FTC Hangs Up on Telemarketers' Pitch

The Federal Trade Commission effectively slammed the phone down on the U.S. telemarketing industry earlier this month, rejecting a request to allow prerecorded calls to consumers without their expressed consent.

Acting on a 2004 petition filed by Voice Message Broadcasting Corp. of Costa Mesa, Calif., the FTC decided it wouldn't allow companies to use taped calls, even if they claimed a "prior business relationship" with the consumer. The only way around the ruling, the agency proposed, would be if the customer consented in writing that he was willing to accept such calls.

"This adds protection for consumers so they don't have to deal with prerecorded messages," said Allen Hile , assistant director of the FTC's Division of Marketing Practices.

The decision followed an outpouring of 13,600 comments -- all but 600 in opposition to the request. Many pleaded with regulators not to create a loophole in the National Do-Not-Call Registry, which allows consumers to limit the telemarketing calls they receive and contains some 130 million numbers.

"The Do-Not-Call list has been enormously successful," said Marc Rotenberg , executive director of the Electronic Privacy Information Center , a District-based group that monitors privacy issues and filed comments against the industry request. "More people signed up for it than voted in the last election -- Bush and Kerry combined. It's a very clear statement Americans don't want to hear from telemarketers."

Consumers who put their phone numbers in the registry are protected from receiving unsolicited calls from companies. Exemptions allow charities, political organizations, telephone surveys and companies that have conducted business with a client in the preceding 18 months to make unsolicited calls.

FTC officials said consumers now receive 80 percent fewer calls than before the list was created in 2003. And comments opposing the petition show many want to keep it that way.

"Boo," said Russ Chadwick , a consumer in California who wrote to the FTC. "Any company will tell me they have an 'established business relationship' if it means they can harass me. The do not call list works great; please don't create loopholes."

One consumer complained about calls "invading my home with inexpensive advertising," and another said, "The very worst form of telemarketing is one made by a machine."

Rotenberg said business has been looking for the "soft spots" in the Do-Not-Call rule to allow more calling without a live human being making the "outbound" call, or without consumers expressly agreeing to receive such calls.

The FTC will begin enforcing the new rule Jan 2. It will supersede an existing rule by the Federal Communications Commission that allows prerecorded calls to existing customers. (A handful of industries regulated by the FCC won't have to comply with the FTC rule.)

The FCC rule has been in effect since 1991 and "there has not been a problem," said Jerry Cerasale , senior vice president of government affairs for the Direct Marketing Association in the District. The industry trade group told the FTC that the pre-recorded calls wouldn't become abusive because companies wouldn't want to jeopardize their relationships with customers.