[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                  ENHANCING FTC CONSUMER PROTECTION IN
                        FINANCIAL DEALINGS WITH
                     TELEMARKETERS AND THE INTERNET

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,
                        AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 23, 2007

                               __________

                           Serial No. 110-72


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                  JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California          JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts          Ranking Member
RICK BOUCHER, Virginia               RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York             J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey       FRED UPTON, Michigan
BART GORDON, Tennessee               CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois              NATHAN DEAL, Georgia
ANNA G. ESHOO, California            ED WHITFIELD, Kentucky
BART STUPAK, Michigan                BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York             JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland             HEATHER WILSON, New Mexico
GENE GREEN, Texas                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              CHARLES W. ``CHIP'' PICKERING, 
    Vice Chairman                    Mississippi
LOIS CAPPS, California               VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania             STEVE BUYER, Indiana
JANE HARMAN, California              GEORGE RADANOVICH, California
TOM ALLEN, Maine                     JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois             MARY BONO, California
HILDA L. SOLIS, California           GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas           LEE TERRY, Nebraska
JAY INSLEE, Washington               MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York          TIM MURPHY, Pennsylvania
JIM MATHESON, Utah                   MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina     MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana

                                 ______

                           Professional Staff

                 Dennis B. Fitzgibbons, Chief of Staff

                   Gregg A. Rothschild, Chief Counsel

                      Sharon E. Davis, Chief Clerk

               David L. Cavicke, Minority Staff Director

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                   BOBBY L. RUSH, Illinois, Chairman
JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida,
    Vice Chairman                         Ranking Member
G.K. BUTTERFIELD, North Carolina     J. DENNIS HASTERT, Illinois
JOHN BARROW, Georgia                 ED WHITFIELD, Kentucky
BARON P. HILL, Indiana               CHARLES W. ``CHIP'' PICKERING, 
EDWARD J. MARKEY, Massachusetts          Mississippi
RICK BOUCHER, Virginia               VITO FOSSELLA, New York
EDOLPHUS TOWNS, New York             GEORGE RADANOVICH, California
DIANA DeGETTE, Colorado              JOSEPH R. PITTS, Pennsylvania
CHARLES A. GONZALEZ, Texas           MARY BONO, California
MIKE ROSS, Arkansas                  LEE TERRY, Nebraska
DARLENE HOOLEY, Oregon               SUE WILKINS MYRICK, North Carolina
ANTHONY D. WEINER, New York          MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah                   MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana          JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex 
    officio)

                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     1
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     3
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................     5
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     6
Hon. John Barrow, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     6
Hon. Darlene Hooley, a Representative in Congress from the State 
  of Oregon, opening statement...................................     7
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     7
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     8
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    10
Hon. Mike Doyle, a Representative in Congress from the State of 
  Pennsylvania, opening statement................................    11
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, prepared statement....................    12

                                Witness

Lydia B. Parnes, Director, Bureau of Consumer Protection, Federal 
  Trade Commission...............................................    13
    Prepared statement...........................................    15


                   ENHANCING FTC CONSUMER PROTECTION



                       IN FINANCIAL DEALINGS WITH



                     TELEMARKETERS AND THE INTERNET

                              ----------                              


                       TUESDAY, OCTOBER 23, 2007

            House of Representatives,      
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:10 a.m., in 
room 2123, Rayburn House Office Building, Hon. Bobby L. Rush 
(chairman) presiding.
    Present: Representatives Barrow, Ross, Hooley, Stearns, 
Pickering, Radanovich, Pitts, Terry, Burgess, Blackburn, and 
Barton.
    Also present: Representative Doyle.
    Staff present: Consuela Washington, Judith Bailey, 
Christian Fjeld, Peter Goodloe, Andrew Woelfling, Valerie 
Baron, Sharon Davis, Erin Bzymek, Megan Mann, Brian McCullough, 
William Carty, and Chad Grant.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. The subcommittee will come to order.
    Today we are holding a legislative hearing on three 
consumer protection bills involving the Federal Trade 
Commission. As is the case with most of the business conducted 
in this subcommittee, each bill represents bipartisan 
cooperation in consultation with the germane expert regulatory 
agency, in this case the FTC.
    Subsequent to today's hearing, we will immediately move to 
markup all three bills and, I hope, report them favorably to 
the subcommittee.
    The first bill before us today is H.R. 2601, introduced by 
my friend, the distinguished ranking member of the 
subcommittee, Mr. Stearns, a bill to extend the authority of 
the Federal Trade Commission to collect fees, to administer and 
enforce the provisions relating to the National Do-Not-Call 
Registry.
    In 2003, Congress passed the Do-Not-Call Implementation 
Act, which authorized the FTC to establish fees sufficient to 
implement the National Do-Not-Call Registry as originally 
authorized by the Telecommunications and Consumer Fraud and 
Abuse Prevention Act of 1994. I do not think it is hyperbole to 
say that this may quite possibly be one of the most popular 
laws and Government initiatives in recent history. Consumers 
have registered more than 146 million telephone numbers since 
the registry began in operation in 2003.
    The FTC's authority to annually establish the appropriate 
level of fees to charge telemarketers for access to the 
registry expires in 2007, and Mr. Stearns' bill extends that 
authority through fiscal year 2012.
    No doubt, if Members of Congress wish to avoid the wrath of 
millions of angry constituents who are being called by 
telemarketers, it is in our best interest to facilitate the 
continuing operation of the Do-Not-Call Registry. We are not 
dumb. We do know what we are doing, and we do not want to have 
the anger and angst of all our constituents breathing down our 
neck.
    Second, the subcommittee will deliberate on H.R. 3461, the 
Safeguarding America's Families by Enhancing and Reorganizing 
New and Efficient Technologies Act of 2007, or the SAFER Net 
Act, introduced by my friend and colleague from Illinois, 
Congresswoman Melissa Bean.
    The bill directs the FTC to carry out a nationwide public 
awareness campaign about Internet safety and directs the 
Commission to annually report to Congress on its activity to 
promote Internet safety. In addition, the bill authorizes $10 
million for 1 year to carry out this public awareness campaign.
    Finally, the last bill the subcommittee will take up is 
H.R. 3526, a bill to include all banking agencies within the 
existing regulatory authority under the Federal Trade 
Commission Act with respect to depository institutions. 
Chairman Barney Frank of the Financial Services Committee 
introduced the bill, and he has asked the Energy and Commerce 
Committee to expedite the exercise of its jurisdiction in order 
to facilitate its consideration on the House floor's suspension 
calendar. Today's hearing, followed by an immediate markup, is 
the first step in this expedited process.
    Under section 5 of the FTC Act, banks are exempted from the 
Commission's broad enforcement authority to prevent unfair 
methods of competition and deceptive financial practices, and 
under section 18 of the Act it is the Federal Reserve that has 
the sole authority to write consumer protection bills affecting 
depository institutions.
    Unfortunately, the Fed has been, quite frankly, asleep at 
the switch and negligent in its duties. Despite a joint letter 
from Chairman Dingell and Chairman Frank on May 11th, 
complaining about the lack of consumer protection rules, 
Federal regulators continue to lack even a strategy for better 
Federal protection of financial consumers. In response, H.R. 
3526 will allow both the Comptroller of the Currency and the 
FDIC to write consumer protection rules governing depository 
institutions in addition to the Federal Reserve's existing 
authority.
    The Financial Services Committee already held 2 days of 
hearings in July on consumer protection in the financial 
services industry, and it is my intent to hold further hearings 
on this matter next year in addition to the hearings we are 
conducting today.
    I fully support Chairman Frank's bill, but as I have said, 
the lack of consumer protection at depository and other 
financial institutions is a problem, and I hope to effect 
closer scrutiny by Congress and this committee during the next 
session.
    Lastly, I want to thank our witness today, Ms. Lydia 
Parnes, Director of the FTC's Bureau of Consumer Protection, 
who is no stranger to this subcommittee, appearing before us 
today, and I look forward to hearing her opinions and insights 
on these three consumer protection bills.
    With that, I yield back the balance of my time, and I 
recognize the ranking member, Mr. Stearns of Florida.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Good morning and thank you, Mr. Chairman.
    I also want to thank Ms. Parnes for being here this 
morning.
    These three bills, my colleagues, fall under our 
jurisdiction. The Federal Trade Commission is under our 
jurisdiction as well as the Consumer Protection Agency.
    Now, the first bill reauthorizes, as the chairman 
mentioned, one of the most popular bills that we have ever 
enacted, the Do-Not-Call Act. I would stipulate that, if we 
could pass one of these bills every other month, the approval 
of Congress, Mr. Chairman, would rise significantly. So that is 
how popular this bill has been.
    It has been clear that since the last inception that many 
Americans like having a means to make their home phone numbers 
free from telemarketing phone calls. The legislation I 
introduced with yourself, Chairman Dingell and Ranking Member 
Barton reauthorizes the Do-Not-Call Act. I have an amendment, 
Mr. Chairman, that I plan to offer, and will provide more 
detail on it when we go to markup.
    The Do-Not-Call Registry implemented a list maintained by 
the FTC containing home phone numbers of consumers voluntarily 
placed on the list. Telemarketers then paid to access the list 
to know which numbers they cannot call under the Do-Not-Call 
Act. This is a straightforward program, and has benefited both 
the consumers and the telemarketers. The telemarketers, in this 
case, do not waste time calling households that are not 
interested in receiving unsolicited business offers over the 
phone, and consumers have a means to stop calls they do not 
want. I have heard some arguments for improvement to the list 
to make it more effective and to keep it current. I welcome our 
Director of the Bureau of Consumer Affairs at the FTC, and look 
forward to discussing the suggestions that we have with her.
    My colleagues and Mr. Chairman, the other two pieces of 
legislation that we will discuss today are H.R. 3461, the SAFER 
Net bill, sponsored by our colleague from the Financial 
Services Committee, Ms. Bean, and H.R. 3526, sponsored by 
another of our Financial Services' colleagues, in fact, the 
chairman of the Financial Services, Mr. Frank, from 
Massachusetts, which addresses consumer protection regulation 
for financial institutions.
    The first one, H.R. 3461, I support the intent of creating 
a well-informed consumer-base by raising awareness of the 
problems and dangers that await uninformed users on the 
Internet. A global communication network that permits 
anonymity, fake identities and criminal enterprises to exist 
and to gain access to anyone at any time is obviously a threat 
to everyone and anyone who interacts on the Internet. We should 
take this very seriously. We have seen through our work on 
spyware by Mrs. Bono and Mr. Towns, that many criminals have 
Web sites disguised to hide their intent so they can take over 
a user's computer or can load malicious software on it to steal 
their identities.
    Of course, the dangers that are inherent on the Internet do 
not stop with dangers to consumers' identities. The Internet is 
a serious danger for our young people if precautions are not 
taken. We learned through this consumer investigation and 
through this committee's investigation into online child 
pornography that the safety of one's home can be invaded 
through the Internet by predators using the tools to access our 
kids even when we think they are safe under the roofs of our 
very own homes. Because of this danger, parental supervision is 
necessary, and parents must be vigilant in educating and in 
communicating with their children about maintaining their 
guard. We do not require a license to surf the Internet nor 
should we. Whether a parent permits their child to access the 
Internet is their choice, but parents should be aware of the 
dangers of the Internet to their children and the tools that 
are available to combat these threats.
    I look forward to hearing more from the FTC about their 
efforts to help educate the consumers on this front.
    Finally, we are here to discuss H.R. 3526, a bill to 
include the Federal financial regulators within the authority 
of the FTC. While banks and most financial institutions are not 
within this committee's jurisdiction, direct jurisdiction, 
consumer protection is. I agree with the premise that banks and 
other financial institutions should be penalized for violating 
consumer trust if they engage in unfair, deceptive acts. We are 
watching the housing boom quickly deflate for many reasons, and 
there is much blame, obviously, to go around.
    Among the stories coming out of the subsequent spike in 
foreclosures are examples of people trying unsuccessfully to 
speculate on homes in the hopes of a quick profit as well as 
many who bought homes they just could not afford. Well, I 
believe everyone has to take responsibility for their personal 
finances. I welcome the opportunity to discuss what regulations 
currently exist to protect these consumers at the Federal level 
and what regulations exist at the State level where many of the 
nondepository mortgage brokers are regulated outside the reach 
of the Federal banking regulators.
    Just on a closing note, Mr. Chairman, and perhaps as a note 
of caution, we are moving on these last two bills very quickly, 
perhaps in a couple of days to the full committee, and it 
appears to me it might be a forced march to some people who 
want to have amendments. We have not had a chance to discuss 
them. I would suggest that we tell Mr. Dingell that perhaps we 
might need a little more time between a markup and going to 
full committee if there are others who want to contribute.
    With that caution of mine, I am very pleased that we are 
having this hearing, and I thank you for the time.
    Mr. Rush. The Chair thanks the gentleman from Florida and 
now recognizes the gentlelady from Illinois, Ms. Schakowsky, 
for 5 minutes of opening statements.

 OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Chairman Rush and Ranking Member 
Stearns.
    It would be hard to overstate just how important today's 
hearing is given that the issues that we are looking at today 
affect the lives of millions of Americans across the country. 
Politicians sometimes talk about kitchen table politics, and we 
should all remember that the National Do-Not-Call Registry has 
145 million telephone numbers representing millions of 
Americans who do not want to be disturbed by telemarketers when 
they are at their kitchen tables, eating dinner.
    Likewise, we have all heard the disturbing stories of 
predators using the Internet to lure children away from their 
homes, and as a grandmother of four, I am proud to be a 
cosponsor of H.R. 3461, the Safeguarding America's Families by 
Enhancing and Reorganizing New and Efficient Technologies Act 
of 2007, and the clever acronym, the SAFER Net Act. This 
legislation will, among other things, promote safe online 
activity among children, something that is so crucial as more 
and more of our children at earlier and earlier ages go online.
    Finally, we are all distressed by the prevalent stories 
about predatory lending, subprime mortgages, hidden outlandish 
fees, and other deceptive and unfair practices that financial 
institutions can use to take advantage of consumers, especially 
with low and marginal incomes, who simply do not have access to 
the information they need to make informed decisions. The 
negative consequences to our entire economy are growing more 
obvious, and I am, therefore, glad that the subcommittee is 
acting today on Chairman Frank's legislation to include banking 
agencies under the Federal Trade Commission Act to ensure that 
depository institutions are regulated to prevent these unfair 
and deceptive financial practices from continuing.
    I would like to welcome and look forward to hearing from 
our witness today, Lydia Parnes, the Director of the Bureau of 
Consumer Protection at the Federal Trade Commission.
    I would like to underscore that I stand ready to work with 
my colleagues and with the Commission to ensure that you have 
the resources to fulfill your mission. I was particularly 
pleased to read in your testimony that the FTC has committed 
itself not to purge any telephone numbers from the Do-Not-Call 
Registry, pending any Congressional action, and I look forward 
to working with my colleagues, especially Representative Doyle, 
to ensure that, once someone registers his phone number with 
the registry, it stays on that list.
    I thank you, Mr. Chairman, and I yield back my time.
    Mr. Rush. The Chair thanks the gentlelady.
    The Chair now recognizes the ranking member of the full 
committee, the gentleman from Texas, Mr. Barton, for 5 minutes 
of opening statements.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman.
    I am glad we are having a legislative hearing on these 
three bills. They all seem to be bills that address a need. It 
is a little unusual to do three at one time, but I guess people 
in Chicago are just more efficient, so I look forward to 
hearing from the witnesses and in working together on follow-up 
in terms of moving the legislation.
    Mr. Rush. The Chair thanks the ranking member.
    The Chair now recognizes the gentleman from Georgia, Mr. 
Barrow, for 5 minutes.

  OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Barrow. Thank you, Mr. Chairman. I want to thank you 
and the ranking member for your expeditious action on these 
three bills, and I have a special word on the subject of H.R. 
3526, the financial services consumer protection legislation, 
the spectacle of a Federal regulator that has the monopoly on 
regulatory authority basically objecting to the States as they 
move into the void created by the Feds doing nothing. 
Basically, you cannot regulate in this area. Only we can 
regulate in this area, and then not regulate in that area or 
protecting anybody brings to mind Aesop's fable of the dog in 
the manger. You know, he is the fellow who made his bed in the 
straw, and in the manger. He would snap and snarl at the 
animals that could eat the hay, but he could not eat it 
himself. But he was going to make sure nobody else could enjoy 
it though.
    Coming right from where I come from down in bird hunting 
country, it brings to mind a more homely metaphor. It is, you 
know, working with a Federal agency that does not know its 
authority, does not care about its authority, is not going to 
exercise its authority. It is a little bit like going bird 
hunting and having to tote the dog.
    Well, the object of this legislation about a couple of 
other Federal regulators with current responsibility to move, 
to get into the act and to see what they can do, I think, is a 
message to the Federal Reserve. The message is very simple: 
Lead, follow or get out of the way. We need some protection in 
this area, and if you are going to stop those who are trying to 
do the right thing by the consumers, we are going to try and 
open up the playing field to some folks who will.
    With that, I yield back the balance of my time, but I thank 
you for allowing us to move quickly on this legislation. I 
yield back.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Pitts, for 5 minutes.
    Mr. Pitts. Thank you, Mr. Chairman.
    I would just like to say thank you for holding this hearing 
on this important legislation to discuss these important 
issues.
    As a cosponsor of H.R. 2601, I strongly believe we must 
protect the privacy of our constituents, and I appreciate your 
urgency in addressing these issues.
    I yield back.
    Mr. Rush. The Chair thanks the gentleman.
    Now the Chair recognizes the gentlelady from Oregon, Ms. 
Hooley, for 5 minutes.

 OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Ms. Hooley. Thank you, Mr. Chairman, for holding this 
important hearing, and thank you, Ms. Parnes, for being here 
today and for providing your testimony.
    The Do-Not-Call program, Internet safety and giving select 
financial regulatory agencies rulemaking authority are three 
timely and important issues that I am glad we are taking up 
today.
    The National Do-Not-Call Registry has been very successful. 
The registry now includes over 145 million telephone numbers 
and has prevented unwanted telemarketing calls to the grateful 
millions who have signed up for it. Reauthorizing the Do-Not-
Call Implementation Act is the right thing to do and will 
ensure that millions of consumers who have signed up for the 
registry will remain protected from unwanted calls.
    Directing and funding the FTC to implement a national 
education campaign on Internet safety is also important. H.R. 
3461 will expand the scope in educating computer users of basic 
but important computer security. The FTC is currently working 
to educate consumers with their OnGuardOnline program, and this 
bill will help immensely in those efforts by giving them the 
additional funds they need.
    Lastly, expanding the number of bank regulatory agencies 
that may issue rules will strengthen Federal level consumer 
protections and enforcement. The two primary changes proposed 
in H.R. 3526 will strengthen Federal level consumer protections 
by allowing agencies to work together in developing meaningful 
strategies to improve consumer protections.
    I support these three bipartisan bills and look forward to 
their passage on the House floor.
    Thank you, Mr. Chairman.
    Mr. Rush. The Chair thanks the gentlelady.
    The Chair now recognizes the gentleman from Nebraska, Mr. 
Terry, for 5 minutes for an opening statement.

   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you, Mr. Chairman.
    I think this could, actually, be a more interesting 
discussion than some anticipate, especially on 3461 and 3526.
    In regard to the Do-Not-Call list, let me admit that I am 
one of the Do-Not-Call eight--those are the eight people who 
voted against this program in the first place--and I did so on 
philosophical grounds of creating a new Federal program where 
the market, through devices, was already blocking phone calls 
or, through caller ID, you have an option of not answering when 
it comes up ``out of area'' or ``private.'' I have an unlisted 
number, and I just dial star 82 before I call several of my 
friends so it will be unblocked and so they will know who is 
calling them. I still feel that way, but as my colleagues have 
all professed, rightfully so, it is now ingrained into the 
consumer's mind, and so the issue then is whether there are 
ways to improve the efficiencies of this program, and those are 
some of the issues I have dealt with, which is in the timing of 
the information and the costs of having to implement that.
    In Omaha, we are the telemarketing capital of the world. 
The shift has already occurred. The small mom and pop 
organizations just could not keep up, so the Wests, the Cytels, 
the biggies, that can keep up with the monthly requirements now 
have whatever outbound telemarketing is left, of which there is 
very little.
    So, in H.R. 3526, let me just say before I yield back that 
I respect and appreciate the arguments by my friends in 
criticizing the Feds for not implementing some consumer 
protections. Let me just say that, as I understand the Fed, the 
philosophy of the Fed under both Greenspan and Bernanke has 
been to not regulate financial institutions. They have had a 
hands-off philosophy, so there is a difference of opinion on 
the impact of regulations as opposed to just being remiss. 
Please keep in mind that the focus of the Fed is monetary 
policy, so maybe there should be a discussion of whether or not 
they should have the consumer protection rights. So I will 
stand up or at least defend those who I do not even know, but I 
do appreciate their less regulation stance in the past.
    With that, I yield back.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentleman from Texas, Mr. 
Burgess, for 5 minutes of opening statements.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman. I appreciate the 
consideration, and I want to thank you for bringing these bills 
to us today.
    We are here to discuss three important pieces of 
legislation that concern the Federal Trade Commission. I must 
admit that is not my favorite Federal agency, but I am glad to 
be here doing this today.
    Along with Chairman Dingell and Chairman Rush and Ranking 
Member Barton, I am an original cosponsor of the bill 
originally introduced by Ranking Member Stearns, H.R. 2601. 
This bill will extend the Federal Trade Commission's authority 
to collect fees and to administer and to enforce the Do-Not-
Call Registry. While I firmly believe in a free market society 
and that businesses should be able to formulate their own 
business practices and plans, I also firmly believe that 
Americans have a right to privacy.
    As Director Lydia Parnes so eloquently stated in her 
written testimony, the Do-Not-Call Registry helps to restore 
the sanctity of the American dinner hour. People should be able 
to have the option of whether or not they want to receive phone 
calls from telemarketers in the privacy of their own homes. I 
should know, parenthetically, that politicians are excluded, 
and thanks to the Do-Not-Call Registry, consumers can sign up 
and are afforded that decision. In fact, since the creation of 
the registry, 146 million telephone numbers have been 
registered. However, the authority for the Do-Not-Call Registry 
was only authorized for 5 years time; therefore, it is 
imperative that we act swiftly to pass this important 
legislation and to further extend the protection and privacy 
for Americans.
    Two other bills are before us today, H.R. 3526, a bill to 
include all banking agencies within the existing regulatory 
authority under the Federal Trade Commission Act with respect 
to depository institutions. In a time of widespread allegation 
regarding unfair and deceptive financial practices in the field 
of mortgage lending, I agree with some of my colleagues that 
banking agencies should have this authority, and I must admit 
that I was a little surprised to learn that they did not have 
this authority. I, actually, look forward to discussing that 
with Director Parnes today.
    While I do realize that the House Financial Services 
Committee has held hearings on this issue, I do support 
Chairman Rush's intent of holding a more extensive hearing on 
this matter in the near future.
    Finally, today we will be discussing H.R. 3461, the SAFER 
Net Act. Last year, on our Oversight Investigations 
Subcommittee. We had extensive investigation into one of the 
most disturbing topics, I think, I have ever encountered in my 
life--child exploitation over the Internet--and I will never 
forget the story of Masha Allen, who sat right here at our 
witness table. She was a brave, little girl who told about the 
evils and the exploitations encountered at both the hands of 
here adoptive father and the Internet. Her story was 
heartbreaking, and we must never let another child go through 
the same type of horror. It is crucial for the safety of our 
children for all of us to know about these evils so we can help 
end this abuse of a dangerous practice. Pedophiles are our 
enemy--they are our biggest enemy--but so also is lack of 
information, and I support the intent of this legislation.
    Mr. Chairman, I want to thank you for holding this hearing 
and for responding in such a bipartisan manner. This committee 
does do its best work when we function in a bipartisan manner. 
Last week and, really, in the last 2 weeks, we have seen 
Congress at its worst, and unfortunately, because of the 
political impasse we have been unable to pass sensible 
reauthorization of the State Children's Health Insurance 
Program.
    Mr. Chairman, this committee has some of the greatest 
intellectual firepower of any committee in the free world, and 
when we do not respect the committee process, when we take a 
bill through like we took the SCHIP bill through, that violates 
the whole sanctity of this committee. Mr. Chairman, I hope you 
will speak with your leadership and will let us get back to the 
table to renegotiate on the area of children's health insurance 
because it is too important a program to be left only to the 
political consideration.
    With that, Mr. Chairman, I will yield back the balance of 
my time.
    Mr. Rush. The Chair thanks the gentleman for his remarks.
    Now the Chair recognizes the gentlelady from Tennessee, 
Mrs. Blackburn, for 5 minutes of opening statements.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you, Mr. Chairman.
    I want to thank you for holding the hearing today and want 
to thank you for the bipartisan work that we have had on these 
bills.
    Ms. Parnes, I want to welcome you. I want to thank you for 
your very well-done and very well-presented testimony. We are 
looking forward to hearing from you after we return from votes, 
so we do welcome you.
    I am pleased that we are taking up the bills. I am 
particularly interested, Mr. Chairman, in the SAFER Act. I find 
this to be imperative, and for the sake of brevity, I am going 
to submit my full statement for the record. I do want to make a 
couple of comments primarily about the SAFER Act.
    We all know that there is a plethora of new technologies 
and new platforms that are available for our constituents and 
for their families, and we are familiar that many individuals 
who do not seek to do good are availing themselves of these 
platforms, and that is of concern to us for the sake of our 
children and for our families, and we have all seen the work on 
the fake check scam that is out there and the Web site that is 
now attached to that. We have heard about it.
    Mr. Chairman, I think I would like to submit this article 
for the record if I may. It is in today's Washington Post. It 
is about some of the Internet security ads that are being run.
    Ms. Parnes, I will talk with you as we get into Q&A about 
that.
    It is about some of the work that is there to help protect 
our families and our children, and I was particularly touched, 
and I think this is something that we have to pay very close 
attention to. People are very concerned about how to get this 
out of their homes and how to keep it from inside the four 
walls of their homes. Mr. Chairman, I do thank you for the work 
on this bill that will help address that. Ms. Parnes, I am 
looking forward to working with you more about that.
    I yield back the balance of my time.
    Mr. Rush. Does the gentlelady seek unanimous consent to 
enter her documents into the record?
    Mrs. Blackburn. Mr. Chairman, I do. I ask unanimous consent 
to enter into the record the Washington Post article today.
    Mr. Rush. Without objection, so ordered.
    Mr. Doyle. Mr. Chairman.
    Mr. Rush. The Chair understands that there is a vote going 
on on the floor. We have got 4 minutes before the vote is 
concluded. The Chair will recess the subcommittee, and we will 
return for the participation of Mr. Doyle, the full 
participation of Mr. Doyle, in these hearings.
    [Recess.]
    Mr. Rush. The hearing will come to order again. The Chair 
seeks unanimous consent at this moment to allow the gentleman 
from Pennsylvania, Mr. Doyle, to participate fully in this 
subcommittee's hearing.
    Without objection, the Chair now recognizes Mr. Doyle for 5 
minutes of opening statements.

   OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF PENNSYLVANIA

    Mr. Doyle. Yes. Mr. Chairman, thank you very much and thank 
you to Ranking Member Stearns for your unanimous consent. I 
really appreciate your letting me speak today. My friend and 
colleague, Mr. Chip Pickering, with whom I have introduced H.R. 
3541, I thought initially would be unable to join us. He is a 
member of the committee, and I do understand that he is finally 
on the ground and making his way over here. And hopefully he 
will be here in time to participate in the hearing and markup. 
But I appreciate your allowing me to ask a few questions and 
make a brief opening unanimous consent.
    Mr. Chairman, as you have said, the Do-Not-Call list is one 
of the most popular consumer protections ever created. It is so 
popular frankly because it works. It is easy to sign up your 
number and stop telemarketers from calling your home day and 
night. That is why after all the success of the program many of 
us in Congress were surprised to learn that the 132 million 
numbers on the list expire after 5 years and that the first 52 
million numbers will expire before September 30, 2008.
    Now, the people who own those numbers, Mr. Chairman, will 
first need to be aware that their numbers expire, and that is 
no easy task to notify these 52 million people, and then they 
have to resubmit their numbers.
    So picture millions of numbers expiring right around Labor 
Day next year, and that is not only the time the 2008 election 
will heat up, but it is also in the middle of the digital 
television transition. That will minimize the television time 
available to broadcast the message that consumers need to sign 
up again.
    Mr. Chairman, no matter how many articles are written and 
stories broadcast, I suspect that millions won't know that they 
need to act to stay on the Do-Not-Call list. That is why I am 
glad to be joined by my friend and colleague, Chip Pickering, 
and dozens of cosponsors on H.R. 3541, which will make the 
numbers on the Do-Not-Call list permanent.
    I have been working closely with committee staff on both 
sides of the aisle, as well as the FTC, and I am grateful for 
their hard work on seeing that this language is enacted at the 
end of the day.
    I am also proud to tell you that the bill has the complete 
support of the AARP, Consumers Union and Consumers Federation 
of America. I am hopeful that negotiations with other 
interested parties prove fruitful and the bill will move 
quickly.
    Mr. Chairman, once you go through that process of calling 
up or going on-line and putting your number on the Do-Not-Call 
list, saying I do not wish to hear from telemarketers, you 
shouldn't have to re-up every 5 years. I think once is plenty.
    I think this is a good improvement to the law. I thank you 
for letting me participate in this hearing and I yield back my 
time.
    Mr. Rush. The Chair thanks the gentleman from Pennsylvania.
    Other statements for the record will be accepted at this 
time.
    [The prepared statement of Mr. Butterfield follows:]

   Prepared Statement of Hon. G.K. Butterfield, a Representative in 
               Congress from the State of North Carolina

     Thank you Chairman Rush and Ranking Member Stearns for 
holding this important hearing on ``Enhancing FTC Consumer 
Protection in Financial Dealings with Telemarketers, and on the 
Internet.'' I commend this committee's leadership in assembling 
this timely hearing.
     I would like to welcome Lydia Parnes who serves as 
Director of the Bureau of Consumer Protection at the Federal 
Trade Commission. I look forward to her testimony and 
appreciate the work she and the Commission are doing in order 
to safeguard Americans from predatory consumer practices.
    The National Do Not Call registry has been widely 
successful and I was encouraged to learn that over 90 percent 
of American adults had heard of the registry and that over 75 
percent had signed up for the free service. I am also pleased 
to learn that the enforcement mechanism has not gone 
overlooked. I commend the Commission in initiating nearly 30 
cases where there have been near $9 million in damages awarded.
     The FTC has also stepped up efforts to educate Americans 
about online computer safety. They have established a Web site 
called onguardonline.gov which includes tips, articles, 
quizzes, and videos which aim to educate consumers about spam 
and scam practices. Over 4 million people have visited the Web 
site in the past 2 years. I thank Ms. Parnes and her staff as 
well as the FTC as a whole for the work they do for the 
betterment of all Americans.
     We will also have the opportunity to mark up three 
important legislative items which will expand the authority of 
the Federal Trade Commission. They seek to (1) protect 
consumers against unfair and deceptive financial practices, (2) 
continue to implement the National Do Not Call Registry, and 
(3) continue to educate Americans about the potential dangers 
online. I support the three bills we are considering today and 
look forward to this subcommittee discharging them favorably.
     Chairman Rush, I thank you for your work on this issue and 
look forward to working with you and the other members of the 
committee as these issues progress. I yield back the balance of 
my time.
                              ----------                              

    Mr. Rush. And now the Chair welcomes the witness for this 
hearing, Ms. Lydia Parnes, who is the Director of the Bureau of 
Consumer Protection for the U.S. Federal Trade Commission. Ms. 
Parnes will discuss ongoing efforts by the Federal Trade 
Commission under section 5 of the Federal Trade Commission Act 
and other applicable laws to protect consumers with reference 
to the three bills that we will consider today.
    Again, Ms. Parnes, we welcome you to this committee hearing 
and we recognize you now for 5 minutes of opening statements.

