Telemarketing Forum: Business, Regulators Tangle Over Pre-Emption Issue

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WASHINGTON -- Telemarketing industry representatives debated with regulators and privacy advocates for 30 minutes over whether a proposed national do-not-call list should pre-empt existing state DNC lists, but no consensus appeared to be reached.

The Federal Trade Commission's three-day forum on proposed changes to the Telemarketing Sales Rule opened here yesterday with telemarketers arguing that though they don't support a national DNC list, if one is created it should take precedence over the myriad state DNC laws already in place.

Unless the federal list pre-empts existing state lists, it will simply add to the already-confusing legal situation confronting telemarketers, they said.

"The industry doesn't need another layer of do-not-call lists," said Arthur Conway, president of DialAmerica Marketing, Mahwah, NJ. "We're having a difficult enough time handling the state lists."

Differences between state lists and the national list would create a legal quagmire, said C. Tyler Prochnow, state legislative counsel for the American Teleservices Association. For example, while many state laws exempt certain industries and types of telemarketing calls from their DNC lists, the FTC's proposed national list would carry few exemptions.

Telemarketers say this would require them to spend more on legal support to help them develop compliance policies and more money in technology and staff to ensure they stay in compliance.

"It discourages small businesses from getting into telemarketing," said George Wallace, representative of the American Financial Services Association. "They do use telemarketing and should use telemarketing."

Privacy advocates at the forum were unsympathetic to the industry's complaints about costs telemarketers could incur from the national DNC list.

"I'm sorry the industry doesn't want to pay for its sins," said Robert Bulmash, president of Private Citizen Inc. "But somebody has got to pay for us to have privacy in our homes, which is our right."

Others argued that if the FTC creates a national list that is more restrictive than state laws, state attorneys general could enforce the federal law, anyway. The FTC could create a provision in the rule allowing states to enforce the national DNC list.

"Once you have a national list, the issue of pre-emption is a ghost issue," said Rex Burlison, chief counsel of the Missouri attorney general's office and representative of the National Association of Attorneys General.

Burlison and an FTC official suggested that names on state lists and the national DNC list could be merged into a single file. However, enforcement of those lists would be dealt with separately, and state attorneys general would still have the right to enforce their own DNC laws.

Industry representatives said implementing this idea would prove complicated.

"In concept, it sounds like a good goal," said Linda Goldstein, an attorney representing the Electronic Retailing Association. "When you get into the details, you get into a lot of problems."


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