Does FTC Plan Christmas Coal for Telemarketers?

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The Federal Trade Commission is gathering information on no-call list violations and could file its first enforcement action in December, an FTC official said yesterday.


Associate director Lois Greisman, whose division is in charge of the no-call list, said the FTC is seeking patterns amid the database of 37,000 complaints the agency has compiled since Oct. 11 and is investigating telemarketers whose names appear frequently. If an enforcement action is warranted, the FTC could be ready to file it in six to eight weeks, just in time for Christmas.


Companies found to be violating the list are more likely to face further investigation to see whether they are breaking other new telemarketing regulations such as call-abandonment and pre-acquired account information rules, she said.


Greisman declined to speculate on the nature of the enforcement action or whether the FTC would pursue a major violator as its first target in an effort to set an example.


"It's similar to how we handle all consumer complaints," she said. "You can't look at each individual, but you look for patterns and trends."


Busting an offending telemarketer could be as simple in some cases as checking whether a repeat violator has downloaded a copy of the no-call list, Greisman said. All telemarketers who make commercial calls are required to obtain the no-call list for the area code into which they are calling.


The FTC has not given details about the nature of the no-call complaints it has received. Greisman acknowledged that consumers might be confused about certain calls that are exempt, including existing-relationship and charity calls.


In cases where a consumer's status as an existing business relationship with a telemarketer is in question, the FTC will contact that consumer as part of its investigation, Greisman said. The agency also will contact the telemarketer and ask for proof of the relationship.


Under the FTC's rules, existing business relationships are defined as any consumer who made a purchase from a company in the past 18 months or an inquiry in the past three months.


Because of consumer confusion over the exemptions, the rate of complaints in the first two weeks since the FTC started taking them is not surprising, said Jeff Schmitt, scripting and compliance manager for Advanced Data-Comm Inc., Dubuque, IA. But the complaint volume possibly is unwelcome even at the FTC, which has to sift through all of them.


"I don't believe the FTC is happy about the fact that they're getting 37,000 complaints," Schmitt said. "I believe a lot of those complaints are related to exempt calls. A process of better education for the public would help."


Schmitt's company primarily conducts B2B and market research calls, both of which are exempt under the no-call list rules. The first reaction of many consumers to these calls often is to hang up before the agent can explain what the call is about.


"Their immediate response is, you called me, I'm on the national no-call list, I'm turning you in," Schmitt said.


Presently the FTC has no mechanism for scrubbing the no-call list of business phone numbers or disconnected lines, Schmitt said. He said he had suggested to the FTC that the agency send an e-mail explaining the exemptions to consumers who registered online and hold other public education activities.


As for the FTC's enforcement of the no-call list, the agency likely first will target flagrant violators who purposely ignore the rules, Schmitt said. Companies that have acquired the list and are complying but let a few calls to registered consumers slip through accidentally will likely receive more tolerance.


"I expect them to be fair-minded about it," Schmitt said. "But I do think that when they find a habitual offender, they will make an example of that individual. As they should."


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