Congress Must Approve; Telemarketers Vow to Fight Law

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WASHINGTON (AdAge.com) -- The Federal Trade Commission today unveiled new telemarketing "do not call" regulations that will require congressional approval before they are implemented.

The rules create a national telemarketing do-not-call list and allows consumers to call or go online to put their names on the list, where they would remain for five years. Consumers would no longer pay any of the list's costs, and telemarketers would shoulder the entire $16 million operation, with each marketer required to buy and update the list quarterly.

Challenges expected
The list will take effect roughly six months after congressional approval acts, though court challenges, which are expected, could delay its release.

Each marketer would have to buy the list, even if using a telemarketer who already had the list.

"The idea is not to pay once and pass around the list," FTC Chairman Timothy Muris said.

Marketers who failed to use the list could be fined $11,000 per violation.

FCC plan
The rules cover sales calls made

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by telemarketing companies and industries the FTC oversees, including publishers. Banks and phone companies, also big users of telemarketing, are regulated by the Federal Communications Commission, which has started work on a simialr proposal. Mr. Muris said if the FCC acts, 80% of telemarketings calls would be covered.

Nonprofit and political groups do not have to use the lists.

Marketing groups opposed to the list said today they would fight to prevent congressional approval and would challenge the constitutionality of the list in court.

The Direct Marketing Association said it would "pursue all legal and equitable courses of action to protect the American teleservices industry."

'Unnecessary government intrusion'
In a statement, DMA President-CEO Robert Wientzen called the list an "unnecessary government intrusion in the private sector marketplace," and that the FTC had overstepped its legal authority. The DMA said $296 billion in goods and services were bought from outbound telemarketing, though a consumer's group is raising questions about that figure.

The FTC chose not to preempt already established do-not-call lists from 28 states, meaning that national marketers, at least initially, will have to buy both the federal and state listes. FTC officials said they hope the lists will be "harmonized" in a year or two.

Exempted from the list are marketers who had sold a consumer something in the last 18 months or received an inquiry from a consumer in the last 3 months. There were restrictions, however, on how marketers could use the exemption. FTC officials said Time magazine could contact subscribers and offer Sports Illustrated, but a subscriber on the do-not-call list couldn't be asked to buy America Online, though AOL Time Warner owns all three properties, because that would be an unrelated transaction.

Not a free speech ban
Mr. Muris disputed marketers' contention that the action amounts to a ban on First Amendment speech and also questioned whether marketers would really lose significant sales.

"We are not banning telemarketing sales calls. We are giving consumers the option to protect the privacy in their own homes," he said.

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