Telemarketing Law Loopholes May Disappoint Consumers

April 14, 2003

Dialessi2
Telemarketing is a telephone solicitation, which functions as a verbal advertisement for a product or service that the vendor wants you to purchase. Until January of 2003, in the Commonwealth of Massachusetts, telemarketers’ activity has been regulated by broad Federal Communications Commission (FCC) regulations which restricted little more than the time of day that such calls could be made, and established the stipulation that the telemarketer must reveal his name, and the phone number, address and name of the company that he is representing. As of January 1st 2003 however, a new law governing telemarketing activity is in effect. This law significantly restricts the conduct of companies that employ telemarketing techniques, but don’t look to this as a means to end the annoyance of telemarketing. Too many loopholes will allow the more unscrupulous of companies to continue business as usual.

Businesses phone lines are exempt from the new telemarketing law, but consumers are now able to register their phone number to be included on a ‘do not call’ list that must be purchased by companies who must be registered if they want to telemarket in Massachusetts. These numbers must be removed from telemarketing lists that companies use to place their calls. Consumers can register as many phone numbers as they have, and may register others’ numbers with their permission by going to https://www.madonotcall.govconnect.com/Welcome.asp or calling 866-231-2255. Starting in March, for an April 1st of 2003 active date, companies will receive a quarterly ‘do not call’ list, and will be obligated to respect the wishes of those who do not want to receive telemarketing calls. Once a number is registered it will remain on the ‘do not call’ list until the consumer completes and submits a form requesting that their number be removed. It is important to note that the quarterly effective dates are the first day of the calendar year quarters, so consumers who register between March and June will be added to the list effective July first.

Additional noteworthy restrictions in the new telemarketing law include enhanced time restrictions for the calls, restrictions against caller ID blocking and the usage of recorded messages. The FCC restricts telemarketers from calling homes between the hours of 8AM and 9PM, but the new MA law restricts calls made to all homes between 8AM and 8PM, whether or not their number is registered on the ‘do not call’ list. In addition, telemarketers are prohibited from using recorded message devices, and they are not permitted to block their identity from the consumer. This means that telemarketing calls should no longer show up on caller ID as ‘unavailable’ or ‘out of the area.’ But since this part of the law actually went into effect January 1st of this year, each of us can draw our own conclusions about how effective these stipulations actually are.

There are also exemptions to the MA telemarketing law. Non-commercial polls or surveys and tax-exempt entities may continue to call all consumers. So this law will not restrict such things as political polls and fundraising efforts. Calls made by companies that have an established business relationship are also allowed, until the consumer expresses a desire to no longer be contacted. An established business relationship exists if a consumer has ever made an inquiry, application, purchase or transaction regarding products or services offered by the company that the telemarketer represents. Debt collection is also permitted, as well as sales calls to an existing customer and also calls within the context of ongoing consumer sales in which face-to-face meetings are prerequisites to payment. This would include calls to confirm appointments.

Violations of the telemarketing law can be reported to the Massachusetts Attorney General’s (AG) office, or consumers may bring individual legal action against offenders. Either action may result in up to a $5,000 fine being levied against the offender. This is where the law comes up short, however. The burden of proof and record keeping becomes the responsibility of consumers. Unfortunately a first violation by a company is not eligible for adverse action against them. Only repeat offenses, within a 12-month period, can be reported to the AG’s office and used in lawsuits. Additionally, consumers must document violations, meaning that a log must be kept by their phone in which they record the date and time of each alleged violation, the number appearing on caller ID, the name of the company calling them, the name and address of the telemarketing firm representing the company and any product or service information. This information is required when submitting a complaint against a company in violation of the telemarketing law. Because of these requirements, it remains to be seen if companies respect the ‘do not call’ list or simply apologize for their error when they reach an annoyed consumer who is included on the list. The fact that they cannot have action brought against them for a single infraction will likely be little deterrent for the more unscrupulous of telemarketers, especially since there is no way for consumers to check if companies have even registered to telemarket in MA and received the ‘do not call’ list.

On the surface the new telemarketing law that went into effect January 1st this year seems attractive to scores of consumers who cringe every time the phone rings during dinner. It is easy and free to register for the ‘do not call’ list, and the law requires companies, except those exempted, that intend to telemarket within Massachusetts, to pay an annual $1,100 registration fee and remove all names received quarterly from their call lists. This law is a big step toward eradicating the annoyance of telemarketing, but it remains to be seen just how effective a law can be when single infractions are not punishable, and it is so tedious to bring action against offenders.

Julie A. Dialessi-Lafley , Esquire
Julie is a multi-faceted business lawyer with experience in all aspects of corporate, business, real estate, estate planning and general legal matters.

by: Julie A. Dialessi-Lafley, Esq.

BusinessWest
May 2003