JUDGE DENIES INJUNCTION AGAINST NEW TELEMARKETING RULES

Cites 'Strong Public Interest' for Turning Down DMA Request

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WASHINGTON (AdAge.com) -- A federal judge today rejected the Direct Marketing Association's lawsuit to block new telemarketing rules authorized by the Federal Trade Commission.

The DMA sought to block key changes to rules governing telephone sales that are to go into effect March 31 as the FTC prepares to launch its new national "do-not-call" lists this fall. In a seven-page decision U.S. District Court Judge Lee. R. West denied the DMA's request for a preliminary injunction.

'Abusive and invasive practices'
"There is a strong public interest against abusive and invasive practices and acts by the telemarketing industry and the court finds that the public interest is best served by immediate enforcement," Judge West wrote.

The request for an injunction appeared

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in a lawsuit filed by the DMA and four other companies.

Two major rules changes governing telephone sales calls take place Monday. One limits a common sales practice known as "predictive dialing," in which more phone calls are made than telemarketers have operators to handle. Many calls are expected many to go unanswered. Marketers say these "dropped calls" happen about 5% of the time, but under the new rules, the FTC requires no more than 3% of calls can by dropped.

The other change requires telemarketers trying to sell consumers another product to ask for the consumers' credit-card number again in some instances.

"The plaintiffs have argued that immediate enforcement of the challenged regulation will cause them incalculable harm and ... is both technologically and economically unfeasible," the judge wrote. "The unrefuted affidavits demonstrate that [one part of the rule] will 'severely burden' [telemarketers] ... and the challenged regulations will have a substantial and serious economic effect. However, such impact alone cannot be deemed sufficiently irreparable."

Lawsuit still pending
The DMA, which today said it was "disappointed" by the ruling, in its lawsuit argued that the FTC overstepped its legal authority and that marketers had the right to make the calls. It also argued that some of the curbs the FTC sought were unconstitutional. The suit continues.

Two other suits are also pending against the rules, and the American Teleservices Association in its suit is also trying to get a preliminary injunction.

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