A
Monthly Review of Issues Affecting Commercial Telemarketing
by Copilevitz & Canter, LLC, Attorneys at Law
May/June, 2008
FEDERAL
FCC
The FCC has published a summary of its rules and revisions pursuant to the TCPA. Currently, no proposed
changes in the regulatory regime are on the FCC's agenda.
FTC
The FTC has issued a letter to a major subprime mortgage company closing an investigation regarding a
data breach of that company's stored consumer information. The company promptly notified consumers
of the breach, but the FTC took into account the company's overall data security practices, response
to data breach, and responsiveness to the FTC's investigation in closing the investigation without a
fine. The FTC letter noted that it would expect companies to take sufficient steps to protect data
even from inside "rogue" employees.
The FTC announced 13 lawsuits against allegedly deceptive telemarketers filed on May 20, 2008. The
operation dubbed "Tele-PHONEY" included actions against a variety of domestic and international
telemarketers. Common to most of the claims was failure to promptly offer refunds, deceptive
representations regarding what was offered, and targeting elderly or otherwise vulnerable consumers.
The FTC's new affiliate marketing rule goes into effect on October 1, 2008. If your business shares
consumer information with affiliates or receives such information from your affiliates for marketing
purposes, you should immediately review this rule and compliance with it. It is not retroactive regarding
data received prior to the October implementation date, but prospectively will affect how you share data
with organizations affiliated with you.
The FTC will implement new CAN-SPAM rules effective July 7th. These rules will clarify that CAN-SPAM
applies to all persons, including corporations that receive commercial electronic e-mail. Additionally,
e-mails which are sent by multiple entities can now be designated to come from one "sender" if compliant
with the rule. Please contact me if you have questions regarding the new CAN-SPAM rule.
STATE
California
A California district court has rejected the FCC's standard for "prior express consent", ruling that a
consumer providing a number to a business and not making instructions to the contrary does not constitute
"prior express consent" to receive calls to that cell phone number. This case likely will be appealed.
Colorado
An appeals court in Colorado has upheld a trial court's ruling that TCPA claims are not assignable in
Colorado. The plaintiff purchased the right to prosecute a sender of unsolicited faxes. The trial court
and the appeal court ruled that such claims are not assignable in Colorado.
Georgia
Georgia's telemarketing law has been amended to include sales of securities within those telephone calls
regulated by Georgia's telemarketing law, banning deceptive, fraudulent, or abusive practices.
Illinois
An Illinois court has denied a motion to certify a class of plaintiffs against a bank which faxed advertisements
to businesses in several states. The court ruled that the plaintiffs failed to specify that the class was
limited to those entities which did not consent to receive the faxes and therefore denied the class certification.
Another Illinois court has ruled that the TCPA's ban on unsolicited faxes did not violate the First Amendment.
The court held that businesses had a substantial interest in the costs of receiving unsolicited faxes. The
court ruled that this restriction on commercial speech was not broader than necessary to protect this interest
and therefore the TCPA was constitutional.
Missouri
The Missouri Attorney General has become increasingly aggressive with regard to enforcement of Missouri's
"do-not-call" list. You should review compliance with federal and state "do-not-call" lists especially in
states which maintain their own "do-not-call" list and/or have differing established business relationship
periods or other differences from the federal standard. Missouri has also been aggressive with regard to
interpretation of the exemptions to the Missouri "do-not-call" list, bringing suit against nonprofits even
though donation calls are exempt from the Missouri list.
Nevada
Nevada Supreme Court has ruled that state courts in Nevada can hear TCPA claims if those claims otherwise
comply with Nevada Rules of Civil Procedure. The Supreme Court ruled that a separate statute or "rule"
authorizing TCPA claims in state court was not necessary to confer jurisdiction.
New Jersey
A rule has been proposed in New Jersey which would require telemarketers to disclose their outgoing call
capacity as part of the application for registration as a telemarketer. New Jersey bases its fee for
registration on the number of outbound telephone lines a telemarketer uses.
Ohio
The state of Ohio has filed suit against a credit card payment processor company alleging that it normally
provided services to telemarketers who were violating the National Do-Not-Call Registry and fraudulently
charged consumers fees. The suit also alleged that the telemarketers were not registered to solicit in Ohio.
The Ohio Attorney General has also filed suit against a major corporation alleging that it failed to register
in the state of Ohio and then charged consumers' bank accounts without proper confirmation.
The Ohio Attorney General has filed a third action against a Canadian company alleging failure to register
and improper charging of consumers' accounts.
Vermont
Vermont has amended its telemarketing statute to require that telemarketers who debit consumers'
depository accounts record the entire telemarketing call and maintain such recorded authorizations for
a period of at least four years. The law also requires that the telemarketer include a description of
specific goods or services offered and the material terms of the transaction, among other items, in the
oral authorization. This recording requirement exceeds that required by the Telemarketing Sales Rule.
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