States Seek to Keep Stake in DNC Enforcement

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Concerns about enforcement and legal loopholes are driving the growth of state do-not-call lists despite federal plans to start a national no-call registry, state officials said last week.

The continued creation of state no-call lists seemingly fulfills the telemarketing industry's oft-stated warning that a federal registry will just add another layer to telemarketing regulations rather than simplify them. Yet state legislators and regulators appear to be uncomfortable with leaving enforcement of telemarketing privacy law entirely in the hands of the federal government.

A few states show signs that they are ready to carry out the Federal Trade Commission's promise of "harmonization" between state and federal lists. However, with Gov. Ronnie Musgrove's approval of DNC legislation April 11, Mississippi became the 29th state to create a no-call list and provided further evidence of the continued proliferation of state lists.

In Mississippi, state legislators were concerned with providing consumers an easy way to lodge complaints about telemarketing no-call violations. The state thought consumers would be intimidated by filing a complaint with a federal agency and pursuing a federal court case, said Nielsen Cochran, central district commissioner for the state Public Service Commission.

In Mississippi, the PSC will maintain the no-call list, which takes effect July 1. Cochran is one of three elected PSC commissioners, with each having a local district office in addition to one in the state capital. Complaints would be fielded by the local offices and processed in the state courts.

"Consumers would be better served going through their routine Mississippi channels," he said.

Cochran's concerns about enforcement of the federal law are echoed in other states such as Massachusetts, where a no-call list took effect April 1.

"States are going to make laws to protect consumers," said Lizzie Lewis, director of communications at the Massachusetts Office of Consumer Affairs and Business Regulation. "We don't want to leave that up to anybody but ourselves."

The FTC is continuing talks with states that enacted DNC laws as well as several that have such laws under consideration, said David Torok, attorney with the FTC's division of marketing practices and program manager for the national no-call registry.

Most but not all states will merge their lists with the national registry, Torok said. Some have laws prohibiting the sharing of DNC data -- even with the FTC -- and those rules will be difficult to change.

The FTC is assuring state regulators and law enforcers that they will be able to pursue violations of the national no-call list by filing suits in federal court even if their states lack DNC laws, Torok said. All will have access to the FTC's Consumer Sentinel database, where no-call violations will be recorded.

"It's a work in progress," he said. "We're trying to get as much harmonization as we can as quickly as we can."

Potential loopholes in the federal list are another problem for state regulators. Though the Federal Communications Commission may soon address the issue, there are concerns about certain industries that fall outside the FTC's jurisdiction, including common carriers and financial firms, Cochran said.

On the other hand, many state DNC laws exempt several types of companies. In Mississippi, these include "newspapers, state-licensed Realtors, insurance companies, automobile dealers, funeral homes, financial institutions and some charitable organizations," according to a state PSC press release.

In Massachusetts, where more than one-third of the state's 2.8 million residential phone lines have been registered to the state's no-call list, the loophole of concern was intrastate calls, or calls that originate and end in the same state. The federal government can regulate only calls made between states, Lewis said.

Torok takes it as heartening that states are recognizing the national list in the language of their DNC laws. California canceled plans for a state list in favor of using the national registry, and a recent Michigan law requires a state list only if the federal government fails to create one within 120 days of the law's passage.

The Massachusetts law promises to share names on the state list with the FTC registry. Massachusetts is telling its consumers to sign up for the state list and thus receive both state and federal protection, Lewis said.

That is small comfort to telemarketers, who end up having to pay both the states and the FTC to access the various DNC lists anyway. Their hope was for a one-stop source for all no-call lists.

"It would make my life easier and my clients' lives easier," said Mitch Roth, state legislative counsel for the American Teleservices Association. "It would be like giving people one list."

Their concerns earn few points with state officials such as Cochran.

"The problems associated with this were brought on by telemarketers," Cochran said.

It could be worse, Cochran said. Some consumers have asked the commission why they should have to register for a no-call list at all.


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