Direct marketers take issue with proposed FTC rules

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Direct marketers blasted the Federal Trade Commission's proposal to create a national "do-not-call" list, warning the FTC could do serious harm to the $668 billion telemarketing industry.

The FTC proposal, unveiled last week by Howard Beales, director of the Bureau of Consumer Protection, would update current telemarketing sales rules that, among other things, define when telemarketers can place calls. The proposal would create a government do-not-call list to help consumers block unwanted phone pitches.

Marketers fear the FTC might not allow consumers to pick and choose which lists they want to be on and which they want to be removed from. If all marketers are barred from calls to those on the list, it could have dramatic economic impact on the telemarketing sector, they warned.

The industry employs six million people and generated 37% of the $1.8 trillion in direct marketing sales last year. That surpasses direct mail's $582 billion tally, according to the Direct Marketing Association.

DMA President-CEO H. Robert Wientzen criticized the FTC proposal as "unnecessary and inappropriate." The DMA has kept its own do-not-call list for 17 years; that list currently has 4.25 million names that association members can't call. But short of ejecting members, the DMA has no legal authority to enforce its list and violation is not a criminal offense.

Mr. Wientzen also said the FTC lacks authority over some telephone marketers-including banks and political campaigns-and over calls made within a state.

"We do not want to have the federal government spending taxpayer money to interfere with the free exchange of information, which we think is a freedom-to-advertise and a freedom-to-market issue," he said.

The FTC said the criticism is premature since it has not yet decided whether to offer options within the list. Already, 20 states have created do-not-call lists and 23 others have legislation pending. So far those lists-which apply only to telemarketing to people in those states-have had minimal impact. Florida's 15-year-old list, the first enacted in the country, has only 142,000 names, according to the Florida Dept. of Agriculture & Consumer Services.

The proposed changes, which face FTC hearings, also would make the rules effective for the first time for non-profits. The rules also would bar telemarketers from sending billing information obtained from a customer to other telemarketers. It is the do-not-call list, however, that is attracting the most controversy.

"The arguments against it are a smokescreen being pumped out by an industry trying to protect itself," said David Butler, a spokesman for Consumers Union.

good vs. bad

DMA's Mr. Wientzen said major telemarketers actually prefer do-not-call lists since consumers who sign up for them are "not good customers." His problem with the list is that in many cases consumers object to the tactics of smaller companies, but the proposed FTC list won't distinguish between callers.

"The little companies ... and some of the fly-by-night companies are not following our list, and my guess is that they're not going to follow the FTC list either. They're the bad guys," Mr. Wientzen said.

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