A Monthly Review of Issues Affecting Commercial Telemarketing by Copilevitz & Canter, LLC, Attorneys at Law

August, 2001

ARKANSAS FACIAL CHALLENGE
The Eighth Circuit issued its opinion upholding the "no-rebuttal" law in the face of our constitutional challenge. All was not lost, however, as the Court made three-key rulings in our favor. First, the Court held that the law did regulate speech and was subject to First Amendment scrutiny. The Arkansas Attorney General had argued that the law was unrelated to speech. Second, the Court held that a telemarketer does not have to disconnect when a consumer gives an ambiguous response. A telemarketer is entitled to ask additional questions and present additional information in the face of such ambiguity. Third, the Court held that the Attorney General was not correct in its interpretation that the "no-rebuttal" law extended beyond the particular conversation during which the consumer said "no." The Attorney General had argued that the telemarketer could not then redial that consumer in the future. The Court held that the law applied only to that conversation and had no effect on future activity of the telemarketer. We are appealing the ruling.

ALABAMA
Alabama has taken a position that it will not sell its "do-not-call" list to businesses which are not required to register as telemarketers under the Alabama law. As you may recall, Kentucky took this same position which basically meant that no business buys Kentucky's list. I will keep you posted regarding whether Alabama changes its interpretation.

CALIFORNIA
The California Assembly is still considering a bill which would regulate the use of prerecorded messages in telemarketing. Please contact me if you would like to discuss this bill.

DELAWARE
The Delaware Senate is considering a bill which would prohibit licensed cemeteries from engaging in telemarketing. Not to beat the dead horse, but content-based restrictions on speech like this are clearly unconstitutional.

DISTRICT OF COLUMBIA
The District of Columbia has enacted a telemarketer registration requirement. The law requires that telemarketers post a $50,000 bond prior to telemarketing in the District and it incorporates most of the anti-fraud provisions of the Telemarketing Sales Rule. The law does not contain an exemption for telemarketing service bureaus which have been in business for a certain period of time and provide most of their services to otherwise exempt entities, although the law does contain most of the other standard exemptions found in other states' telemarketing laws.

GEORGIA
The Governor of Georgia has signed an Executive Order authorizing the Attorney General to investigate a fraudulent telemarketing operation which sold magazines in an Atlanta suburb. It is alleged that the operation purposely targeted the elderly and made sales through fraudulent representations.

ILLINOIS
The Illinois Attorney General has filed suit in Federal Court against a company which allegedly charged a $299 fee plus $5 a month to obtain an unsecured credit card with a credit limit of $3,000. The card could only be used to purchase merchandise from a specific merchant's catalogue.

NEW YORK
The New York Attorney General has accused three Canadian companies of charging consumers between $150 and $200 for credit cards where no credit card was provided but instead delivered a list of creditors that consumers could contact directly to apply for cards.

A bill has been proposed in the New York General Assembly to make a $1.2 million appropriation to pay for the New York "do-not-call" list.

NORTH CAROLINA
A bill has been proposed in the North Carolina Senate which would require insurance businesses in this State to comply with the federal privacy provisions of the Gramm-Leach-Bliley Act.

PENNSYLVANIA
The Commonwealth of Pennsylvania has settled slamming allegations with a major long distance carrier. Allegations included switching without consent and consumers being enticed into switching carriers based on offers of free airline tickets.

TENNESSEE
The State of Tennessee has taken an aggressive stance regarding which businesses must purchase the Tennessee "do-not-call" list. Recently, a regulator has stated to me that both the business hiring a telephone service bureau and the service bureau had to purchase the list even if the business placed calls only through that service bureau. This redundancy is troubling.

TEXAS
The Texas Department of Insurance has proposed regulations regulating insurance businesses in the State and requiring that they comply with the privacy provisions of the Gramm-Leach-Bliley Act.

UTAH
The Utah Department of Commerce has proposed

a rule which would require applicants seeking to register as commercial telemarketers to provide telephone numbers used and a description of goods or services which are being sold in the telephone solicitation.

WISCONSIN
The Wisconsin General Assembly is considering a bill which would expand the state's privacy protection law. The bill has several telemarketing provisions added to it including prohibiting the use of an automatic telephone dialing system in such a way that two or more telephone lines are engaged simultaneously; prohibiting the blocking of caller i.d.; and transferring enforcement of the state's autodialer law to the Department of Consumer Protection. Further, the bill allows residential telephone subscribers to notify telecommunications carriers to add them to a "do-not-call" list administered by the telephone company. Although the "do-not-call" list provision is problematic, the prohibition on using a device so that more than two lines are occupied at the same time is potentially the most dangerous. It could be read to prohibit all use of predictive dialers because it does not specify if the lines regulated are inbound or outbound. This legislation has been proposed in a different form in the past and should not be allowed to be passed in this form, either.