Federal laws

There are two major federal laws that regulate telemarketing. They somewhat overlap and are discussed below in more detail.

· The Telemarketing and Consumer Fraud Abuse Prevention Act, also called the Telephone Sales Rules (TSR), is overseen by the Federal Trade Commission (FTC). (15 USC 6101-6108; 16 CFR 310). For the latest version of the TSR, see
http://www.ftc.gov/os/2003/01/tsrfrn.pdf

· The Telephone Consumer Protection Act of 1991 (TCPA) focuses on the uses of telephone lines, and is regulated by the Federal Communications Commission (FCC). (47 USC 227; 47 CFR 64.1200). For the latest version of the TCPA, see
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-153A1.doc.

Federal laws, also known as the U.S. Code, can be found online at www.law.cornell.edu/uscode. Federal regulations, known as the Code of Federal Regulations, or CFR, are found online at www.access.gpo.gov/nara/cfr/index.html.

Telemarketing and Consumer Fraud Abuse Prevention Act -- Telephone Sales Rules

The Telephone Sales Rule's provisions on the National Do Not Call Registry are explained in previous sections. The following are additional aspects of the Rules not discussed above.

· Do not call lists. You can sue telemarketers who violate the company-specific do not call law. However, it is more difficult to sue under this law than under the Telephone Consumer Protection Act (see below). For instance, you can only sue in federal court and must show damages greater than $50,000. (15 USC 57(a))

· Disclosures. Telemarketers must promptly make certain disclosures including that it is a sales call, what they are selling, and the identity of the seller. If the call is for a prize promotion, the caller must tell you that no purchase or payment is required to win a prize or participate in a prize promotion. (16 CFR 310.4 (d))

Before the customer pays, the telemarketer must disclose the total costs of the goods, any restriction on getting or using them, and whether all sales are final or non-refundable. If the call is for a prize promotion, they must tell you the odds for winning, that no purchase or payment is required to win, and all material costs or conditions to receive the prize. (16 CFR 310.3 (a)(1))

Telemarketers who offer credit card loss protection plans cannot mislead consumers to purchase their product if it provides benefits or protections already afforded under federal law (15 USC 1648) regarding the limit of cardholder's liability for fraudulent charges. (16 CFR 310.4(a)(2))

· No misrepresentation. Telemarketers cannot misrepresent any information including the total cost and the quality of any goods or services. In addition, telemarketers may not make false or misleading statements to persuade you to purchase any goods or services. (16 CFR 310.3 (a)(2))

· Checking accounts and unauthorized billing. Telemarketers cannot obtain or withdraw money from your checking, savings, or similar accounts without your express verifiable authorization. Before charging your credit card account, the telemarketer must get your informed consent and must specify the amount. If a telemarketer has your account information before the call and offers you goods or services on a free trial basis before automatically charging the account, the telemarketer must get your permission to use the account number, ask you to confirm the number by repeating the last four digits, and record the entire phone transaction. This is called a "free-to-pay conversion" offer, also known as a "negative option." (16 CFR 310.2(o) and (t))

· Unencrypted billing information. Telemarketers are prohibited from disclosing, receiving, or transferring unencrypted account information. (16 CFR 310.4(a)(5))

Telephone Consumer Protection Act of 1991 (TCPA)

National Do Not Call Registry. The Federal Communications Commission recently updated this law so that industries under its jurisdiction must also comply with the FTC's Do Not Call Registry. (47 CFR 64.1200(c)(2)) For more information about the updates made to the TCPA, see http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-153A1.doc.

· Do not call lists. The TCPA requires most telemarketers who are exempt from the National Registry to take you off their company-specific calling lists at your request. (47 CFR 64.1200(e)(2)) Telemarketers must add your phone number to this list within 30 days of the request. Your number should remain on this list for five years. (47 CFR 64.1200 (e)(2)(vi)) Further, telemarketers must have a written policy for maintaining their own do not call lists, available upon demand. (47 CFR 64.1200 (e)(2)(i)) If you have received more than one call by or on behalf of the same company in one year after you have told the company to place your name on the do not call list, you can:

a) Sue the telemarketer in state court (usually small claims is recommended) to stop such calls and/or to recover a penalty. (47 CFR 64.1200 (e)(2)(iii)) The penalty is actual monetary loss or up to $500, whichever is greater, for each call received after you requested to be placed on the do not call list. If the court finds that the marketer willfully or knowingly broke the law, the penalty is up to three times the actual monetary loss or up to $1,500, whichever is greater. If the telemarketer did not send a copy of its company-specific do not call policy, you can claim additional damages.The penalty for violations with respect to automatic dialing systems, prerecorded messages and facsimile machines, is $500 or actual damages, whichever is greater. The penalty for willful or knowing violations is $1,500 or three times the actual damages.

b) File a complaint with the FCC.

Consumer tip: If you want to take action against a company that continues to call, send a certified letter, return receipt requested, demanding to be placed on the company's do not call list. Keep a copy of the letter and the return receipt as proof. Also, keep a log of all calls and of your requests for the company's do not call policy.

· Recorded messages and automatic dialing devices. Under the TCPA, a telemarketer cannot place a call to a residence using a prerecorded message unless the called party gives "express consent" or the call is for emergency purposes. (47 CFR 64.1200 (2))

    This requirement does not apply to calls that are made:

• For a commercial purpose such as from one business to another.
• To those with whom the company has an established business relationship at the time the call is made.
• From a tax-exempt nonprofit organization.

