Telemarketing: FTC opens hearings on 'do not call' plan

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The federal trade commission opened a hearing into its national telemarketing "do not call" list proposal last week not with questions on whether the list should be adopted, but with questions on how it should be adopted.

The FTC's proposal, endorsed by Chairman Tim Muris, could proceed as soon as this fall. It would cover marketers and all for-profit companies making calls. The FTC has contended a "do not call" list is constitutional because the list doesn't ban marketing, but merely gives consumers an opportunity to register preferences and requires marketers to follow them. A number of states already offer similar lists and while some face challenge, none have yet been ruled unconstitutional.

At hearings last week on the issue questions centered on how to structure national list; how to mesh it with state lists; how to verify the identity of consumers wanting off; whether marketers with "existing relationships" can still call consumers, and what determines an "existing relationship." There were also questions about how often a marketer would have to update a list, whether consumers would have to pay to put their names on it, and procedures for smaller businesses who wanted to market to a small area.

Both marketing groups and non-profits said they would challenge any government requirement to use the list. A group of non-profits, including the Republican National Committee and the American Conservative Union, wrote President Bush warning an FTC list would be "an unnecessary expansion of government regulation that would do little to achieve its purported goal while harming consumers, non-profits, businesses ... and jobs."

Marketing groups contend the FTC proposal goes beyond protecting consumers from scams and frauds, and limits marketers' First Amendment rights. Some also believe it favors one form of selling over another. "It discriminates among media," said Elissa Myers, director of the Electronic Retailing Association, charging it represents a broad "paternalistic approach" with a potential for high price tag, when a simpler solution is simply hanging up the phone.

Edward Kabak, counsel for the Promotion Marketing Association, said the do not call proposal is unconstitutional because it doesn't just hit abusive marketing, but all marketing. Jerry Cerasale, exec VP of the Direct Marketing Association, warned it could "significantly harm a $278 billion a year industry."

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