Telemarketing: Dealing with Unwanted Telemarketing Calls
CRS Report for Congress
Telemarketing: Dealing with Unwanted
Updated October 5, 2004
James R. Riehl
Information Research Specialist
Information Research Division
Congressional Research Service ˜ The Library of Congress
Telemarketing: Dealing with
Unwanted Telemarketing Calls
In recent years, Congress has enacted several federal laws addressing
telemarketing fraud and practices. As a result, both the Federal Communications
Commission (FCC) and the Federal Trade Commission (FTC) have established
regulations covering the $720 billion telemarketing industry in the United States. It
is estimated that consumers lose over $40 billion a year to fraudulent telemarketers.
Although the vast majority of telemarketers are legitimate business people attempting
to sell a particular product or service, there are unscrupulous individuals and
companies violating telemarketing rules and promoting various fraudulent schemes
aimed at parting consumers from their money.
The FCC, FTC, and several consumer groups and government/business
partnerships identified in this report provide extensive information on telemarketing.
This report provides summaries of the federal laws and regulations particular to
telemarketing, the establishment of a national do-not-call registry, and on the options
that are available to consumers to attempt to limit the calls that they receive from
telemarketers and to report questionable telemarketing practices to local or federal
authorities. The report also lists sources of additional information with addresses,
phone numbers, and Internet sites (if available) and will be updated as legislation or
news events warrant.
Telephone Consumer Protection Act of 1991 (TCPA).................2
2002 FCC TCPA Review...................................3
2003 FCC Update of TCPA Rules and Creation of a National
Telemarketing and Consumer Fraud and Abuse Prevention Act..........5
FTC Telemarketing Sales Rule Review.........................7
2002 FTC Creation of a National Do-Not-Call Registry and
Other Rule Changes....................................8
Do-Not-Call Implementation Act, 2003........................9
Consolidated Appropriations Resolution, 2003...................9
Fees for Industry Access to the National Registry................12
Senior Citizens Against Marketing Scams Act of 1994...............13
Telecommunications Act of 1996................................13
Telemarketing Fraud Prevention Act of 1997.......................13
Protecting Seniors from Fraud Act...............................14
Crimes Against Charitable Americans Act of 2001...................14
What Consumers Can Do...........................................15
Reporting Incidents to the Authorities/Filing Complaints..............16
Federal Trade Commission.................................16
National Fraud Information Center...........................17
Federal Communications Commission........................17
Ask to Be Placed on a Do-Not-Call List.......................17
State Do-Not-Call Lists....................................18
Direct Marketing Association...............................18
American Teleservices Association...........................20
List of Tables
Table 1. Telemarketing in the United States.............................1
Telemarketing: Dealing with
Unwanted Telemarketing Calls
Telephone marketing, better known as telemarketing, is an approximately $720
billion business in the United States, according to the Direct Marketing Association
(DMA). As telephone technologies become more advanced, it becomes more cost-
effective for telemarketers to use these technologies to sell various products and
services directly to consumers. Only a few households have not received a
telemarketing call. However, with the expansion of the telemarketing business
comes the expansion of telemarketing fraud. Although the vast majority of
telemarketers are legitimate business people, there are other individuals and
companies who violate existing laws and rules and bilk unsuspecting customers of
$40 billion a year according to some estimates.
Table 1. Telemarketing in the United States
(dollars in billions)
1997 2001 2002 2003 2007
Consum er $196.6 $275.2 $296.2 $315.3 $435.4
Business $249.7 $384.9 $413.9 $449.5 $630.1
Tot a l $446.3 $660.1 $710.1 $764.9 $1,065.5
Source: Direct Marketing Association. Economic Impact: U.S. Direct Marketing Today, 2003,
Executive Summary. [http://www.the-dma.org/library/]
In recent years, several federal laws that deal directly with telemarketing issues
have been enacted. Each of the laws has a different focus relative to telemarketing,
but all attempt to limit or prohibit certain abusive, fraudulent, or deceptive practices.
Because both the Federal Communications Commission (FCC) and the Federal Trade
Commission (FTC) are responsible for different aspects of telemarketing, both
agencies were directed to promulgate regulations. The FCC generally covers
consumers’ privacy rights relative to telemarketing practices and the use of the
telephone system by telemarketers to transmit information whether via facsimile
machine, automated dialing mechanisms, recorded calls, or by a live person. The
FTC is concerned more with the content and consequences of the call, and its
regulations focus on whether certain sales practices are misleading, fraudulent, or
deceptive. Individual states have passed laws relating to telemarketing practices
within a state.
Telephone Consumer Protection Act of 1991 (TCPA)
The TCPA, P.L. 102-243, was signed by President Bush on December 20, 1991.