The law prohibits autodialed and/or prerecorded messages to emergency numbers, hospitals, cellular telephones, pagers, or any service for which the called party is charged for the call. (47 CFR 64.1200 (a)(1)(i) to (iii)) However, they are allowed in emergencies or if the person called has given prior consent.

Prerecorded messages are required to disclose the identity of the business, individual, or other entity making the call at the beginning of the message. The telemarketer must provide its address or telephone number (other than a 900 number or the number of the autodialer or prerecorded message player) and not a numeric prompt. (47 CFR 64.1200 (2)(iv)) Any prerecorded call made using an autodialer must release your line within five seconds after you have hung up. (47 USC 227)

California Laws

California statutes can be found on the Internet at the web site www.leginfo.ca.gov/calaw.html. Some of the provisions described below may not be enforceable because they are weaker than federal FCC laws.

• Do Not Call list. Under California Business and Professions Code sections 17590-17595, any telemarketer who contacts Californians must comply with the National Do Not Call Registry. Telemarketers must purchase those California numbers that are included in the National Registry from the FTC with some exceptions. The exemptions are as follows:
• Businesses with which you have an established business relationship. Nonprofit groups to which you have donated or participated in an event.Tax-exempt charitable organizations.
• Calls to verify that a subscriber has terminated an established business relationship.
• Civil action. In addition to the California Attorney General, a district attorney, or a city attorney filing a civil action against a telemarketer, California consumers may bring a civil action in small claims court for an injunction. If the consumer receives further solicitations within 30 days after the injunction is ordered, a subsequent action can be filed in small claims to be awarded a civil penalty of up to $1,000. (California Business and Professions Code 17593)
• Disclosures. The telemarketer must disclose specific information at the time of the sales pitch. The disclosures depend on the type of goods or services the telemarketer is selling. For example, a telemarketer selling office equipment or supplies below normal costs must disclose the address of the location caller and the name of the manufacturer of each item being sold. (See California Business and Profession Code 17511.5 for a list of disclosures.)
• Recorded messages. Unsolicited prerecorded calls for the sale or lease of goods or services are banned unless a "live" operator first asks permission to play the tape. The operator must also tell the person who answers the phone the name of the caller and either the caller's address or telephone number. The operator must also ask if the person consents to hear the recorded message. Companies can use recorded messages when they contact established customers or if you have requested their call. (California Civil Code 1770(22)(A))

If you have suffered damages as a result of prerecorded calls, you may sue to recover damages, stop the calls, restore your property and/or obtain other relief that the court believes you deserve (California Civil Code 1780).

• Automatic dialing-announcing devices. Marketers use automatic dialing-announcing devices to advertise using pre-recorded messages. These calls are prohibited unless a "live" operator first makes an announcement to the person called. The operator must state the nature of the call and the name, address and telephone number of the business. The caller must also inquire if the person consents to hear the prerecorded message. This requirement does not apply to law enforcement or other specified agencies that use the automatic dialing-announcing device to provide information relating to public safety, police, or fire emergencies. (California Public Utilities Code 2872-2874)

Automatic dialing-announcing devices may be used if the person being called has given prior consent, if there is a prior business relationship, if they have requested the call, or for other specified purposes including a school contacting a student's parent/guardian regarding attendance. (California Public Utilities Code 2872, 2873) These devices may only be used in California to place calls received in California from 9:00 a.m. to 9:00 p.m. (California Public Utilities Code 2872)

The California Public Utilities Commission (CPUC) imposes penalties for violations of the use of automatic dialing-announcing devices. The penalty is a fine up to $500 for each violation and/or disconnection of the telephone service to the automatic dialing-announcing device for a period of time as specified by the CPUC. (California Public Utilities Code 2876)

Other State Laws and Agencies

• State Do Not Call lists
• www.ftc.gov/bcp/conline/edcams/donotcall/statelist.html
• www.the-dma.org/government/donotcalllists.shtml
• www.aarp.org/bulletin/departments/2002/consumer/0810_consumer_1.html
  
• National Association of Attorneys General:
  Contact information for state AGs, www.naag.org/ag/full_ag_table.php

· 50-state directory of state, county, and city consumer protection offices in The Consumer Action Handbook of the Federal Consumer Information Center,
www.consumeraction.gov/state.shtml

· Public Utilities Commissions (PUC) and Public Service Commissions (PSC) regulate telephone calls and services in many states. For contact information for your state's PUC or PSC,
see www.consumeraction.gov/utility.shtml

Other Organizations

• For a $20 annual fee, Private Citizen will list you in its Do Not Call Private Citizen Directory which is distributed twice a year to the major telemarketing firms. This service applies to telemarketers who are exempt from the National Registry and therefore must maintain a company-specific do not call list. Call (800) CUT-JUNK. Private Citizen also sells the booklet, "So You Want to Sue a Telemarketer." Web: www.private-citizen.com

• The Junkbusters web site provides free pre-written letters to send to telemarketers and opt-out services, www.junkbusters.com/telemarketing.html. This service applies to telemarketers who are exempt from the Registry.

• The web site of Californians Against Telephone Solicitation provides numerous tips including testimonials from those who have successfully taken telemarketers to court for company-specific do not call violations, www.stopjunkcalls.com.