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.
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:
Opportunity for Public Comment
Six paper copies of each written comment regarding the proposed amendments should be sent by March 29, 2002 to: FTC, Office of the Secretary, Room 159, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. All comments should also be submitted, if possible, electronically on computer disk, with a label stating the name of the commenter and the name and version of the word processing program used to create the document. In addition, the Commission will accept comments that are submitted to the following e-mail address: firstname.lastname@example.org, if the information is organized in sequentially numbered paragraphs. All written comments and electronic submissions should be identified as "Telemarketing Rulemaking - Comment. FTC File No. R411001." Individual members of the public filing comments need not submit multiple copies or comments in electronic form.
The public forum announced in the Federal Register notice will be held at FTC Headquarters after the close of the public comment period. Parties interested in attending the forum should submit their request in writing to: Carole Danielson, FTC Bureau of Consumer Protection, Division of Marketing Practices, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580.
For More Information
For additional information on the TSR, the notice of proposed rulemaking, or the upcoming public forum, contact: Catherine Harrington-McBride, 202-326-2452 (e-mail: email@example.com); Karen Leonard, 202-326-3597 (e-mail: firstname.lastname@example.org); or Carole Danielson, 202-326-3115 (e-mail: email@example.com).
The Commission vote to approve publication of the Federal Register notice was 5-0.
Commissioner Orson Swindle issued a concurring statement in which he stated his wholehearted support for the changes to the TSR, noting that the new proposals appear to strike a balance between protecting consumers without unduly restricting legitimate telemarketing practices. The Commissioner's statement emphasized two points regarding the Telemarketing Act and the TSR. First, he pointed out that the Commission's regulatory scheme would be more effective and more equitable if it covered the "entire spectrum of entities engaged in telemarketing," emphasizing that "the Commission lacks jurisdiction, in whole or in part, over the calls of entities such as banks, telephone companies, airlines, insurance companies, credit unions, charities, political campaigns, and political fund raisers."
Second, Commissioner Swindle raised concerns regarding the Commission's method of determining whether certain practices are "abusive" under the Telemarketing Act. For some practices, the Commission proposes to determine that they are abusive for the purposes of the Telemarketing Act because they are "unfair" for purposes of Section 5 of the FTC Act. Commissioner Swindle has "reservations about using unfairness principles under Section 5 to determine what is abusive under the Telemarketing Act." Commissioner Swindle's statement requests public comment regarding this issue as well as comments regarding "whether the transfer of pre-acquired account information meets the standards for unfairness under Section 5 of the FTC Act."
Copies of the Federal Register notice mentioned in this release 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. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. R411001)