  STATEMENT OF LYDIA B. PARNES, DIRECTOR, BUREAU OF CONSUMER 
              PROTECTION, FEDERAL TRADE COMMISSION

    Ms. Parnes. Thank you, Chairman Rush and Ranking Member 
Stearns. I appreciate the opportunity to appear before you 
today to present the Commission's view on these three bills.
    As Congress considers legislation to reauthorize the Do-
Not-Call Registry and also to make consumers' Do-Not-Call 
registrations permanent, let me assure the subcommittee that 
the Commission's support for Do-Not-Call has not wavered one 
bit since 2002, when the Do-Not-Call list was first proposed. 
We will implement any legislative measures to strengthen 
consumers' Do-Not-Call rights with the same skill and 
dedication that have made Do-Not-Call such an unqualified 
success for the American public.
    The first bill I understand you are considering on the 
issue is H.R. 2601, which would reauthorize the Do-Not-Call 
Implementation Act of 2003. The FTC appreciates Ranking Member 
Stearns' and Chairman Rush's introduction of this bill. 
Reauthorizing the DNCIA demonstrates Congress' continued 
commitment to protecting consumers from unwanted intrusions 
into their homes.
    The Commissions does believe that the bill can be 
strengthened by statutorily setting the fees charged to 
telemarketers accessing the registry at an amount sufficient to 
enable the Commission to maintain the registry and enforce the 
telemarketing sales rules. A congressional amendment setting 
the fee would provide the Commission with a stable funding 
source for its telemarketing rule enforcement activities. A 
stable fee structure also would benefit telemarketers, sellers 
and service providers who access the registry.
    Congress also is considering H.R. 3541, which would make 
Do-Not-Call registration permanent. In the 2003 rulemaking that 
establishes the registry, the Commission believed that a 5-year 
re-registration mechanism, coupled with periodic purging was 
necessary to maintain the accuracy of the list. Since 2003, 
several changes have taken place, including the increased 
popularity of telephone number portability, more clarity in the 
legal landscape and an explosion of public support for the 
registry.
    As a result of these changes, the Commission now commits 
that it will not drop any telephone numbers from the registry 
based on the 5-year expiration period, pending final 
congressional or agency action on whether to make registration 
permanent. In any event, the Commission will continue its 
robust efforts to maintain the registry's accuracy and ensure 
the continued success of the Do-Not-Call program.
    The second bill on which the Commission is submitting its 
views is H.R. 3461, which would direct the Commission to 
implement a new national education campaign on Internet safety. 
As you know, the Commission has extensive expertise in 
educating consumers and businesses on a variety of issues, 
including Internet safety. We appreciate the sponsors of H.R. 
3461 who have the confidence in the FTC to entrust it with 
launching a new educational campaign and we support the 
legislation.
    Finally, H.R. 3526 would allow two additional banking 
agencies, the FDIC and the OCC, the power to issue rules under 
section 18 of the Federal Trade Commission Act with respect to 
the depository institutions they regulate. They would have this 
authority along with the existing authority that the Federal 
Reserve Board, the Office of Thrift Supervision, and the 
National Credit Union Administration have under section 18.
    The FTC supports amending section 18 in this manner, but 
recommends two modifications. First, these agencies should be 
required to consult with the Commission in any rulemaking they 
undertake under section 18 of the FTC Act, as the FTC is the 
expert agency responsible for ensuring appropriate and 
consistent interpretation of the Federal Trade Commission Act.
    Second, the FTC suggests that the bill be modified so that 
whenever the Federal banking agencies and the NCUA commence 
rulemaking under the FTC Act for the entities they regulate the 
Commission has the option to promulgate consistent and 
comparable rules for the entities it regulates.
    The bill also should state that in such rulemaking the FTC 
should be able to use the relatively streamlined and expedited 
notice and comment procedures of the APA that are used by the 
other agencies, rather than the more lengthy rulemaking 
procedures set forth in section 18 of the FTC Act.
    The Commission has proposed language that I have with me 
here that would make these changes, and we look forward to 
working with the subcommittee on this issue, as well as the 
other legislative initiatives being considered at this hearing.
    Thank you very much, and I would be pleased to answer any 
questions that you have.
    [The prepared statement of Ms. Parnes follows:]
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    Mr. Rush. The Chair thanks the witness and the Chair 
recognizes himself for 5 minutes of questioning.
    Ms. Parnes, the FTC has been very active in protecting 
consumers from unfair and deceptive acts and practices. In your 
opinion, what is the track record of the Federal Reserve Board 
and the other bank regulators in likewise protecting consumers?
    Ms. Parnes. Mr. Chairman, it is really very difficult for 
me to assess the track record of the bank regulatory agencies 
in this area. They are addressing issues that are very, very 
different from the kinds of institutions that the FTC deals 
with.
    As you know, the institutions that they regulate, they are 
dealing with both consumer issues and also safety and soundness 
issues, and I think it is just very hard for me to express a 
view on that.
    Mr. Rush. I can appreciate your remarks. Please provide 
details how the FTC's usual rulemaking procedures under section 
18 are more cumbersome than APA rulemaking procedures.
    Do I understand correctly that when the FTC coordinated 
with the banking agencies on the Gramm-Leach-Bliley rulemaking 
that it could do a more streamlined, APA-like rulemaking?
    Ms. Parnes. Yes, sir, in fact Congress has given the 
Commission authority under Gramm-Leach-Bliley, under the FACT 
Act, where we are working closely with the bank regulatory 
agencies. The telemarketing sales rule, we were given APA 
rulemaking authority. The CAN-SPAM Act. There are any number of 
areas where we have been given specific authority to use APA 
rulemaking. It is a much more expedited process.
    Magnuson Moss rulemaking, as it is called, under section 18 
has many, many more procedural hoops that the Commission needs 
to comply with.
    Mr. Rush. Ms. Parnes, your testimony as it relates to the 
Do-Not-Call Registry states that the DNC Registry contains 145 
million telephone numbers. Now what percentage of existing 
residential phone numbers in the U.S. is that, approximately 
what percentage?
    Ms. Parnes. I don't believe that we have that information. 
We simply take telephone numbers. We don't screen those 
numbers, so we just know how many telephone numbers are on the 
registry.
    Mr. Rush. Are you familiar with the Harris poll survey that 
shows widespread consumer satisfaction with the DNC Registry 
that dates back to January 2006; are you familiar with that?
    Ms. Parnes. We are extremely familiar with that survey and 
very proud.
    Mr. Rush. Very proud.
    Ms. Parnes. Of how successful the program has been.
    Mr. Rush. Does the FTC have any plans to update that survey 
in the future?
    Ms. Parnes. The Harris survey was not an FTC-initiated 
survey, it was a survey that Harris Interactive did on its own 
and at this moment we don't have plans to update the survey. We 
think right now there is widespread understanding of Do-Not-
Call and widespread consumer satisfaction. And really when you 
consider the number of consumers on the registry, there are 
comparatively very few complaints about the way in which it is 
working.
    Mr. Rush. We are up against a deadline in terms of the 
reauthorization of the DNC. Is it correct that the FTC's new 
position is that it will not drop any phone numbers at the end 
of the 5 years on the registry while you wait for Congress to 
act to make the registry permanent? At this point would you 
caution that consumers not be concerned or worried about re-
registering?
    Ms. Parnes. Absolutely, Mr. Chairman. The Commission will 
not drop any numbers off of the registry pending final action 
by Congress or by the agency itself on whether to make the 
registration permanent.
    Mr. Rush. Lastly, I have about 25 seconds remaining in my 
time, can you be more specific about the Internet safety 
programs that the Federal Trade Commission could launch with 
the added funds proposed by H.R. 3461?
    Ms. Parnes. Right now the Commission has several really 
excellent consumer education campaigns and business education 
campaigns as well on Internet issues. OnGuardOnline is the 
number of one of our key Internet safety programs.
    There are a couple of things that we would do if this bill 
is enacted. First of all, there are issues that you mentioned, 
child safety, exploiting children, child pornography that don't 
come within the FTC's jurisdiction and they are not issues that 
we necessarily have the best expertise on. And what we would do 
at the outset is reach out to the partners that we have already 
worked with to get the best information on our Web sites. That 
is No. 1.
    The second thing that we would do that we have had a lot of 
success with is creating what we call a tool kit. We have done 
this in the identity theft area where we are basically putting 
together a consumer or a business education campaign in a 
package. You can ask for this package if you are a member of a 
civic group, if you have a business, and you can put on your 
own consumer education program essentially. It has PowerPoint 
presentations, speech, consumer education material that can be 
distributed. So it is really a way of putting together a 
program and then pushing it out very effectively to what we 
hope are millions of consumers.
    Mr. Rush. My time is up.
    The Chair recognizes the gentleman from Florida, Mr. 
Stearns for 5 minutes.
    Mr. Stearns. Thank you, Mr. Chairman.
    Ms. Parnes, I never got a solicitation over my cell phone. 
Is it illegal to solicit over the cell phone?
    Ms. Parnes. It is----
    Mr. Stearns. Just yes or no.
    Ms. Parnes. Oh, that is so hard.
    Mr. Stearns. Is it yes or no?
    Ms. Parnes. It is not illegal specifically to solicit over 
the cell phone, but it is illegal to use a predictive dialer.
    Mr. Stearns. Computerized?
    Ms. Parnes. Yes.
    Mr. Stearns. I think the FTC advertises that you can put 
your cell phone in the list.
    Ms. Parnes. No, we don't. We say that you don't have to 
because you are not likely to get telemarketing calls, but that 
you can put your cell phone number on the registry.
    Mr. Stearns. So you tell them they can if they want, but 
cell phones generally, if you do it through a computerized 
telemarketing, it is illegal.
    Ms. Parnes. Under a FCC rule.
    Mr. Stearns. Does the FCC check the Do-Not-Call Registry 
for invalid numbers on a regular basis?
    Ms. Parnes. We purge the registry on a monthly basis, a 
contractor that we work with----
    Mr. Stearns. A subcontractor goes out and you say run this 
against a database and see if there are invalid numbers. How 
about you check numbers reassigned, you have Joe Smith and 
suddenly you find out it is not Joe Smith anymore, it is John 
Doe?
    Ms. Parnes. We purge numbers that have been disconnected 
and reassigned. Our contractor gets this information from what 
