FTC Testifies on Telemarketing Legislation

In testimony today before the House Commerce Committee Telecommunications, Trade and Consumer Protection Subcommittee, the Federal Trade Commission said it favors legislative provisions that would allow consumers to place their names on mandatory "do-not-call" lists to avoid telemarketing sales calls. Testifying on two legislative proposals before the House, the "Telemarketing Victims Protection Act," and the "Know Your Caller Act," the FTC said, "The Commission . . . favors the underlying goal of the bills under consideration, which is to support consumer choice in the matter of whether to receive telemarketing calls."

Testifying on behalf of the Commission, Eileen Harrington, of the agency's Bureau of Consumer Protection told the panel that the FTC ". . . has filed hundreds of law enforcement actions against fraudulent and deceptive telemarketers in the past 15 years." She said the Commission is currently reviewing provisions of the Telemarketing Sales Rule (TSR), enacted by the Commission on August 16, 1995, to see whether the Rule ". . . could be strengthened to provide greater consumer protection, consistent with avoiding any undue compliance burden on legitimate telemarketers, as part of a broad regulatory review of the TSR."

One bill under consideration would require that telemarketers notify consumers they call that the consumer has the right to be placed on a "do-not-call" list. It also would require that when consumers request to be placed on such a list, the telemarketer must notify the Direct Marketing Association (DMA), which maintains such a list, or the appropriate state government of the consumer's request. "Some consumers object to receiving telemarketing calls because they view such calls as an intrusion on their privacy and a burden on their time," the testimony says. " . . . Do-not-call notification requirements likely would increase consumer awareness of the right not to be called, thereby assisting them in their exercise of this right." The testimony notes, however, that the "do-not-call" notification requirement could impose costs on individual telemarketers and on the DMA, the industry association that developed its own "do-not-call" list and makes adherence to it a condition of membership. Harrington said that ". . .during the Commission's recent workshop conference on TSR "do-not-call" issues, DMA representatives noted that the cost of maintaining the list was high and growing. Requiring that all telemarketers - even non-DMA members - specifically tell consumers about the DMA's "do-not-call" list may result in substantially increased consumer use of that service. Legislation should encourage self-regulatory initiatives like DMA's "do-not-call" list, but not impose additional burdens on them," the testimony says.

The testimony supported the goal of prohibiting telemarketers from blocking identifying information from "caller-ID" equipment. "When a telemarketer hangs up without identifying himself or herself, consumers have no way to exercise their right to request to be placed on a 'do-not-call' list unless the 'caller-ID' system shows a number where the telemarketer or seller can be reached. The Commission therefore favors the approach [that] . . . specifies that the phone number displayed be one that is useful to a consumer who wishes to call back and request that he or she be placed on the company's 'do-not-call' list."

The Commission vote to approve the testimony was 5-0, with Commissioner Orson Swindle issuing a separate statement. Commission Swindle concurred in the Commission's testimony, noting that the testimony "is likely to understate the actual extent of the irritation [from unwanted telemarketing calls] because it does not fully account for the effects of the apparently significant number of calls by entities over which the Commission's jurisdiction is entirely or partially limited, such as political fund raisers, charities, banks, telephone companies, etc." He explained that it is "important to underscore for the Congress that even bills that address unwanted calls by entities over which the Commission has jurisdiction would not remedy a significant amount of the irritation from unwanted telephone calls."

Copies of the Commission testimony are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; toll free at 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

Claudia Bourne

Farrell Office of Public Affairs

202-326-2181

Eileen Harrington or Allen W. Hile

Bureau of Consumer Protection

202-326-3127 or 202-326-3122

(FTC File No. P00 4101)