Acts
of Congress
The Telephone Consumer Protection Act of 1991 (TCPA)
The Telephone Consumer Protection Act of 1991 ("TCPA") amended the Communications Act of 1934. In addition to many other provisions, the TCPA restricts telemarketers from calling residential numbers unless "the telemarketer has instituted written policies and procedures for maintaining a do-not-call list for subscribers who request not to receive further solicitations."
The TCPA regulates not only standard dialing of telephones, but also the use of automated dialing equipment and fax broadcast devices. Generally speaking, the TCPA prohibits the sending of any unsolicited fax advertisement. The use of auto dialers and the sending of "artificial" or recorded messages are limited as well. Congress mandated that the Federal Communications Commission (FCC) develop regulations implementing the TCPA.
The Telemarketing and Consumer Fraud Act and Abuse Protection Act of 1994
The Telemarketing and Consumer Fraud and Abuse Protection Act of 1994 required the FTC to develop regulations to prevent fraudulent and abusive practices by telemarketers. The Act further requires the FTC to develop rules against practices by telemarketers that a reasonable consumer would consider coercive or abusive of such consumer's right to privacy, restrictions on the hours of the day and night when unsolicited telephone calls can be made to consumers, as well as disclosure requirements. The Act calls for a fine of $11,000 for a violation of any of the provisions developed by the FTC. In passing this legislation, Congress mandated that enforcement should fall to the Federal Trade Commission (FTC). In turn, the FTC issued the Telemarketing Sales Rule (see below), which became effective on December 31, 1995.
The Federal Agencies and the Statutes
The Federal Communications Commission (FCC)
The Federal Communications Commission (FCC) oversees radio, television, cable, satellite, and wire communications, both domestically across state lines and internationally. As originally promulgated (in 1992), the regulations the FCC created implementing the TCPA covered "in-house" lists (prohibiting telemarketers from calling residential numbers unless "the telemarketer has instituted written policies and procedures for maintaining a do-not-call list for subscribers who request not to receive further solicitations"), autodial calls (regulating the sending of pre-recorded messages), and fax broadcast rules (prohibiting sending faxes unless there was consent, or if there was an existing business relationship.)
Following the promulgation by the FTC of its amended rules in December of 2002 (see below), the FCC began a rulemaking proceeding to make extensive changes to its TCPA regulations. The result was a set of new regulations, issued on July 3, 2003. These new rules brought the FCC's rules more in line with the FTC's rules governing a "national" Do Not Call ("DNC") list, use of predictive dialers, and transmission of Caller ID by telemarketers. The rules also strengthened and clarified the prohibitions governing autodial calls and fax broadcasts.
One of the most important clarifications made by the FCC pursuant to its 2003 rulemaking was that a predictive dialer falls within the FCC's definition of an "automatic telephone dialing system." With this clarification, the FCC prohibited any call (absent calls with express permission) made by a predictive dialer to a wireless telephone number. (For a PowerPoint presentation reviewing the changes enacted by the FCC, please refer to Amendments to the FCC's Telemarketing Rules.)
The Federal Trade Commission (FTC) and the Telemarketing Sales Rule (TSR)
The Federal Trade Commission (FTC) enforces a variety of federal anti-trust and consumer protection laws. The Commission seeks to ensure that the nation's markets function competitively, and are vigorous, efficient, and free of undue restrictions. The Commission also works to enhance the smooth operation of the marketplace by eliminating acts or practices that are unfair or deceptive. In general, the Commission's efforts are directed toward stopping actions that threaten consumers' opportunities to exercise informed choice. Finally, the Commission undertakes economic analysis to support its law enforcement efforts and to contribute to the policy deliberations of the Congress, the Executive Branch, other independent agencies, and state and local governments when requested.
The FTC's Telemarketing Sales Rule (TSR) implements the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994. The TSR was substantially amended in late 2002 (for a PowerPoint presentation reviewing the provisions of the "new" TSR as it differs from the old one, please click here: Amendments to the FTC's Telemarketing Sales Rule.) The new TSR (among other things) creates a Do Not Call program administered and enforced by the FTC; mandates a 3% abandonment rate for predictive dialers; and mandates that all telemarketers transmit Caller ID information. In addition, the rules with regard to collecting billing information and payment disclosures have been strengthened, and the TSR overall has been altered to reflect the fact that it now covers calls made by for-profit call centers on behalf of non-profit clients. The TSR defines telemarketing (in pertinent part) as "a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call." Provisions and restrictions of the rule apply to individuals and organizations that use interstate telephone calls to perform such sales campaigns. Some stipulations of the Rule also pertain to "persons or companies other than sellers or telemarketers" and those that "provide telemarketers with Unauthorized access to the credit card system".
Certain industries are not covered by the TSR because, by law, the FTC has no regulatory authority over them. The TSR therefore does not apply to entities such as banks, federal credit unions, federal savings and loans, common carriers (i.e., long-distance telephone companies and airlines), non-profit organizations, and "companies engaged in business of insurance, to the extent that this business is regulated by state law". Yet, the TSR still applies to any outsourced telemarketing call centers with which an organization might contract (including for-profit vendors hired by non-profit organizations.)
Telemarketers should be aware that the Telemarketing Sales Rule in no way "prohibit(s) any attorney general or other authorized state official from proceeding in State court on the basis of an alleged violation of any civil or criminal statute of such State." Violations of do-not-call requests while calling interstate therefore may result in federal and/or state investigations and penalties.
U.S. Securities and Exchange Commission (SEC)
Congress also mandated that the U.S. Securities and Exchange Commission (SEC) take a role in implementing telemarketing rules across the securities industry. Accordingly, in mid-1995, the SEC passed rules regarding identification and payment disclosures, as well as "in-house" do-not-call lists, that apply to the securities industry.
|
