FTC: National DNC List Coming by Early 2003

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Some telemarketers have held that the bright side to a national do-not-call list would be salvation from the growing morass of state restrictions. But the Federal Trade Commission's announcement this week of its long-anticipated plan to create a national list has left many wondering if the legal waters will become even muddier.


"What the FTC wants to do is no boon," said Jon Hamilton, president of JHA Telemanagement. "What the FTC wants to do is make it so simple to opt out that very many people will do so. Clearly, the mission of the FTC seems to be to eliminate telemarketing."


FTC officials said they expect the foundation for a national do-not-call list to be in place by the end of this year or by early 2003, after the completion of necessary changes to the Telemarketing Sales Rule. Consumers would be able to sign up, free of charge, by calling a toll-free hotline.


Industry organizations were quick to respond with concern about the announcement. The Direct Marketing Association reiterated its stance that a national list is unnecessary and inappropriate but said it would continue discussions with the FTC.


DMA president/CEO H. Robert Wientzen said the FTC did not fully explore integrating the proposed DNC list with the Federal Communications Commission, which has authority to regulate banks and telephone carriers over which the FTC has no jurisdiction, and state laws regulating telemarketers. Currently, 20 states have DNC lists of their own, with three more scheduled to become effective by early 2003.


"I was surprised they hadn't figured out more of the details," Wientzen said. "I think they're going to discover that the devil is in the details."


Neither the DMA nor the American Teleservices Association support the FTC's proposal in its present form. The ATA's main complaint was that the FTC's plan seems focused on creating a new privacy bill for consumers rather than preventing fraud, which it said was the original intent of the TSR.


"With do-not-call laws on the books in 20 states, a national do-not-call registry seemed a logical next step," said Matt Mattingley, director of government affairs at the ATA. "The FTC's proposal, however, further complicates the situation and offers many more questions than it answers."


A day after the FTC's announcement, the DMA said it would create a watchdog committee charged with investigating complaints of unethical conduct by telemarketers. A company found to be in violation of the guidelines could be penalized with censure, suspension or expulsion from DMA membership.


If one good thing comes out of the FTC's push for a national DNC list, it may be that the telemarketing industry will finally "get its head out of the sand" and deal with the problems that have given it a bad name, said Hamilton, a 30-year veteran of the industry and recipient of the DMA's Teleservices Excellence Award. High call volumes, poor targeting and ignorance or flouting of telemarketing laws have plagued the business for too long.


But the industry also should use the opportunity to make its case that it provides $662 billion and 6 million jobs to the economy, Hamilton said. The FTC's proposal will put those jobs in jeopardy -- possibly as many as half of them -- he estimated.


"The industry needs to get smaller and more consumer-focused," Hamilton said, "but this will do it in a really harsh way."


The national DNC list heads up the FTC's sweeping program of proposed changes to the TSR. Other proposed changes include:


o Ban on the blocking of caller ID information by telemarketers.


o Prohibition against the sharing of consumer billing information for the purpose of telemarketing because of concerns about consumers receiving unauthorized charges.


o Clarification of the TSR stating that the use of predictive dialers resulting in dead air represents a violation.


o Expand required disclosures for prize and sweepstakes promotions to include informing consumers that purchase will not increase chances of winning.


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