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

December, 2001

FEDERAL COMMUNICATIONS COMMISSION
The Federal Communications Commission has imposed a $90,000 fine to a business which sent more than 20 unsolicited fax advertisements to consumers after receiving a written warning from the FCC. The company argued it had an established business relationship with the consumers who received the faxes. The FCC rejected this claim.

The FCC has also indicted CT Corporation System, a provider of registered agent services, for violations of the TCPA concerning unsolicited faxes.

FEDERAL TRADE COMMISSION
As reported in the newsletter last month, the Federal Trade Commission conducted a workshop on office supply fraud. In the past year, the FTC has received more than 1,000 complaints from businesses concerning office supply scams, most commonly sale of toner cartridges. Although business-to-business telemarketing campaigns are usually exempt from consumer protection rules at the state and federal level, the sale of nonreasonable office supplies is subject to the Telemarketing Sales Rule for the stated purpose of combating this scam. It remains to be seen whether the FTC will strengthen its restrictions on business-to-business telemarketing.

The Federal Trade Commission and six states have filed nine lawsuits and reached numerous settlements with companies concerning advanced fee loan campaigns, credit card protection plans and sales of office supplies by telephone.

The Federal Trade Commission has reached settlement with a seller of vacation packages chiefly involving allegations that the consumers were falsely told they "won" or were "specially selected" to receive vacations. The settlement requires that the defendants adhere to the Telemarketing Sales Rule and its "do-not-call" list provisions.

The Federal Trade Commission is holding a workshop in early December concerning steps necessary to implement and enforce the privacy provisions of the Gramm-Leach Bliley Act. The Commission will involve all eight federal agencies which are responsible for implementing and enforcing the Act's provisions. I will report on the findings, if any, next month.

SECURITIES & EXCHANGE COMMISSION
The Securities & Exchange Commission has proposed a rule which would explicitly apply federal restrictions concerning the sale of securities to telemarketing scripts.

IDAHO
The State of Idaho has reached settlements with several businesses engaged in telephone sales regarding violations of the state's "do-not-call" list.

ILLINOIS
The Attorney General, in conjunction with the Federal Trade Commission, has filed a complaint against an Illinois company alleging that a telemarketer engaged in fraud in conjunction with a credit offer. A federal court has enjoined the company from doing business and froze the company's assets. The business had been subject to more than 1,000 complaints.

MARYLAND
Maryland and Oregon have filed suit against an international sender of unsolicited fax advertisements. This case could be an important one to determine the scope of the Telephone Consumer Protection Act and its restrictions on international calls.

Maryland has proposed regulations to implement the privacy provisions of the Gramm-Leach Bliley Act to regulated insurance companies. These regulations restrict what information these insurers can share with third parties for the purposes of telemarketing.

MISSOURI
Missouri's Attorney General testified to a state House of Representatives Committee concerning the exemptions in the Missouri "do-not-call" list. The Attorney General has previously stated his desire to eliminate the exemptions found in the law.

Missouri's Attorney General has alleged that an international company has falsely sold a "no call" list. To my knowledge, this is first instance of a lawsuit against marketers of "third party" "do-not-call" lists.

NEVADA
Nevada has proposed regulations to implement the privacy provisions of Gramm-Leach Bliley Act applicable to telemarketing by companies regulated by the state insurance commission.

NEW JERSEY
The New Jersey Assembly is considering a resolution to urge the United States Congress to pass the "Know Your Caller Act of 2001" which would establish a national standard regarding implementation of caller i.d. devices.

NEW YORK
New York's Attorney General has reached settlement with a telemarketer of credit card protection plans. The settlement involves a refund of nearly $1 million to New York consumers.

OREGON
The State of Oregon has demanded a substantial penalty from a telemarketer for alleged violations of the state's "do-not-call" list. This may mark the addition of Oregon to the list of states which are aggressively enforcing their "do-not-call" lists. Until our facial challenges can be resolved, it is imperative that you subscribe to these lists and ensure that they are implemented correctly. Given how many numbers a dialer can call, a computer error which exists for only a short amount of time could quickly cost you thousands of dollars.

PENNSYLVANIA
The Pennsylvania House is considering a bill which would amend the definitions section of the state's Telemarketing Registration Act and create a state "do-not-call" list. The bill would clarify the definition concerning blocking of caller identification to limit the law's restriction to intentional actions taken to block caller i.d. devices.

UTAH
The Utah Department of Consumer Protection has promulgated a rule which allows consumers to authorize purchases of auto repair services by telephone.