It was the first of the six federal laws passed dealing specifically with telemarketing
issues. This act directed the Federal Communications Commission to issue rules
balancing the fair business practices of telemarketers with the privacy concerns of
Some of the provisions of the FCC rules resulting from this act are as follows:
!Telemarketing companies must maintain a do-not-call list for calls
placed to residential telephone numbers. If a consumer requests that
his/her name be placed on such a list, the company must honor the
request for 10 years. Nonprofit and charitable organizations are
exempted from this provision, and the rules do not apply to calls
placed to business telephone numbers.
If a consumer’s name is on a company’s do-not-call list and the company places
more than one call to that consumer in the year after the consumer has been placed
on the list, the consumer may, if he/she wishes, sue the telemarketer in state court,
usually a small claims court. Should a consumer pursue court action, he/she should
maintain records of all calls and contacts with the company.
!Telephone solicitations to private residences may only be made
between the hours of 8:00 a.m. and 9:00 p.m.
!Use of autodialers or prerecorded (artificial) voice messages to call
any emergency telephone line (911, hospital, medical office, health
care facility, poison control center, police, or fire lines), a guest or
patient room in a hospital, health care facility, or home for the
elderly, any phone number assigned to a paging service or cellular
telephone, or services for which the person called would be charged
for the call are prohibited unless prior consent was given to receive
!Prerecorded (artificial) voice calls to private homes are prohibited.
However, such calls are permitted if the person called has consented
to receive such calls, the call is noncommercial (from a charitable,
nonprofit, political, or polling organization or government agency),
the entity calling has an established business relationship with
person called, or the call is an emergency. Such calls to business
numbers are permitted.
!Any person or entity making a telephone solicitation to a private
home must provide the name of the individual caller, the name of the
person or entity on whose behalf the call is being made, and a
telephone number or address where that person or entity may be
!Any person or business using autodialers or prerecorded (artificial)
voice calls, including calls placed to businesses, must state its
identity at the beginning of the message and its telephone number or
address during or after the message.
!Autodialer calls may not lock onto a phone line. Within five
seconds of a phone being hung up, the autodialer must release the
phone line. In some areas of the country, due to different telephone
system technologies, this release may take longer. Customers should
check with their local telephone company for additional information.
!Calls transmitting unsolicited advertisements to home or business
fax machines are prohibited unless permission has been granted to
do so or there is an established business relationship. Any message
sent to a fax machine must include the date and time the
transmission is sent, identity of the sender, and the telephone number
of the sender or the sending fax machine.
The FCC’s initial final rule can be found in the Federal Register of October 23,
1992, on pages 48333-36. After some modification, the rule was finalized in August
42069. The Consumer and Governmental Affairs Bureau of the FCC provides
information concerning the Telephone Consumer Protection Act of 1991 and
telemarketing issues at [http://www.fcc.gov/cgb/consumerfacts/tcpa.html] (unwanted
telemarketing calls), [http://www.fcc.gov/cgb/consumerfacts/unwantedfaxes.html]
(unwanted faxes), or [http://www.fcc.gov/cgb/consumerfacts/telemarketscam.html]
2002 FCC TCPA Review. On September 12, 2002, the FCC announced that
it would review its existing telemarketing rules due to changes in telemarketing
practices and the introduction of advanced technologies, enabling new marketing
techniques. The FCC noted that these new practices and technologies have increased1
concerns about consumer privacy.
The commission sought public comment on issues such as the need to revise its
rules to more effectively follow the directions of Congress provided in the TCPA
concerning balancing privacy rights, public safety interests, and commercial freedom
of speech; revising or adding to its rules concerning autodialers, prerecorded
messages, and fax advertisements; the effectiveness of company do-not-call lists; and
the creation of a national do-not-call list. The Federal Trade Commission also
considered establishment of a national do-not-call list. However, since the FTC is
prohibited by statute from regulating certain industries (banks, credit unions, savings
and loans, common carriers, and insurance companies, for example), an FCC national
do-not-call list applies to industries not covered by an FTC list. The FCC considered
creation of a national do-not-call database during promulgation of TCPA rules in
1 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection
Act of 1991. FCC 02-250, Federal Communications Commission. Adopted: Sept. 12, 2002.
Released: Sept.18, 2002. Available via the FCC website at [http://www.fcc.gov].
1992. It decided not to create such a database at the time because of issues such as
cost, maintaining the accuracy of such a system, security of telemarketer proprietary
information, and privacy of telephone subscribers with unlisted or unpublished
numbers. Instead, the FCC required companies to maintain their own do-not-call
A summary of the FCC’s proposed rule review appeared in the Federal Register
on October 8, 2002, on pages 62667-62681. Comments relating to the review were
due by November 22, 2002. Following the Federal Trade Commission’s December
18, 2002 announcement of its amendments to the Telemarketing Sales Rule, the FCC
extended the reply comment period to January 31, 2003. The extension was to
ensure that all interested parties could take the FTC actions into account before
submitting their comments.
