Stateline Story

States Ring In Do Not Call Laws

The dinner bell in America has come to mean a telemarketer's ill-timed effort to persuade you to open your wallet. But 24 states are cracking down on sales calls by creating do-not-call lists or making telemarketers stop blocking caller I.D.

Seven states -- Texas, Colorado, Missouri, Illinois, Indiana, Louisiana, and Wyoming -- have adopted do-not-call laws in the past six months. Connecticut, Idaho, Kansas, Maine, New York and North Carolina created do-not-call lists last year. Florida was first to adopt a do-not-call law in 1998.

Marketers say the measures aren't needed, but they are popular with consumers. Wisconsin's consumer protection offices have gotten more than 1,000 calls from citizens asking to be added to a do-not-call list, and that state hasn't even implemented one yet. A state starting up a do-not-call program can expect to spend about $500,000, an outlay that includes buying computers and servers, or outsourcing database management, experts say. But such laws also offer states a revenue-generating opportunity.

Some states charge consumers $10 per year to get their name on a list, all states rent the lists to telemarketers for about $500 to $800 per year, and many are trying to collect steep fines --- between $10,000 and $25,000 per call-- from violators.

Missouri sued four telemarketing firms this summer for violating its new law. New York, where about 1.5 million residents are on the list, has filed more than 500 cases.

"The program pays for itself," said J.R. Kelly, director of the Florida Division of Consumer Services. "It's not an anti-telemarketing program. It's a right-to-privacy program."

About 139,000 Floridians have paid $10 to join the list. Kelly said his state gets 500 to 900 complaints per month and has taken about 75 enforcement actions. Staff time to handle complaints is the program's greatest expense, followed by technology costs.

This fall, Florida consumers will be able to sign up online which will save printing and mailing costs, Kelly said. Some 1,000 businesses pay $400 a year to get Florida's do-not-call list.

Keith Fotta, president and CEO of Gryphon Networks, a Massachusetts company that sells software to telemarketers to help them comply with the maze of state laws, said do-not-call laws "create a challenging picture for the telemarketing industry. But the technology is there for telemarketers to easily and automatically comply."

Federal rules say telemarketers may not call people who have asked to receive no more calls from a particular company. The rules require sellers to maintain their own do-not-call lists of those who don't want to be contacted by phone.

Consumers who receive "more than one telephone call within any 12-month period by or on behalf of the same company in violation of the regulations," may be able to take private action against that company.

Diana Mey of Wheeling, W.Va., has become famous for winning big settlements against telemarketers. Mey said Discover Card paid her $10,000 this spring after the company logged seven unwanted calls to her over two years. She settled out of court for $5,000 with MCI WorldCom. A local newspaper gave her $17,000 worth of advertising to make peace, and another telemarketer donated $500 to her son's Boy Scout troop.

Supporters of do-not-call laws, like Mey, favor a nationwide do-not-call list, pointing out the difficulty for telemarketers to adhere to a patchwork of state regulations. Jason Catlett, president of Junkbusters, an organization advocating privacy, said, "State implementations are very complicated. They have different loopholes. A uniform national standard would be preferable."

While there has been no action at the federal level to augment existing do-not-call rules, the U.S. Congress is considering a bill to ban telemarketers from blocking their phone numbers and identities from caller I.D. devices.

On the state level, 15 states-- Arkansas, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, New Hampshire, New York, Oklahoma, Tennessee, Texas, and Utah-- have enacted legislation regulating caller I.D. Twelve states introduced caller I.D. legislation this year.

In states where lobbyists for banks, credit card companies and long-distance telephone companies are powerful, do-not-call laws can become toothless tigers.

In Kentucky, for example, a watered-down law created several exemptions and forces only those businesses required to register as solicitors to use the do-not-call list. Tennessee, meanwhile, has a more stringent law that extends its do-not-call list to charities if calls are made by service bureaus instead of bona fide members or volunteers.

Maine, Connecticut and Wyoming require telemarketers to use a telephone preference list of 4 million consumers maintained by the Direct Marketing Association, the same group that has put the most muscle behind stopping the adoption of do-not-call lists.

Jerry Cerasale, senior vice president for government affairs at the DMA, said national telemarketers have to look at a myriad of state lists in different formats which increases the probability of calls made in error. The DMA opposes do-not-call laws because "there are already ways for people to get off a list," Cerasale said.

Do-not-call laws can be political gold for lawmakers who want to respond to consumers' complaints. But telemarketers, who are part of a $668 billion industry that employs nearly 6 million workers, don't want politicians to forget they have families to feed and bills to pay like anyone else.

Audrey Irvine, who works for a telemarketing firm in Minneapolis, said consumers can already block unwanted calls. "I don't think it needs to be at a state level," Irvine said. "Why take it to another level when there's no need to do that? It just seems silly to me."

Tags: Economy