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Telemarketers Still Face State Challenges

WASHINGTON – While telemarketers have been focusing on the challenges of federal regulation, state lawmakers have been busy writing onerous new rules for the industry, the American Teleservices Association’s new state legal expert said yesterday.

States continue to press ahead making rules of their own despite federal efforts to nationalize telemarketing rules that exist on the state level, Mitch Roth, attorney with the law firm Williams Mullen, said yesterday at the ATA’s annual Washington conference here at the Mayflower Hotel.

Roth, who was selected eight-weeks ago as a replacement for departed ATA state legislative counsel C. Tyler Prochnow, urged telemarketers to keep lobbying lawmakers in spite of the apparent inevitability of the passage of some state rules. While they are unlikely to prevent the creation of some rules, such as state do-not-call lists, their efforts can help to soften the provisions of such rules and make them more industry friendly.

“Now is not the time to run away,” Roth said.

In particular with state DNC laws, telemarketers can affect important provisions, such as exemptions, penalties, fees and registration and bonding requirements, Roth said. For example, states that require consumers to pay fees to register for DNC lists typically have lower rates of registration when compared to states with free registration.

The difference can be dramatic, Roth said. Whereas states that charge consumer fees average 5 percent to 10 percent consumer registration, free-registration states have rates of 25 percent to 50 percent.

There are 28 states that have DNC list laws, Roth said. That is up from 21 states at this time last year and 14 states in 2001.

Another 15 states have DNC laws pending. Other states are making their existing DNC laws tougher, such as in Kentucky, which in the past year eliminated exemptions to its list and expanded registration requirements.

States are becoming “creative” in using telemarketing rules to raise revenue, Roth said. For example, Wisconsin’s law requires telemarketers to pay a $700 fee to register three telemarketing phone lines and additional $75 tax for every line above those.

Louisiana requires telemarketers to post a general registration bond and a bond for acquiring the DNC list, Roth said. New York is currently considering increasing the cost of acquiring its state list from $500 a year to $800.

“It really is becoming a monetary and money-making machine for the states,” Roth said.

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