|June 28, 2002
Resort Development Association ("ARDA") was pleased to participate in the
Commission's forum regarding its proposed revisions to the TSR. ARDA
wants to thank the Commission staff for their hospitality and professionalism during the
forum. In briefly summarizing its position on various aspects of the proposed Rule,
ARDA incorporates by reference both sets of written comments previously submitted and its
comments provided during the forum.
legitimate concerns regarding both the statutory authority of the Commission to establish
a national Do-Not-Call registry and potential constitutional issues with the Rule, should
it be promulgated as originally proposed. These concerns aside, ARDA continues to
believe a reasonable, well-defined structure for creating and maintaining a preemptive
registry would be beneficial both to the telemarketing industry and to consumers.
Further, several of the Commission's other proposed changes have merit and, with some
modification, could achieve the balance that we are all seeking, while avoiding legal
objections that could imperil the rule.
In keeping with
our promise to be brief, ARDA supports the following:
Do-Not-Call registry that preempts all state lists. It is imperative, under the
Privacy Act, that Congress (or the Commission) preempts state laws in this area in order
for the Commission to responsibly maintain the integrity of consumers' personal
information and to lessen arbitrary application. Further, the additional cost of
another list, on top of the multitude of state lists, would be unbearable. There
would be a disproportionate impact on smaller businesses. The Commission is
obligated to consider the potential impact on small business and its obligations to
maintain fairness in regulatory enforcement on small businesses. Finally, the
Commission must defer to Congress on the ability to charge user fees for the proposed
national registry as it would in the case of FOIA and similar charges. (This latter
issue is addressed further in ARDA's response to the Commissions' NPRM dated May 24, 2002,
which is filed separately.)
for preexisting relationships is essential to a balanced and constitutional national
registry. As noted in the forum, to remove this exception, which the industry has
been working with under both the FCC and state requirements, would result in a drastic
change in operations and increase costs substantially. The extension of this
reasoning to prior business relationships (with a reasonable cut-off period) and affinity
relationships, for which the consumer has a legitimate expectation of contact, is both
logical and economically necessary. Absent these exceptions, the Rule will have the
unintended result of not permitting consumers to receive calls from those businesses it
may desire to hear from, particularly in circumstances where such a desire could be
inferred from their relationship. Such a restriction, without substantial basis in
fact for its exclusion, would necessarily result in arbitrary application. As was
duly noted in the forum, it would be imperative, particularly under section 553, that the
Commission allow comment on any definition of "established business
relationship" it produces as interested parties would have not had the prior
opportunity to comment on the precise language of that definition.
parties, other than a spouse or legal guardian, should not be permitted to register
consumers on the registry. This will only lead to the types of fraud that the
Commission is seeking to prevent by revising the TSR. Further, to permit third
parties to register consumers would require the Commission to adopt a new regulatory
structure and increase the costs of the proposed registry even more than previously
should not be explicitly required to purchase the list or be presumed in violation of the
Rule for not purchasing the list. If a third party telemarketing firm purchases one
list that could be used by several of its seller customers, then that one list (with any
area code extensions particular to a given seller) should be sufficient to address the
concerns of the Commission.
abandonment rate for predictive dialers is not feasible from both a cost and operations
standpoint. As noted in the forum, a predictive dialer with a zero error rate is no
longer "predictive" and dissipates any advantage to using the technology.
Further, a zero error rate ignores the fact that unintentional errors may occur. A
rate between three and five percent is reasonable.
"upsell" should not be treated as an "outbound call." As it was
pointed out during the forum, such classification would require new training of
telemarketers. Further, inbound and outbound telemarketers are often set up in
different facilities because of the diversity in their operations and to increase
economies of scale for similar procedures. Businesses would likely have to close
facilities, thereby costing local communities in terms of jobs and tax revenue. The
proposal would require changes in operations at significant costs to business. A
separate definition and treatment of "upsells" would be appropriate.
should allow flexibility in the obtaining of express verifiable authorizations for
charges. Given the rapid changes in technology and marketing media (particularly the
Internet), sellers should be permitted to obtain authorization by tape verification, in
writing, or any other viable and secure method (such as electronic signatures, as noted in
ARDA's written comments).
The fine for
one violation of the do-not-call provision goes far beyond a reasonable deterrent.
This is a point ARDA believes did not come out in the forum. The fine was originally
imposed to deal with unfair and deceptive practices under section 5 of the FTC Act.
An $11,000 fine for one call made to a number on the registry is excessive. If there
is an intentional pattern of calling in disregard of the registry, then punitive fines
such as this are more likely justifiable.
Finally, ARDA believes the forum, while extremely beneficial, posed as many
questions as it resolved. The current state of the law is sufficiently
confusing. For example, media reports surrounding the proposed Rule and the forum
touted that anywhere from 15 to 25 states currently have do-not-call laws. This
confusion stresses the importance not only of a national, preemptive registry with
reasonable exceptions, but the necessity for additional review of the Rule.
As a result of the comments submitted, the Commission hopefully will make
significant changes to its original proposal. Therefore, as a matter of both good
practice and possible legal compliance, the Commission should allow an additional comment
period for any final rule it intends to promulgate. ARDA would enthusiastically
participate in any additional comment period.
Once again, thank you for the opportunity to express the position of more
than 800 members of the vacation timeshare industry. We hope that our comments have
Sandra Yartin DePoy
Director of Federal Relations
J. Stratis Pridgeon, Esq.
Chairman, Joint Subcommittee on
Transmitted via email by
David J. Evans, ARP
Senior Legislative Counsel