Legislation Clarifies Uncertain Areas

Share this article:
Though many laws affecting telemarketing are ill-considered attempts to punish the industry as a whole for perceived abuses by a minority, sometimes state legislatures can get things right and pass legislation that clarifies a murky area of the law or that attempts to unify treatment of an aspect of the business that previously was treated inconsistently.


Two pieces of recently passed state legislation further these benevolent goals, rather than fueling an anti-telemarketing furor. Though you may disagree with what each piece of legislation says, their purpose does not appear to be punitive or inflammatory. Rather, they are reasoned attempts to address consumers' needs.


First, the Kentucky Senate adopted Resolution 162 on March 22. This resolution's goal is to achieve uniformity in the treatment of telemarketing nationwide, both within each state and between them (i.e., intrastate and interstate calling).


The resolution is a request by Kentucky to the U.S. Congress to direct the Federal Communications Commission to clarify state jurisdiction over interstate telemarketing calls. The resolution notes that the legislative history of the Telephone Consumer Protection Act states that the TCPA "was needed because states do not have jurisdiction over interstate calls." Though Kentucky has a state do-not-call list, the resolution continues, this lack of jurisdiction "will only serve to hurt Kentucky companies attempting to do business with Kentucky residents while leaving out-of-state marketers free to make calls to anyone, even those on a no-call list."


I agree that a clarification of jurisdiction is needed with regard to the application of state law to interstate telemarketing activity.


As anyone who calls nationwide knows, the hardest part of complying with federal and myriad state laws is not the restrictions of the laws themselves but determining what the requirements are. The various state do-not-call lists, for example, come from several sources in varying formats for different fees and with differing frequencies. Just getting them is a grueling administrative exercise. Next, you have federal and state curfews, disclosures, registrations, laws concerning predictive dialers and so on.


In short, the patchwork-quilt approach to regulating an interstate activity like telemarketing results in more effort spent finding the requirements than implementing them. This is inefficient and not in the interest of consumers or industry.


The second piece of legislation, Idaho House Bill 144, signed by the governor April 4, is less theoretical in scope but is similar in that it clarifies an aspect of telemarketing where guidance was needed. The law addresses telemarketers' use of consumer information that includes credit card or other financial account numbers - that is, situations where the telemarketer already has the consumer's credit card number before calling the consumer.


My clients have asked me about the legalities of this situation many times, often concerning the potential purchase of a list of consumers that includes their credit card numbers. Though Congress recently offered some guidance to financial institutions (e.g., the credit card issuing bank) concerning this subject in the Gramm-Leach-Bliley Act of 1999, the telemarketing service bureaus themselves had no law, federal or state, to guide them in this area, other than general anti-fraud and anti-deception rules found in several places, such as the Telemarketing Sales Rule. Purchase of these lists was legal, but the only guidance regarding their use was that their fraudulent use would be illegal.


Idaho H.B. 144 sets forth steps that a telemarketer must follow if it has a consumer's previously obtained account information and calls that consumer. The law requires a telemarketer to obtain written or oral authorization to charge any fee to the account and to clearly disclose that the telemarketer has the account number; that the account will be charged; the amount of the charge; and the name, address and telephone number of the entity that will be charging the account. If the authorization is oral, it must be recorded and kept for two years or the consumer must provide the last four digits of the account number.


H.B. 144 is a good law because it provides guidance to industry and protection to consumers in an area lacking in both. While it may not be the ideal way to address this issue from the consumer's or industry's point of view, it is an honest attempt, and as it is implemented, it may give other states and the federal government ideas for improvement.


The framers of the Constitution envisioned just such a role for the state legislatures regarding their relationship with the federal government. When the states act as laboratories of law, attempting to solve problems in varying ways and acting as an example for Congress and other states, state legislators are living up to their duties under the Constitution.


In the coming months, more laws will be enacted, but we are still in the time of year when introduced bills far outnumber signed laws. Bills that would create state do-not-call lists are still being introduced in several states, including California, Colorado, Illinois, Louisiana and South Carolina, as are laws concerning the blocking of caller-ID devices.


Finally, New York has issued the forms businesses need to order the state's do-not-call list. It will be available quarterly on CD-ROM or on the Web (with unlimited access) for an annual fee of $500. This brings the number of states with implemented lists to 14, with more certain to come.


Share this article:
You must be a registered member of Direct Marketing News to post a comment.

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

Candidates Offer Change In The Form of Targeting

Candidates Offer Change In The Form of Targeting

A campaign for Ben Carson raised $2.8 million despite his lack of cooperation.

Target Names Retail Veteran Brian Cornell as CEO

Target Names Retail Veteran Brian Cornell as CEO

He leaves the top job at PepsiCo Foods to take the spot vacated by Greg Steinhafel in the aftermath of the data breach.

NBA Names Insurance Exec as its CMO

NBA Names Insurance Exec as its CMO

Nationwide and State Farm veteran Pamela El takes the league's marketing helm next month.