligible to

participate, you must file a request to participate by December 10,

1999. If the number of parties who request to participate in the forum

is so large that including all requesters would inhibit effective

discussion among participants, FTC staff will select as participants a

limited number of parties to represent the relevant interests.

Selection will be based on the following criteria:

1. The party submitted a request to participate by December 10,

1999.

2. The party's participation would promote the representation of a

balance of interests at the forum.

3. The party's participation would promote the consideration and

discussion of the issues to be presented in the forum.

4. The party has expertise in issues to be raised in the forum.

5. The party adequately reflects the views of the affected

interest(s) which it purports to represent.

If it is necessary to limit the number of participants, those who

requested to participate but were not selected will be afforded an

opportunity, if at all possible, to present statements during a limited

time period at the end of the session. The time allotted for these

statements will be based on the amount of time necessary for discussion

of the issues by the selected parties, and on the number of persons who

wish to make statements.

Requesters will be notified as soon as possible after December 10,

1999, whether they have been selected to participate.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 99-30700 Filed 11-23-99; 8:45 am]

BILLING CODE 6750-01-P