[Federal Register Volume 64, Number 226 (Wednesday, November 24, 1999)]
[Proposed Rules]
[Pages 66124-66126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30700]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Part 310


``Do-Not Call ``Provisions of Telemarketing Sales Rule; Meeting

AGENCY: Federal Trade Commission.

ACTION: Announcement of public forum on the ``Do-Not-Call'' provision 
of the telemarketing sales rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission plans to hold a public

[[Page 66125]]

forum on January 11, 2000, to discuss issues relating to the ``do-not-
call'' provision of the Telemarketing Sales Rule, 16 CFR Part 310.

DATES: The public forum will be held on January 11, 2000, in 
Washington, DC, from 8:30 a.m. until 5:30 p.m. Notification of interest 
in participating in the forum must be submitted on or before December 
10, 1999.

ADDRESSES: Notification of interest in participating in the public 
forum should be submitted in writing to Carole I. Danielson, Division 
of Marketing Practices, Federal Trade Commission, 600 Pennsylvania 
Avenue, NW, Room 238, Washington, DC 20580. The public forum will be 
held at the Federal Trade Commission, 600 Pennsylvania Avenue, NW, Room 
432, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Catherine C. Harrington-McBride (202) 
326-2452 (email [email protected]), Karen Leonard (202) 326-3597, (email 
[email protected]), or Carole I. Danielson (202) 326-3115 (email 
[email protected]), Division of Marketing Practices, Bureau of 
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, 
NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: 

Section A. Background

    On August 16, 1994, President Clinton signed into law the 
Telemarketing and Consumer Fraud and Abuse Prevention Act 
(``Telemarketing Act'' or ``the Act''),1 which directed the 
Commission to prescribe rules prohibiting deceptive and abusive 
telemarketing acts or practices. In response to this Congressional 
directive, the Commission promulgated its Telemarketing Sales Rule 
(``the Rule''), 16 CFR Part 310, which became effective on December 31, 
1995.2
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 6101 et seq.
    \2\ 60 FR 43842 (August 23, 1995).
---------------------------------------------------------------------------

    The Telemarketing Act directed the Commission to include in its 
rules ``a requirement that telemarketers may not undertake a pattern of 
unsolicited telephone calls which the reasonable consumer would 
consider coercive or abusive of such consumer's right to privacy.'' 
3 Section 310.4(b) of the Rule sets forth two prohibitions 
on sellers and telemarketers which were intended to effectuate this 
requirement of the Act. First, Sec. 310.4(b)(1)(i) prohibits causing 
any telephone to ring, or engaging any person in telephone 
conversation, repeatedly or continuously with the intent to annoy, 
abuse, or harass any person at the called number.4 The 
second provision in the Rule intended to limit unsolicited telephone 
calls is the ``do-not-call'' requirement set forth in 
Sec. 310.4(b)(1)(ii). This section prohibits any telemarketer from 
initiating, or any seller from causing a telemarketer to initiate, an 
outbound telephone call to a person when that person previously has 
stated that he or she does not wish to receive such a call made by or 
on behalf of the seller whose goods or services are being offered. This 
provision is modeled on a similar provision included in the FCC's 
regulations,5 adopted pursuant to the Telephone Consumer 
Protection Act (``TCPA'').6
---------------------------------------------------------------------------

    \3\  15 U.S.C. 6102(a)(3)(A).
    \4\  This provision is modeled on a similar provision in the 
Fair Debt Collection Practices Act (``FDCPA''). 15 U.S.C. 
1692(d)(5). The legislative history of the Telemarketing Act 
indicated Congress' intent that the Commission consider the FDCPA in 
establishing prohibited abusive telemarketing acts or practices. 
See, e.g., H.R. Rep. No. 20, 103rd Cong., 1st Sess. at 8.
    \5\  47 CFR 64.1200(a)-(f), 64.1200(e).
    \6\  47 U.S.C. 227.
---------------------------------------------------------------------------

    Although both the FTC and the FCC have similar regulations 
prohibiting sellers or telemarketers from calling persons who have 
stated that they do not wish to be called, there are differences in the 
enforcement of the TCPA and the Telemarketing Sales Rule. The Rule may 
be enforced by the Commission or the States.7 In addition to 
injunctions, each violation can result in a court's assessment of civil 
penalties up to $11,000 per violation, or an order to pay redress or 
disgorgement under Section 13(b) of the FTC Act, 15 U.S.C. 53(b). By 
contrast, the TCPA ``do-not-call'' provisions primarily have been 
enforced by consumers. The TCPA provides a private right of action for 
a consumer who receives more than one telephone call within any 12-
month period by or on behalf of the same entity in violation of the 
FCC's regulation.8 Such a plaintiff can recover the greater 
of $500 or actual damages.
---------------------------------------------------------------------------

    \7\ See 15 U.S.C. 6102(c), 6103. In addition, a person who 
suffers more than $50,000 in actual damages has a private right of 
action under the Rule. See 15 U.S.C. 6104.
    \8\ See 47 U.S.C. 227(c)(5).
---------------------------------------------------------------------------

    Because of the differences in the agencies' ``do-not-call'' 
provisions, the Commission declined to make a blanket pronouncement 
that compliance with the TCPA's ``do-not-call'' procedures would 
constitute compliance with the Telemarketing Sales Rule.9 
Nonetheless, the Commission has clarified that sellers and 
telemarketers need compile only one list of consumers who wish not to 
be called in order to comply with the recordkeeping provisions of both 
the TCPA and the Rule.10
---------------------------------------------------------------------------

    \9\ 60 FR at 43855.
    \10\ Id.
---------------------------------------------------------------------------