they tell us are all of the Local Exchange Carriers throughout 
the country, and when numbers are disconnected and then 
reassigned they are purged from the registry.
    Mr. Stearns. Mr. Doyle has talked about his bill. The 
question I have is if you have to keep these numbers 
indefinitely, over a period of years, is it possible that 
almost every phone number 20 years, 30 years, every phone 
number will be in there? Well, let me ask you how you feel 
about that, that when John Doe puts his number in it remains 
permanently, in perpetuity, how do you feel about that?
    Ms. Parnes. Well, the accuracy of the registry is something 
that has been key for the Commission since it enacted the 
registry. The 5-year re-registration requirement, as I 
mentioned, along with purging were the two mechanisms that the 
Commission relied on to ensure accuracy. And we will be 
vigilant working with our contractor to make sure that 
disconnected and----
    Mr. Stearns. Do you think you need legislation? Do you 
think you need a stipulation that John Doe, once he registers 
with you, remains there in definitely, forever?
    Ms. Parnes. Well, I think that we would need either 
legislation or some agency act----
    Mr. Stearns. Do you think it is a good idea?
    Ms. Parnes. Registry permanent?
    Mr. Stearns. As it stands now it is every 5 years?
    Ms. Parnes. Every 5 years.
    Mr. Stearns. So every 5 years you would notify John Doe or 
John Doe's number would be gone and he or she would have to 
reenter it, right.
    Ms. Parnes. We don't notify John Doe specifically. What we 
would do more generally is tell the public that the 5-year re-
registration----
    Mr. Stearns. But John Doe and his family don't keep track, 
they don't know. The first time they would know is if after 5 
years they would start to get solicited calls and they would 
call you again. But I am just trying to see, wouldn't this be a 
pretty big database after 20 years if all the numbers are just 
kept there? Is there another way to do this other than making a 
permanent John Doe forever?
    Ms. Parnes. Well, I think that--kind of three things. 
First, John Doe can always unregister his telephone number.
    Mr. Stearns. But he's not going to do that probably, OK.
    Ms. Parnes. The second thing is that the list is pretty big 
now.
    Mr. Stearns. It is 145 million.
    Ms. Parnes. That is right. I don't know that we expected 
that when we first rolled this out.
    Mr. Stearns. No, no.
    Ms. Parnes. We will work to make this manageable and 
continue to purge the list.
    The third thing is we will be happy to work with the 
subcommittee to address any concerns about accuracy.
    Mr. Stearns. So do you think it is necessary or wise to 
pass legislation that John Doe's name be put in there in 
perpetuity, forever? Just yes or no, I need your opinion.
    Ms. Parnes. Well, I think that I absolutely understand----
    Mr. Stearns. I know you understand, but can you make a 
position on this, because we are going to probably mark this 
bill up in 2 days. The amendment sounds good. And my question 
is, is there another way do it through this cross-check that 
you mentioned earlier through the subcontractors? You run the 
databases to check Do-Not-Call for invalid numbers, one, and, 
two, people who have been reassigned--is that enough so that if 
John Doe puts his name in there forever you just leave it 
there? Here is your chance to tell us what you think.
    Ms. Parnes. I think that it will be enough and I think that 
we will continue. None of this is static. The technology is 
constantly changing concerning the phones and I think we will 
keep on top of this.
    Mr. Stearns. I am taking your opinion to say you support 
keeping it in there forever.
    Ms. Parnes. Yes. What I think I see the legislation doing 
is making registration permanent, but still giving consumers 
choice.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Rush. The Chair now recognizes the gentlelady from 
Illinois, Ms. Schakowsky, for 5 minutes.
    Ms. Schakowsky. Thank you, Ms. Parnes. Your testimony said 
that the FTC has been very active in protecting consumers in 
the financial services marketplace and that 21 actions against 
bad actors were taken in the past decade; is that right?
    Ms. Parnes. Yes.
    Ms. Schakowsky. So that is about two a year. And so if that 
is active, do you feel that is sufficiently active?
    Ms. Parnes. The context that I would put this in, while 
this is a very high priority for the FTC, these are actions 
that--it is a part of what we do in the consumer protection 
area.
    Ms. Schakowsky. In the financial services marketplace, 
because that is what you are referring to that you have been 
active there.
    Ms. Parnes. Well, right. I do think that we have been 
active in that area. I think that we have done, in financial 
services generally--I believe we have brought more, that 
doesn't include, for example, debt collection cases that we 
have brought, it doesn't include cases involving credit cards 
that are marketed to consumers, advance fee loan credit cards. 
I think it is focusing on a very specific segment in the 
financial sector.
    Ms. Schakowsky. What resources do you need that you don't 
currently have to do it and then even more?
    Ms. Parnes. Well, I am really not prepared to talk about 
what resources, additional resources that we need in this area. 
I would say that we are pretty flexible in terms of the Bureau 
of Consumer Protection and we are adding resources to our 
financial practices division on a regular basis, because it is 
an important area for us.
    Ms. Schakowsky. Thank you. I yield back.
    Mr. Rush. The Chair thanks the gentlelady.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Pitts, for 5 minutes.
    Mr. Pitts. Thank you, Mr. Chairman.
    Ms. Parnes, are cell phone numbers included in the 
registry?
    Ms. Parnes. Cell phone numbers can be registered, yes, they 
can, although under FCC rules you can't use the typical 
computer technology. Telemarketers are prohibited from using 
that technology to call cell phones.
    Mr. Pitts. So there are other laws that govern 
telemarketing practices with regard to cell phone numbers?
    Ms. Parnes. That is correct.
    Mr. Pitts. Of the 145 million numbers in the registry, how 
many are cell phone numbers?
    Ms. Parnes. We do not know. We don't ask consumers who are 
registering to indicate whether it is a cell phone or a land 
line.
    Mr. Pitts. Does the FTC advertise on their Web site that 
consumers can register their cell phone number?
    Ms. Parnes. We don't, we simply say you can register a 
telephone number on the registry.
    Mr. Pitts. With cell phones replacing land lines more and 
more, are you seeing a decline in the percentage of the land 
lines registered? Will the registry be necessary in 20 years?
    Ms. Parnes. We actually don't have information on whether 
the numbers that are registered are cell phone lines or land 
lines so we really can't make that judgment about whether the 
percentage of land lines are going down and the percentage of 
cell phones is going up.
    Mr. Pitts. Do you keep any type of database specifically 
for cell phones?
    Ms. Parnes. We do not. We have the Do-Not-Call Registry and 
we only keep telephone numbers that are registered. We don't 
separate it out by cell phone or landline.
    Mr. Pitts. So you don't take any steps to remove cell phone 
numbers from the registry?
    Ms. Parnes. No, we do not.
    Mr. Pitts. Should the Commission do that?
    Ms. Parnes. I am actually not certain about that. Initially 
when consumers were told kind of periodically there will be 
maybe something that goes around on-line or people hear that 
some cell phone registry will be published and telemarketers 
will get cell phones and they will be able to call their cell 
phones. We typically respond by issuing some kind of consumer 
education release assuring them that that will not happen, but 
that if they are concerned they can register their cell phones.
    So that while I believe that now consumers have nothing to 
be concerned about with respect to cell phones, I would hate to 
drop cell phones from our registry and then find that 
telemarketers have developed some way of reaching these numbers 
through some other system that is permitted. I just think that 
we need to know more about how cell phones may be reached.
    Mr. Pitts. The FTC is currently not obligated by law to 
purge disconnected or invalid numbers from the database; is 
that correct?
    Do you believe that the law should mandate this? If so, why 
or why not?
    Ms. Parnes. We are not currently required to do so. We do 
it. I don't think that we would object to a requirement that we 
purge numbers, but we are certainly committed to purging 
numbers. Our contract that we just entered into, a 5-year 
contract, calls for monthly purging of the registry.
    Mr. Pitts. So you believe the law should mandate that?
    Ms. Parnes. I think it could. I don't necessarily think 
that it has to, but I don't see that we would object to that.
    Mr. Pitts. Thank you, Mr. Chairman.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentlelady from Oregon, Ms. 
Hooley, for 5 minutes of questioning.
    Ms. Hooley. Thank you, Mr. Chairman.
    Ms. Parnes, how frequently does the FTC currently scrub or 
check for accuracy in the numbers on the Do-Not-Call Registry?
    Ms. Parnes. We do it on a monthly basis.
    Ms. Hooley. How accurate would you say the registry is?
    Ms. Parnes. We understand that we use the best contractor 
in the country to do purging. So we think it is probably as 
accurate as it can be.
    Ms. Hooley. And you have to renew every 5 years?
    Ms. Parnes. As the law stands right now, you do have to 
renew every 5 years, but the Commission today is stating that 
it will not drop any individual off the registry pending a 
final congressional or agency decision on whether to make the 
registry permanent.
    Ms. Hooley. Because I think a lot of people when they sign 
up don't realize that they have to renew and my next question 
was going to be, how do you let people know that they have to 
renew if in fact you don't do something different with the 
rules where they can stay on the registry?
    Ms. Parnes. I think if no change were made we would do a 
very aggressive consumer education campaign. As it stands right 
now, we will put something on our Web site just telling 
consumers not to worry about this, that no number will be taken 
off the registry.
    Ms. Hooley. On the Internet safety question, what 
department in the FTC will be spending authorized funds?
    Ms. Parnes. It will be a division within the Bureau of 
Consumer Protection.
    Ms. Hooley. What is their current annual budget and how 
many employees do they have currently?
    Ms. Parnes. Our Division of Consumer and Business Education 
has about somewhere between 16 and 18 employees. And I do not 
know the budget numbers specifically. We would have to get you 
that.
    Ms. Hooley. And in this process where they are trying to 
educate people, how are they intending to spend the money?
    Ms. Parnes. Well, I would say that the people in our 
Division of Consumer and Business Education are among the most 
creative people around. We spend the money in a variety of 
ways. We spend a lot of it simply on printing material that 
gets out to civic organizations, and senior organizations. We 
do a tremendous amount of outreach and partnering with consumer 
advocates, with businesses.
    Ms. Hooley. So you try to go through organizations mostly 
of some sort?
    Ms. Parnes. Absolutely, we do a lot of partnering.
    Ms. Hooley. Do you have any idea how effective your efforts 
