FTC: DNC Shortfall Came Out of Taxpayer Dollars

Funding to cover a $9.4 million shortfall in fees collected for the national no-call list came out of the U.S. general budget and will not be recouped from telemarketers, a Federal Trade Commission official told DM News Friday.

Money to cover the FTC's no-call budget shortfall in federal fiscal year 2003 came from money appropriated to the commission by Congress, said Lois Greisman, associate director of the FTC's bureau of consumer protection, who is in charge of the list. Congress provides money to the FTC from tax revenue.

A report issued last month by the Government Accountability Office showed that in federal fiscal year 2003, the first year of the no-call list's operation, the FTC spent $14.6 million on the list and collected $5.2 million in fees from telemarketers.

“We did not have enough information on the number of telemarketers out there and which area codes they would select,” Greisman said. “Our calculations to generate the fees of $18 million that we thought we would generate fell short.”

Trade groups representing telemarketers expressed concerns last week that the FTC would raise fees for list access to cover the $9.4 million shortfall. However, there will be no attempt to make up the shortfall, Greisman said.

The FTC has touted that registration to the no-call list is free for consumers. However, the Do-Not-Call Implementation Act of 2003, in which Congress gave the FTC authority to charge fees to telemarketers for the no-call list, says that the FTC can collect fees to offset the cost of the list, but does not require the agency to cover the entire cost with fees.

In fiscal year 2004, which ended Sept. 30, 2004, the FTC broke even on the list, spending $14 million and collecting the same amount in fees. Every year, the FTC will reconsider the fees it charges telemarketers for list access, and raise or lower the fees based on how much money it collects, Greisman said.

The FTC already increased the fees once, raising them last year from $25 per area code to $40, and from $7,375 for all area codes to $11,000.

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