States: Don't Pre-empt DNC Lists

Attorneys general in 49 states, joined by the Hawaii Office of Consumer Protection, the Corporate Council of the District of Columbia and several territorial law enforcers, are calling on the Federal Trade Commission not to pre-empt state do-not-call lists if a national DNC list is passed as part of proposed changes to the Telemarketing Sales Rule.

Telemarketing industry advocates have warned the FTC that its proposed national DNC list could create a legal nightmare for businesses if state lists are also allowed to stand. Already, 22 states have created DNC lists or enacted law creating them, and other states have DNC legislation pending.

In statements filed with the FTC as part of the written comment period on proposed changes to the rule, state attorneys general argued that state lists still will have relevance even with a national list.

The comment period ended April 15. The FTC received about 41,000 comments.

“The FTC simply doesn't have jurisdiction over all the telemarketers who invade the privacy of Michigan's consumers,” said Michigan Attorney General Jennifer Granholm, whose state is fashioning DNC legislation. “It's crucial that our state be able to enforce its own laws to protect our own citizens.”

The FTC lacks authority over several industries that use telemarketing, including banking, telecommunications and insurance, and cannot regulate calls made by businesses to consumers in their own state.

The FTC also lacks legal authority to pre-empt state law, the attorneys general argued. Also, by pre-empting state lists, the commission would rob consumers in some states of fees they paid to register for the lists.

Trade groups also filed comments with the FTC against the proposed changes. The Newspaper Association of America argued that newspapers should be exempted from the proposed national list. Newspapers depend on telemarketing to generate new subscriptions, the NAA said. Also, newspapers near state borders would suffer an unfair disadvantage because in-state competitors would be unaffected.

The Direct Marketing Association filed comments critical of the FTC's proposed changes. The changes would hurt the national economy and take away entry-level and minority jobs without having a major effect on fraudulent telemarketing, the DMA said.

In its comments filed with the FTC, the American Teleservices Association called the proposals “fatally flawed” and said they exceed the power granted the FTC by Congress.

Having state lists would make a national list redundant, said Matt Mattingley, legislative affairs director for the ATA. He said the DMA maintains its private DNC list, the Telephone Preference Service, and individual companies are required to maintain their own lists under the current federal rules.

“At some point, we need to stop making lists,” Mattingley said.

Mattingley said the arguments by the attorneys general reinforce that the FTC's proposed national list would be redundant. The attorneys general have offered support for the FTC's proposal, but if the commission tries to pre-empt the state lists, the states would have reason to fight, he said.

“There appears to be no compelling reason for the FTC list,” he said. “Why would we have it? By endorsing both, the attorneys general are trying to avoid a confrontation with the FTC.”

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