Call Registry. On June 26, 2003, the FCC announced that it would establish a
national do-not-call registry covering both interstate and intrastate calls. The FCC
noted that its update of the TCPA rules does not require states to discontinue their
individual do-not-call registries, but any state do-not-call registry must include the
name of any of its residents that are in the national database. States may adopt more
restrictive laws relating to intrastate telemarketing, but may not establish practices
less restrictive than the federal regulations. As with the FTC rules, consumers may
continue to request that their names be added to individual company do-not-call lists
if they so choose. On the other hand, consumers may also provide written permission
to specific companies from which they wish to receive telemarketing calls even if
they are on the national registry. The registry became effective on October 1, 2003,
when consumers could also begin registering complaints, if necessary.
Telemarketers may continue to call consumers with whom they have an
“established business relationship.” The FCC definition of established business
relationship would permit a company to contact a customer for 18 months following
a business transaction and for three months following an inquiry or application.
However, the company may not call the customer again if the customer requests to
be put on the company’s do-not-call list.
The updated TCPA rules also included additional restrictions on predictive
dialers in an attempt to reduce “dead air” and quick hang-up calls by requiring that
no more than 3% of all calls placed and answered by a person may be abandoned.
In addition, when a call is abandoned within the 3% range, the telemarketing
company must provide a prerecorded message identifying the company. Also
prohibited is the blocking of caller ID information.
Fax Rules. Under the new rules, before transmitting an unsolicited fax
“advertisement,” the sender must obtain written permission from the intended
recipient before sending the fax. However, following the release of the new fax rule,
many businesses and nonprofits felt that the language of the rule was vague and
would require them to get written permission from every one of their customers and
members before sending any kind of fax to them even if the customer or member
expected and was used to getting faxes from the company or nonprofit. According
to various companies and nonprofits, the cost of obtaining permission from
thousands of customers or members would be quite high and an administrative
burden. As a result, petitions were filed with the FCC to delay the implementation
of the rule (scheduled to go into effect on August 25, 2003) and reconsider the
language. On August 19, the FCC announced that it would postpone implementation
of the fax rule until January 1, 2005. Only implementation of the fax rule was
postponed. All other new telemarketing rules took effect as planned. As a result of
pending congressional action concerning the fax rules, the FCC released an order on
October 1, 2004, that extends its stay of the fax rules until June 30, 2005.2
Exemptions. Tax-exempt nonprofit organizations and calls concerning
political and religious speech are exempt from the FCC’s TCPA rules. In addition,
consumers may still receive calls that are not commercial in nature or do not include
unsolicited advertisements. Although banking, insurance, telecommunications, and
airline companies were exempt from the FTC’s rules, they are not exempt from these
updated FCC Telephone Consumer Protection Act rules.
Since the Federal Trade Commission had previously announced the
establishment of a national do-not-call registry, the FCC will implement its rules in
conjunction with the FTC. The FTC will administer the national database with both
agencies coordinating enforcement activities. There will not be two separate national
The FCC provides information on the updated TCPA rules at its website at
[http://www.fcc.gov/cgb/donotcall/]. A synopsis of the new FCC rules appeared in
the Federal Register on July 25, 2003, pp. 44144-44179.
Court Challenge. On July 28, 2003, the American Teleservices Association
(ATA) filed suit in the U.S. Court of Appeals for the Tenth Circuit in Denver
(American Teleservices Association v. Federal Communications Commission)
seeking a judicial review of the FCC rules establishing a national do-not-call registry.
ATA claimed that implementation of the rule could cost the industry and the
economy up to 2 million jobs and violated the First Amendment rights of
telemarketers. The court, on September 26, 2003, denied the motion to stay the
For further information on the court cases and state and national do-not-call
registries, see CRS Report RL31642, Regulation of the Telemarketing Industry: State
and National Do-Not-Call Registries, by Angie A. Welborn.
Telemarketing and Consumer Fraud and Abuse Prevention
P.L. 103-297 was signed by President Clinton on August 16, 1994. The act
directed the Federal Trade Commission to establish rules to prohibit certain
telemarketing activities. The FTC’s final Telemarketing Sales Rule (TSR) was
2 For more information on the fax advertising rules, see CRS Report RS21647, Facsimile
Advertising Rules Under the Telephone Consumer Protection Act of 1991: Background and
Status, by Patricia Moloney Figliola.
adopted on August 15, 1995. The rule covers most types of telemarketing calls and
also applies to calls consumers make in response to material received in the mail, but
it is not intended to affect any state or local telemarketing laws. The rule went into
effect on December 31, 1995.