are in educating consumers? Are we really reaching the numbers 
that we need to reach and are we being effective?
    Ms. Parnes. I think that the consumer and business 
education material that we put out is praised very highly. It 
is award winning material.
    Does it reach every consumer? Absolutely not. We really do 
our best to try and push it out whenever we can. But I think 
that consumer and business education certainly is not, even on 
consumer issues, it is not the sole property of the Federal 
Trade Commission. We encourage others to take this information 
and use it as their own. We work very closely with States, for 
example, on doing consumer education on a more retail level.
    Ms. Hooley. OK. If I wanted to send something out to the 
people in my district, do you have a perfect piece of 
information to send out?
    Ms. Parnes. Well, we actually work very closely with 
Members of Congress as well linking to our Web sites. So I 
think we would have good information for you to send out to 
your constituents, absolutely.
    Ms. Hooley. Thank you. I have no more questions.
    Mr. Rush. The Chair recognizes the gentleman from Nebraska, 
Mr. Terry, for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman.
    Ms. Parnes, are you aware whether the FCC has programs that 
educates the constituents and folks and businesses on threats 
to juveniles, cyber predators and materials that are 
inappropriate for minors?
    Ms. Parnes. We do not. These are issues that fall outside 
of the FTC's jurisdiction.
    Mr. Terry. The question was FCC. Are you aware whether they 
have programs, FCC?
    Ms. Parnes. The FCC?
    Mr. Terry. I know it is outside of your jurisdiction.
    Ms. Parnes. Right. I don't know. We can certainly get that 
information.
    Mr. Terry. I do know they do. And so my follow-up question 
of whether you know how duplicative the suggested programs 
would be is meaningless. So I will go on.
    The gentlelady from Oregon asked a good question about the 
FTC's current program of being effective. I am not sure you 
answered that directly, but obviously the authors of this bill 
is assuming that you have not been effective and need further 
guidance as well as more money. Do you agree with that 
assumption?
    Ms. Parnes. I think we have been effective in this area and 
I would like to think that the authors are looking to us 
because they think that we would use this money wisely and 
effectively.
    Mr. Terry. I missed the answer to the gentlelady from 
Oregon's question about how much does the FTC spends on 
communicating to people right now.
    Ms. Parnes. I don't know the exact number. We would have to 
get that for the subcommittee.
    Mr. Terry. Do you have any clue, is it $10 million like 
this bill authorizes? Do you already spend that much money?
    Ms. Parnes. I just hesitate to guess at the number.
    Mr. Terry. Would you identify within the FTC the group who 
would be in charge of identifying, promoting and encouraging 
best practices for Internet safety?
    Ms. Parnes. It would be a division within the Bureau of 
Consumer Protection.
    Mr. Terry. Best practices is something that you already do?
    Ms. Parnes. Yes, we do, in terms of Internet security.
    Mr. Terry. What is the already established best practice 
for encouraging, for identifying best practices for Internet 
safety? Would you run those down for me?
    Ms. Parnes. Well, I cannot run down all of the best 
practices. We have a Web site that deals--it is called 
onguardonline.gov and it has just dozens and dozens of tips for 
consumers and business on Internet security.
    Mr. Terry. OK, very good.
    Mr. Rush. Would you please submit that list for the record, 
please?
    Ms. Parnes. Absolutely.
    Mr. Terry. You are already able to carry out a national 
outreach and education campaign using various media and 
Internet, you already do that?
    Ms. Parnes. We do it on the Internet and we work very 
closely with partners in other Federal agencies, industry 
members, State and local governments.
    Mr. Terry. All right. I want to go back to jurisdiction 
then. Does the FTC have current jurisdiction to establish best 
practices for Internet safety for cyber predators? In regard to 
cyber predators, that is something that already exists in your 
jurisdiction?
    Ms. Parnes. No. As we were discussing, it is outside of the 
FTC's jurisdiction. And if we were charged with doing a 
consumer education campaign in this area, we would certainly 
look to our partners who have the expertise in this area, the 
FBI being one of them.
    Mr. Terry. All right. So since it is not in your 
jurisdiction today, you don't have best practices established 
regarding safety from cyber predators?
    Ms. Parnes. That is correct.
    Mr. Terry. I was confused on the extent of the established 
programs.
    How about determining material that is inappropriate for 
minors; is that already established within your jurisdiction?
    Ms. Parnes. No, our----
    Mr. Terry. I am over my time, appreciate your answer, and I 
am not sure I am comfortable with expanding the FTC's 
jurisdiction here, especially when the FCC already has 
jurisdiction over these matters.
    Mr. Rush. The gentleman's time is up.
    The Chair recognizes the gentleman from Georgia, Mr. 
Barrow, for 5 minutes.
    Mr. Barrow. No questions.
    Mr. Rush. The Chair now recognizes the gentleman from 
Texas, Mr. Burgess, for 5 minutes.
    Mr. Burgess. I thank the chairman and thank you for being 
here today. We are reauthorizing this bill that was previously 
authorized for 5 years. What would be the effect of just 
indefinitely reauthorizing this program and not revisiting it 
from time to time? Is there value in revisiting from time to 
time?
    Ms. Parnes. Well, it is my understanding that most 
reauthorization is time limited and certainly if Congress 
wanted to do a permanent reauthorization, I don't think the FTC 
would have an objection.
    Mr. Burgess. We were talking an awful lot about cell phones 
a moment ago. I guess I didn't really understand. What 
prohibits a computer from calling cell phones? Is it technology 
or is there actually a FCC violation involved there?
    Ms. Parnes. The FCC has a rule that says that you can't use 
the computerized technology, predictive dialers, automated 
dialers to call cell phones. And since predictive dialers, 
automated dialers are the standards in the telemarketing 
industry for placing calls, in effect it is prohibiting those 
calls to cell phones.
    Mr. Burgess. I will tell you it doesn't happen with every 
carrier I have used, but I have received telemarketing calls on 
my cell phone as well as telemarketing text messages just like 
you receive spam on your computer. I guess the system is not 
perfect, but I did not ever register that number on the Do-Not-
Call list.
    What about the newer stuff? I even forget what the 
technology is called, but Vonage where you use your computer as 
your telephone.
    Ms. Parnes. The Voice over Internet Protocol?
    Mr. Burgess. That is it.
    Ms. Parnes. I believe that that would not be covered by the 
registry.
    Mr. Burgess. It would not be covered by the registry; it 
would be bound by the same rules that the FCC has for cell 
phones?
    Ms. Parnes. I am not certain. I think that this truly is a 
different technology. Certainly from the FTC's perspective it 
wasn't something envisioned when the registry was adopted.
    Mr. Burgess. So in actuality the Voice over Internet 
Protocol could be under the radar screen as far as the Do-Not-
Call list is concerned and those families would not be 
protected under the Do-Not-Call?
    Ms. Parnes. It could be, it could be. I think we certainly 
haven't gotten complaints yet from users of VoIP about 
telemarketing calls.
    Mr. Burgess. What would happen if someone tried to put 
their number on a Do-Not-Call list who used Voice over Internet 
Protocol?
    Ms. Parnes. We don't screen any telephone numbers, if you 
want to register a number with us, you can.
    Mr. Burgess. I think the question was asked a minute ago 
about enforcement. What is the enforcement if someone violates 
the Do-Not-Call list?
    Ms. Parnes. We have a very aggressive enforcement program. 
The details of it are in the Commission's full testimony, but, 
for example, since the Do-Not-Call Registry was passed I 
believe we brought over 27 or 28 cases that would be since 
2003, cases that include Do-Not-Call violations. Our highest 
civil penalty has been over $5.3 million against DirecTV for 
violating the Do-Not-Call rule.
    Mr. Burgess. Oh, they were the ones that called me on my 
cell phone.
    Ms. Parnes. Oops.
    Mr. Burgess. What do you do if a company has outsourced its 
telemarketing to Bombay or Shanghai?
    Ms. Parnes. Our position is that the company in the U.S., 
the seller, is responsible regardless of where the 
telemarketing calls are coming from.
    Mr. Burgess. But if it was a true overseas or multinational 
corporation, they may be outside the reaching grasp of the 
Commission?
    Ms. Parnes. I don't know that we have ever had that 
question posed to us.
    Mr. Burgess. Well, what would happen?
    Ms. Parnes. I would imagine----
    Mr. Burgess. Well, you know, down in Texas we used to have 
radios that violated--the FCC would broadcast these mega 
stations across the border at night. What would you do if you 
had a corporation that set up shop specifically to market to 
Do-Not-Call numbers and was exclusively overseas?
    Ms. Parnes. If we weren't applying the Do-Not-Call 
Registry, and we might because these are calls made to U.S. 
Consumers. So I think we would need to certainly research this 
and I would be happy to get back to you. But if we couldn't 
reach that seller, we would certainly rely on new authority 
that Congress gave us under the U.S. SAFE Web Act to work with 
colleagues in other countries to try and address that issue.
    Mr. Burgess. Mr. Terry asked the question about funding on 
the SAFE Internet Act. Could you provide the committee at some 
later date, perhaps, Mr. Chairman, before we go to full 
committee markup on this bill exactly how the allocations there 
run, what amount of money you are spending now on these types 
of programs, how is a $5 million or $10 million authorization 
going to change things for you, will we simply be moving 
dollars around in your baseline budget, are we identifying real 
dollars going into real work, which is the intent, the 
congressional intent, of the bill?
    I yield back, Mr. Chairman.
    Ms. Parnes. Absolutely, absolutely.
    Mr. Rush. The Chair recognizes the gentlelady from 
Tennessee for 5 minutes.
    Mrs. Blackburn. Thank you.
    Ms. Parnes, on the Do-Not-Call Registry Mr. Burgess 
mentioned to you the VoIP, Voice over Internet Protocol. One of 
the things we talked about many times in the Telecom 
Subcommittee is looking at end use. And as we look at expanded 
platforms and look at new uses, new technologies and as more of 
our constituents move to VoIP, I would highlight with you that 
there may be a need for you all to consider that and to focus 
more on the end use and less on a specific technology.
    To the Internet SAFER bill and Internet safety, how many 
individuals and how much of your budget is spent on chasing 
down these scams; do you know? How many people do you have that 
are investigators?
    Ms. Parnes. How many resources do we devote towards 
Internet scams?
    Mrs. Blackburn. Right.
    Ms. Parnes. A considerable amount.
    Mrs. Blackburn. Can you give me a number of people or the 
amount of your budget dollar-wise what you are spending?
    Ms. Parnes. I would need to get back to you on that.
    Mrs. Blackburn. That is fine, I think that that would be 
