GAO Finds $9.4M DNC Funding Shortfall

Fees collected from telemarketers to fund the national no-call list fell short by $9.4 million in federal fiscal year 2003, and the gap was not closed in fiscal 2004, according to a General Accountability Office report issued Friday.

The Federal Trade Commission spent $14.6 million on the no-call list in fiscal 2003, which ended Sept. 30, 2003, but collected only $5.2 million in fees, according to the GAO report. In fiscal 2004, the FTC collected $14 million in fees from telemarketers, just enough to cover its expenses for the year.

The money to cover the shortfall has come out of the Treasury. Whether the costs will be passed on to telemarketers is unclear.

An FTC spokesman did not return a phone call at deadline late Friday afternoon. According to the report, the FTC has filed 10 lawsuits under the no-call list while the Federal Communications Commission has issued 16 citations and entered into two consent decrees.

The FTC has conducted two surveys to gauge whether the no-call list has been effective in blocking telemarketing calls, the GAO said. One found that 90 percent reported a decrease in telemarketing calls while the other found 87 percent.

One survey showed an 80 percent reduction in telemarketing among consumers who registered for the list. However, the GAO called the survey suspect because it relied on respondents' memories of how many telemarketing calls they had received at least three months before taking the survey.

Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting

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