(Note: The following made-up transcript comes from a made-up account of a made-up teacher’s made-up class lecture. However, the information offered as fact is, in fact, factual.)
All right, students, I’ll be keeping you in class today longer than usual, as we have a lot of information to go over. Quiet down. For you today: a brief class lesson on Congress’ enactment of federal laws addressing telemarketing (news - alert) fraud and practices, the establishment of a national do-not-call registry and consumers’ available options to attempt to limit those calls that interrupt meals and personal “alone time,” when you have hundreds of ritualistic things to do.
So get out your pens and wide-ruled notebook paper, and take notes. And please turn off all cell phones.
Let’s begin. Now, because both the FCC and the FTC are responsible for different aspects of telephone marketing (better known as telemarketing), both agencies have been directed to decree regulations. You see, the FCC, which is the Federal Communications Commission, generally covers consumers’ privacy rights relative to telemarketing practices and the use of the telephone system by telemarketers to transmit information. The FTC—the Federal Trade Commission—is concerned more with the content and consequences of these calls, and its regulations focus on whether certain sales practices are misleading, fraudulent deceptive.
Mr. West, in the back row, are you paying attention? You really should. You may be tested.
Okay. The Telephone Consumer Protection Act was passed in 1991, and it directed the FCC to issue rules balancing the fair business practices of telemarketers with the privacy concerns of consumers. One provision of the FCC rules resulting from this act was that telemarketing companies must maintain a do-not-call list for calls placed to residential phone numbers, and if a consumer requests that his or her name be placed on such a list, the company must honor the request for 10 years. Another provision was that telephone solicitations to private residences may only be made between 8 a.m. and 9 p.m. A third: use of auto-dialers or prerecorded voice messages to call emergency phone lines, a guest or patient room in a hospital, a healthcare facility or an elderly home are prohibited unless prior consent was given to receive such calls.
Yes, Ms. Mullen, that means your grandmother and grandfather, while she’s in the hospital eating her Jell-O and he’s in a home, probably also eating Jell-O, won’t have to hear from a telemarketer how they can recover the money they lost from the last telemarketer.
Also, any person or entity making a phone solicitation to a private home must provide the name of the individual caller, of the person or entity on whose behalf the call is made, and a phone number or address where to be contacted.
Mr. Joyce, second-to-last row, far right. Let’s keep awake, yeah?
This act was updated last year to establish a national do-not-call registry covering both interstate and intrastate calls. This update does not require states to discontinue their individual do-not-call registries. Tax-exempt nonprofit organizations and calls concerning political and religious speech are exempt from the FCC’s above rules. Additionally, consumers may still receive calls that are not commercial in nature or do not include unsolicited advertisements.
The Telemarketing and Consumer Fraud and Abuse Prevention Act was signed in 1994 for the FCC to establish rules to prohibit certain telemarketing activities. The final Telemarketing Sales Rule (TSR) went into effect at the end of 1995. Its provisions: restriction of calls to between 8 a.m. and 9 p.m.; forbidding of telemarketers from calling consumers who have asked not to be; requirement of certain prompt disclosures; prohibition of misrepresentation and lying to get customers to pay; makes illegal for a telemarketer to withdraw money directly from a checking account without the account holder’s specific, verifiable authorization. Telemarketers and sellers, under this rule, have to maintain certain records for two years from the date that the record is produced.
Mr. Knot, I don’t see you writing any of this down.
In 2002, after reviewing the rule’s effectiveness, overall costs and benefits, as well as its regulatory and economic impact, the FTC proposed the creation of a national do-not-call list. It also proposed that telemarketers be prohibited from blocking caller ID systems, that telemarketers be prohibited from obtaining a customer’s credit card or other account information from anyone other than the customer or from improperly sharing that number with anyone else for telemarketing use, and that the use of predictive dialers resulting in “dead air” violates the TSR.
Do you know what “dead air” is, Mr. Ingham? No? “Dead air” is when no one is on the other end of the phone line.
At the end of that same year, the FTC announced the creation of a national do-not-call registry. However, it was not implemented immediately, as it required funding approval from Congress. The FTC was provided the authorization for establishing fees in March of 2003.
The Senior Citizens Against Marketing Scams Act of 1994 included provisions that increased penalties for telemarketing fraud against people over 55 years old. Provisions of this law allow imprisonment up to an additional five years for certain telemarketing crimes or up to 10 additional years if 10 or more persons over the age of 55 were victimized or the targeted persons were over 55. The act requires that full restitution be paid to victims and directs the U.S. Attorney to enforce any restitution order.
The Telecommunications Act of 1996 closed a loophole in the 62-year-old Communications Act of 1934 that allowed information service providers and telemarketers to connect callers to “pay-per-call” services even though the callers had initially dialed a toll-free phone number.
Oh boy, class time is almost up. Let’s get through the rest of the historical overview.
All right, the Telemarketing Fraud Prevention Act of 1997 was signed to deter fraudulent telemarketers by raising the federal criminal penalties for telemarketing fraud and permitting the seizure of a criminal’s money and property to make restitution to victims. Criminals may be sentenced to additional prison time if persons over 55 were targets of the fraudulent telemarketing activities.
Signed in 2000, the Protecting Seniors From Fraud Act—put your hand down, Rocca; this act refers to senior citizens, not academic seniors—does a few things:
It authorizes $1 million for each of the fiscal years 2001-2005 to be appropriated to the Attorney General (Dept. of Justice) for senior fraud prevention programs. As academic seniors, you don’t count.
It directs the Dept. of Health and Human Services to provide and disseminate, within each state, information that both educates and informs senior citizens about the dangers of fraud, including telemarketing fraud.
It instructs the Attorney General to conduct a study of crimes against senior citizens.
It directs the Attorney General, not later than two years after the date of enactment of this act, to include statistics relating to crimes against seniors in each National Crime Victimization Survey.
The act found that an estimated 56% of the names on calling lists of illicit telemarketers are people 50-years-old and over. As a result, older people are often the target of telemarketing fraud.
The final act we’ll cover today is the Crimes Against Charitable Americans Act of 2001. Passed following the September 11 attacks, this amendment to the USA Patriot Act expands the coverage of the FTC’s TSR to apply to calls made to solicit charitable contributions. Additionally, the act increases the penalty for impersonating a Red Cross member or agent.
We’re almost through, class. Bear with me a little longer and I’ll let you out early next time we meet.
What can consumers do? As you also should be of politics, be informed. Seek information about telemarketing and telemarketing scams at the library.
What do you mean “what’s a library?” Ugh. The information’s on the Internet, too, all right?
Also, be dubious. Be skeptical. Be cautious. Don’t trust letters, postcards or phone calls that say you’ve won a free trip, prize or sweepstakes.
You can also report incidents of false or deceptive telephone solicitation sales practices. First, contact a local or state consumer affairs office or the state attorney general’s office. The FTC may also be contacted. Suspected fraudulent telemarketing activities may be reported to the National Fraud Information Center (NFIC). If you believe violations of the Telephone Consumer Protection Act have occurred, contact the FCC. And ask to be placed on a do-not-call list. If you don't want to talk to telemarketers when they call, simply say, “No, thank you. I’m not interested.”
Now, class, I know today’s lecture went longer than usual, but this is important information. Savvy? For those of you interested in extra credit, read the entire Congressional Research Service document, “Telemarketing: Dealing with Unwanted Telemarketing Calls”, at www.gallerywatch.com. Then write 1,430 words on it.
(Editor's Note: For more guidance on regulatory compliance, please see TMC's Call Compliance Regulatory Guide.)
David R. Butcher is assistant editor for
Customer Inter@ction Solutions
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