helpful as we look at legislation that would change the funding 
mechanism. Many of us, we hear about this especially from our 
moms and teachers, and those that are working with young 
people, and those that are working with families, many times 
about the intrusion of Internet scams into the homes, into 
family lives, et cetera. So I would really like an answer if 
you could help provide us with that.
    Just a couple of quick points. In your testimony on page 13 
you talk about the organizations that you all work with 
onguardonline.gov. And the FCC is not listed as one of these. 
As we look at the Internet and as we look at some of the scams 
that are coming in there and they already have some items that 
are in place and as you all look at working on the best 
practices, which you do not have available for us, I would 
recommend some shared resources or shared information.
    Ms. Parnes. To the extent, yes, we can absolutely do that 
and certainly to the extent that we have overlapped with the 
FCC we do work closely with them.
    Mrs. Blackburn. OK. That is great.
    And then just for clarification for me, you said that your 
national education campaign as is designated in the legislation 
would be done by the Consumer Protection Division; is that 
correct?
    Ms. Parnes. It would be a division within the Bureau of 
Consumer Protection.
    Mrs. Blackburn. I think that is all that I have at this 
point.
    Mr. Burgess. Will the gentlelady yield?
    Mrs. Blackburn. I will be happy to yield to the gentleman.
    Mr. Burgess. I just had a general knowledge question, I 
think is probably something I should know but I don't. How come 
we are exempt from this? How come political calls, robo-calls, 
do not fall under the Do-Not-Call jurisdiction?
    Ms. Parnes. Well, the Do-Not-Call list applies to 
telemarketing. It was a provision in the Telemarketing Sales 
Act and it applies only to telemarketing, which is a call that 
is made to induce the purchase of a product or service.
    Mr. Burgess. Do you ever get complaints from consumers who 
receive robo-calls and political calls and have to explain that 
to them because I get it when I go to Town Halls, and they say 
how come you call me and I was on a Do-Not-Call list?
    Ms. Parnes. I don't know that calls come to us complaining 
about political calls.
    Mr. Burgess. Do you make it apparent in the literature that 
you provide instructional material? As you said, you have some 
good materials available. Do you provide that material that 
this will not stop MoveOn.org from calling you nightly?
    Ms. Parnes. We don't say what it won't do, we say what it 
will do. We explain that it will stop telemarketing calls, it 
will stop calls that are selling you something.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Rush. The Chair now recognizes the gentleman from 
Mississippi, Mr. Pickering, for 5 minutes.
    Mr. Pickering. Thank you, Mr. Chairman. I thank you for 
having this hearing. This is one of the most successful pieces 
of legislation that we have done since I have been here. It is 
very popular, as indicated by 146 million people, I believe, 
that have signed up for the Do-Not-Call Registry.
    I want to thank Congressman Stearns for his work and 
leadership on the legislation that we are having a hearing on, 
and I especially want to thank my friend and colleague from 
Pennsylvania, Mr. Doyle, for his good work and allowing me to 
join him on a simple straightforward shot to extend and end a 
5-year expiration date that is before us.
    That was not in the original legislation, but I believe it 
was adopted by regulation and we do not want to have all the 
disruption of having that expire without prior warning and 
prior information to individuals that they would have to re-up 
and extend their Do-Not-Call status.
    My question to you is, if that were to occur, if we were 
not to move quickly on legislation, what does the FTC have in 
place to notify individuals that the Do-Not-Call regulation is 
expiring and their status as far as being on a list that would 
no longer protect them from calls?
    Ms. Parnes. Well, as of today the Commission has said that 
it will not take any number off the list pending final 
congressional or agency action on whether to make the registry 
permanent.
    Mr. Pickering. Currently as I understand it, you all clean 
or scrub lists and update approximately every 30 days; is that 
correct?
    Ms. Parnes. Yes, we do.
    Mr. Pickering. Is there a way you can do that more quickly?
    Ms. Parnes. We could. We could do it on a basis that is 
more regular than 30 days. Scrubbing the list more frequently 
would cost more money. So that is really the only factor that 
we would need to weigh.
    Mr. Pickering. What would increase the cost, additional 
staff or resources?
    Ms. Parnes. We use a contractor to scrub the lists. So we 
would need to go back to the contractor and find out how much 
more it would cost. I am certain it would depend on how 
frequently the scrubbing was done.
    Mr. Pickering. If you were to do it every 15 days, would 
that create a significant cost increase?
    Ms. Parnes. We would need to talk to the contractor about 
what the cost increase would be.
    Mr. Pickering. OK. If we were to address this issue of more 
regular cleaning or scrubbing or other proper term, would you 
advocate us simply working with you to find the appropriate 
timetable of being able to do that?
    Ms. Parnes. Absolutely, absolutely. We can get information 
from the contractor and work with the subcommittee staff so 
that everybody has all of the information in terms of cost and 
frequency and can make the best decision.
    Mr. Rush. Would the gentleman yield for a moment?
    Would you get us a copy of the estimate from the contractor 
to the committee, please?
    Ms. Parnes. Absolutely, Mr. Chairman, yes.
    Mr. Rush. OK.
    Mr. Pickering. Mr. Chairman, I have no further questions 
other than to say I look forward to working with you and Mr. 
Doyle and Mr. Stearns so that as we move through the 
subcommittee to the full committee that we find the right 
vehicle to move it as quickly as possible.
    Mr. Rush. The Chair thanks the gentleman. The Chair now 
recognizes the gentleman from Pennsylvania for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman.
    Ms. Parnes, first of all, I want to praise you for 
committing not to purge numbers from the Do-Not-Call list 
pending congressional action. That is a really smart consumer 
friendly move, and I am glad you are doing it.
    When I first introduced the Do-Not-Call List Improvement 
Act with my good friend Chip Pickering, we heard some concern 
from people and I think the ranking member expressed the same 
concern that this list would become something like the Do-Not-
Call roach motel. Numbers go in, but they don't come out.
    And I think it is important that we clear the record on 
this. The only numbers that would stay there permanently are 
those numbers of individuals who, A, it is their telephone 
number and, B, they want to be there permanently. Numbers that 
are no longer John Doe's number will be scrubbed from the list. 
And any number that isn't currently somebody's telephone 
number, and if somebody wants to go back on the list because 
they want to start getting telemarketing calls at dinner time, 
they just have to call the Do-Not-Call Registry and say, we 
want to take our number from the list. So it will not be an 
accumulation of a bunch of numbers that are not valid numbers 
anymore, because you have a contractor scrubbing those lists.
    Is that correct?
    Ms. Parnes. Yes, it is. The only caveat that I would add is 
that the agreement that we have with our contractor calls for 
scrubbing telephone numbers that have been disconnected and 
reassigned, and we have taken a very cautious approach there. 
Not simply saying scrub numbers that have been disconnected, 
because sometimes numbers are disconnected when consumers, for 
example, go on vacation for a month. They may disconnect their 
number, or if they have been delinquent in a bill, their number 
may be recorded by the LEC as disconnected. And we didn't want 
consumers to drop off the registry in those circumstances.
    Mr. Doyle. Right. That is the only one contention here, 
that the list isn't scrubbed until the number is reassigned so 
you have a bunch of numbers that sit on that list that have 
maybe been abandoned or maybe some of the instances that you 
just suggested, and those numbers aren't purged until they are 
reassigned to somebody else; is that correct?
    Ms. Parnes. That is correct.
    Mr. Doyle. I think that is something maybe we can look at 
or maybe the Commission can look at. We are not trying to 
create a situation where telemarketers don't have access to 
numbers that don't want to be on the list. But I think it is 
very important that once you go through the process of going 
on-line or picking up a phone and saying, you know, I don't 
want to get these calls in my home, that that should be 
respected.
    Let me ask you about the cell phones. It is against the law 
for telemarketers to use auto dialers to call cell phones. What 
you were saying is in a practical sense most people won't get 
telemarketing calls on their cell phones because the 
telemarketers all use auto dialing technology. So it is not 
absolutely necessary, but technically a telemarketer could call 
a cell phone if they are not using that technology; is that 
correct?
    Ms. Parnes. That is exactly right.
    Mr. Doyle. And so people can register their cell phones on 
the Do-Not-Call list?
    Ms. Parnes. Yes, they can.
    Mr. Doyle. I think Mr. Pitts brought up an interesting 
point that more and more people are using cell phones 
exclusively, especially younger people. I have four children 
and none of them have land lines in their homes. They just have 
cell phones. So we encourage people to register their cell 
phones as well as their land lines on the Do-Not-Call list 
because, like you said, there may be something else come down 
the line that we don't foresee right now and telemarketers 
might be able to access those calls.
    Just for the record, Mr. Chairman, this is not a list that 
will grow simply because someone puts their number on the list. 
The monthly purging of numbers will take care of any John Does 
that no longer have that number. They will come off the list. 
If not, they will not be on there permanently if our amendment 
is adopted, because that is what the scrubbing is about each 
month and there seems to be a willingness on the part of the 
Commission to work with the contractor to maybe even scrub that 
list more frequently, if the costs allow it, more than 30 days. 
So we are keeping a list that is current and numbers that are 
no longer people's numbers are being taken off that list, and 
so it won't grow into millions. But the people who don't want 
to get these calls, I think once they do that, that should be 
respected and that is why we introduced the legislation and I 
just want to get those points on the record.
    Ms. Parnes, I thank you for your consumer friendly move on 
behalf of the people to keep that intact until we act one way 
or the other.
    Thank you, Mr. Chairman. Thank you for your courtesy and, 
Ranking Member Stearns, thank you for your courtesy also.
    I yield back.
    Mr. Rush. The Chair thanks the gentleman. This concludes 
the hearing for this morning and the Chair will recess now for 
10 minutes and we will reconvene at 12:15 for the markup. The 
subcommittee's hearing is adjourned.
    [Whereupon, at 12:05 p.m., the subcommittee was adjourned.]

                                 
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