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

July, 2003

FAX CLASS ACTIONS
The TCPA bar on transmission of unsolicited fax advertisements is the subject of numerous class actions against businesses which may have sent illegal faxes. Your business must not send advertising faxes or considerable liability could result. The FCC (see below) has recently ruled that you must have express, written consent from the recipient to send these faxes. You should not rely on the word of a third party vendor that a list is "opt-in" or you could be liable for millions of dollars if that statement is incorrect. Please call me if you have questions on this topic.

FCC
The Federal Communications Commission issued a Report and Order on July 3, 2003, containing proposed revisions to its Telephone Consumer Protection Act (TCPA) regulations. For the most part, the proposed changes "harmonize" the FCC's regime with that proposed by the new Telemarketing Sales Rule through the Federal Trade Commission. The FCC closes many of the gaps in jurisdiction under the Telemarketing Sales Rule such as calls by banks and long distance companies. The new TCPA rules create a national "do-not-call" list and still require the internal "do-not-call" list which is already in place.

The TCPA will ban abandonment higher than 3% but measures that percentage on a monthly basis rather than a daily basis. The new TCPA bars sending advertising material by fax unless the recipient has explicitly consented to receive those faxes in writing and also clarifies that unsolicited advertisements are prohibited using recorded or artificial voice messages if the call is intended to result in the sale of goods or services either during the call or at a later time. The entire Report and Order is close to 200 pages long. It is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-153A1.pdf. Please contact me if you have any questions regarding the content of the FCC's rule or its effect on your business.

STATE "DO-NOT-CALL" LISTS
The FCC also announced that it intends to "almost certainly" preempt application of state "do-not-call" lists to interstate calls. Although state lists will be allowed to continue operation, they will apply only to intrastate calls. Some states' authorities may not be pleased with this announcement and may attempt to challenge the FCC in a "test" case. The FCC's ability to preempt state laws application to interstate calls is well established, and it is likely that the FCC and the defendant telemarketing business would win such a case. Such a case, however, would also be expensive to litigate.

FTC
I am sure you are aware that the FTC's "do-not-call" list began signing consumers onto the list this month. The effective date for compliance is still September 1, 2003. There are still three lawsuits alleging that the list is unconstitutional or otherwise improper. The results of these lawsuits could delay implementation of the list or other TSR requirements.

CALIFORNIA
The California Assembly is considering a bill which would require all telemarketing transactions to meet the requirements of the Telemarketing Sales Rule. Presumably, this law is intended to close the gap created by lack of FTC jurisdiction over intrastate calls.

KANSAS
Kansas has filed suit under its "do-not-call" list law against a Texas seller of vacation packages. As is often the case, the suit also makes other allegations, i.e. that the company's selling practices were unconscionable.

MISSOURI
The Supreme Court of Missouri has issued an opinion holding the constitutionality of the TCPA with regard to its prohibition on unsolicited faxes. Many class actions have been filed with regard to unsolicited faxing. Your business should not place unsolicited faxes nor hire agencies to place them on your behalf as substantial, indeed catastrophic, liability could result.

The Missouri Attorney General also settled a "slamming" suit with a long distance seller which alleged that entry forms for a prize contest improperly sold telecommunications services. The FCC has rejected this method of verifying a transfer of telecommunications provider.

NEVADA
Nevada has amended its telemarketing law to prohibit blocking caller identification information and establishing a state "do-not-call" list.

OKLAHOMA
Oklahoma has amended its "do-not-call" law to explicitly exclude from coverage calls to businesses. The bill also allows the Oklahoma Attorney General to forward consumer complaints to the Federal Trade Commission, Federal Communications Commission or other regulatory agency.

Oklahoma also issued orders prohibiting two businesses from calling into the state until they registered under the state telemarketing registration law.

PENNSYLVANIA
The Attorney General announced an $8,500 settlement of a suit alleging violation of the state's "do-not-call" list law. The suit alleged telephone representatives claimed to be exempt from the law.

RHODE ISLAND
The Rhode Island House is considering a bill which would amend the state's "do-not-call" list law to prohibit sending text message advertisements to pagers or cellular telephones. Such messages are probably already prohibited by the TCPA.

SOUTH DAKOTA
South Dakota has promulgated regulations necessary to implement its "do-not-call" list. These regulations adopt the FTC's list instead of creating a separate state mechanism.

TEXAS
Texas has passed a law amending its "do-not-call" list to delete the address field from the information required for consumers to sign onto the list and replace it with the consumer's zip code.