    While much of the TSR takes aim against fraudulent telemarketing, 
an equally important goal of the TSR is to protect consumers' right to 
privacy. In the five years since the Rule became effective, consumers 
increasingly have become interested in choosing what information is 
available about them and with whom and under what circumstances that 
information may be shared. In response to these concerns, local 
telephone companies and others have begun to market products that allow 
consumers to screen out calls from telemarketers, for example, by 
playing a message stating that no telemarketing calls are accepted or 
by blocking all calls except those from specific numbers selected by 
the consumer. Many states have responded to consumer concerns by 
enacting ``no call'' legislation,11 under which consumers 
may have their names placed on a list maintained by a centralized list-
holder of persons who do not wish to receive telemarketing 
calls.12 Sellers or telemarketers who call any of the 
persons on that list would be in violation of state law. Increased 
consumer awareness of the right to be placed on a ``do-not-call'' list 
also has resulted in the Commission receiving numerous consumer 
inquiries on how to stop receiving telemarketing calls and how to 
assert the right to sue an offending seller or telemarketer under the 
TCPA.13
---------------------------------------------------------------------------

    \11\ See, e.g.!, Alabama, 1999 Ala. Acts 589; Alaska, 1996 
Alaska Sess. Laws 142; Arkansas, 1999 Ark. Acts 1465; Florida, Fla. 
Stat. Sec. 501.059; Georgia, Ga. Comp. R. & Regs. r. 515-14-1; 
Kentucky, 1999 Ky. Rev. Stat. Ann. Sec. 367.46951 (Michie 1999); 
Oregon, 1999 Ore. Laws 564; Tennessee,1999 Tenn. Pub. Acts 478.
    \12\ The idea of a central ``no-call'' list is not new. For many 
years, Direct Marketing Association (``DMA'') has maintained a no-
call database called the ``Telephone Preference Service.'' Consumers 
may place their names and numbers on a list, which is provided to 
all DMA members. To remain in good standing with the DMA, its 
members agree to check the list regularly and remove from their call 
lists any person who has requested not to be called.
    \13\ FTC staff refers consumers to the FCC for assistance on how 
to assert their rights under the TCPA.
---------------------------------------------------------------------------

    During the year 2000, the Commission will be conducting a review of 
its Telemarketing Sales Rule.14 Simultaneously with this 
rule review, the Commission intends to conduct a broader study of 
telemarketing. The planned result is a separate report on the 
technological, social, business, and

[[Page 66126]]

other forces that have shaped the practice of telemarketing over the 
past two decades. The report will also look forward, assessing emerging 
trends for the future. The Commission will publish a separate Federal 
Register notice shortly to solicit comments and opinions in connection 
with both the rule review and the broader report on the telemarketing 
industry. In addition to requesting written comments and academic 
studies, the Commission plans to hold a series of public forums to 
afford staff and interested parties an opportunity to explore relevant 
issues.
---------------------------------------------------------------------------

    \14\ The Telemarketing Act directs the Commission to conduct a 
review of the Rule and its impact on fraudulent telemarketing after 
5 years following its promulgation, and to report the results to 
Congress. 15 U.S.C. 6108.
---------------------------------------------------------------------------

    The first forum in this series will address the ``do-not-call'' 
issue. By devoting an entire forum to this single topic, the Commission 
staff expects that interested parties will have sufficient time to 
explore the many facets of this important topic. This forum will be 
held in advance of the deadline for submitting written comments in the 
overall rule review so that participants will be able to use the ``do-
not-call'' discussion to advance alternative approaches, to gain deeper 
insight into the forces motivating the various interested parties, and 
to make their subsequent written comments more focused than they might 
otherwise be.
    After analyzing the complete record of the rule review, which will 
include the information provided at all the forums as well as all 
written comments and academic studies, the Commission will determine 
whether to propose amendments to the ``do-not-call'' provision or any 
of the other Rule provisions. The Commission will also use the 
information gathered during the review process in its report on 
telemarketing.

Section B. Public Forum

    The FTC staff will conduct a public forum to discuss the issues 
raised by the ``do-not-call'' requirement set forth in 
Sec. 310.4(b)(1)(ii) of the Telemarketing Sales Rule. The purpose of 
the forum is to facilitate a discussion among members of industry, 
consumer groups, state regulators, and law enforcement agencies about 
issues raised by this provision, and possible solutions to any concerns 
raised in the forum.

Section C. Request To Participate

    The FTC invites members of the public, industry, and other 
interested parties to participate in the forum. To be eligible to 
participate, you must file a request to participate by December 10, 
1999. If the number of parties who request to participate in the forum 
is so large that including all requesters would inhibit effective 
discussion among participants, FTC staff will select as participants a 
limited number of parties to represent the relevant interests. 
Selection will be based on the following criteria:
    1. The party submitted a request to participate by December 10, 
1999.
    2. The party's participation would promote the representation of a 
balance of interests at the forum.
    3. The party's participation would promote the consideration and 
discussion of the issues to be presented in the forum.
    4. The party has expertise in issues to be raised in the forum.
    5. The party adequately reflects the views of the affected 
interest(s) which it purports to represent.
    If it is necessary to limit the number of participants, those who 
requested to participate but were not selected will be afforded an 
opportunity, if at all possible, to present statements during a limited 
time period at the end of the session. The time allotted for these 
statements will be based on the amount of time necessary for discussion 
of the issues by the selected parties, and on the number of persons who 
wish to make statements.
    Requesters will be notified as soon as possible after December 10, 
1999, whether they have been selected to participate.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-30700 Filed 11-23-99; 8:45 am]
BILLING CODE 6750-01-P