Some of the provisions of the rule are the following:
!The rule restricts calls to the hours between 8:00 a.m. and 9:00 p.m.
!It forbids telemarketers from calling consumers if they have been
asked not to. Violations of this provision may be reported to the
state attorney general.
!It requires certain prompt disclosures, prohibits certain
misrepresentations and lying to get consumers to pay, and makes it
illegal for a telemarketer to withdraw money directly from a
checking account without the account holder’s specific, verifiable
Telemarketers calling consumers must promptly identify the seller of the
product or service, that the purpose of the call is to sell something, the nature of the
goods or services being offered, and, in the case of a prize promotion, that no
purchase or payment is required to participate or win. In addition, prior to a
consumer paying for any good or service, the consumer must be provided with
material information that is likely to affect their choice of the good or service.
Material information includes cost and quantity; restrictions, limitations, or
conditions; refund policy; and, in the case of a prize promotion, information on the
odds of winning, that there is no payment required to enter the promotion, how the
consumer may enter the promotion without paying, and information on any material
costs or conditions that may be required to receive or redeem any prize.
!Telemarketers and sellers are required to maintain certain records for
two years from the date that the record is produced. Records
includes items such as advertising and promotional materials,
information about prize recipients, sales records, employee records,
and all verifiable authorizations for demand drafts for payment from
a consumer’s bank account.
There are exceptions to the Telemarketing Sales Rule. For example, calls
initiated by a consumer that are not made in response to a solicitation, business-to-
business calls (in most cases), and sales of 900-number (pay-per-call) services and
franchises (covered by other FTC rules) are not covered. Certain types of businesses
— banks, federal credit unions, federal savings and loans, common carriers (long-
distance telephone companies and airlines), nonprofits, insurance companies, and
many types of companies selling investments — are not covered by the rule because
they are exempted from the FTC’s jurisdiction and, in most cases, are regulated by
other federal agencies. However, individuals or companies providing telemarketing
services under contract for these companies are covered. The application of the rule
can be complex. Consumers should check with state authorities or the FTC for
clarification of coverage.
With certain limitations, the FTC, the states, and private individuals may bring
civil actions in federal district courts to enforce the rule.
A statement of purpose and the text of the Telemarketing Sales Rule can be
found in the August 23, 1995, Federal Register, pages 43842-438477. Additional
FTC information concerning telemarketing is available at
[http://www.ftc.gov/bcp/menu-tmark.htm]. Complaints may be filed electronically
at this site.
FTC Telemarketing Sales Rule Review. During 2000, as required by this
act, the FTC began conducting a review of the rule’s effectiveness, its overall costs
and benefits, and its regulatory and economic impact since its adoption. In addition,
the FTC examined telemarketing and its impact on consumers over the past two
decades.3 Results of the review will be reported to Congress. For further
information, see [http://www.ftc.gov/bcp/rulemaking/tsr/tsr-review.htm].
On January 22, 2002, the FTC announced substantial proposed changes to the
TSR. Among the FTC’s proposed changes was the creation of a national do-not-call
list. If enacted, consumers would place their name on the list by calling a toll-free
telephone number. It would then be against the law for a telemarketer to call those
consumers. Because certain businesses are exempt from the TSR (see above),
notably those that consumers have given permission to contact them, placing a name
on the list would not stop all telemarketing calls. Details concerning the procedures
and operation of the national list were addressed during review of the FTC proposal.4
In addition, the FTC proposed that telemarketers be prohibited from blocking
caller ID systems, that telemarketers be prohibited from obtaining a consumer’s
credit card or other account number from anyone but the consumer or from
improperly sharing that number with anyone else for use in telemarketing, and that
use of predictive dialers resulting in “dead air” (i.e., no one on the line) violates the
The full text of the FTC Notice of Proposed Rulemaking and additional
information is available at this site: [http://www.ftc.gov/opa/2002/01/donotcall.htm].
In addition, the notice was published in the Federal Register on January 30, 2002,
on pages 4491-4546. The FTC accepted comments on the proposed TSR rule
changes until March 29, 2002.
On May 24, 2002, the FTC announced that it had not yet made any final
determination regarding the establishment of a national do-not-call registry.
However, concerned with funding for operation of the registry should it be
implemented, the FTC amended its January 22 proposal to include the assessment of
user fees on all telemarketers that access or obtain data from any national do-not-call
registry that might be established. The commission also reiterated that it is not
proposing any charges to consumers for adding their names to the registry.
3 Federal Register, February 28, 2000, pp. 10428-10434.
4 For more information on do-not-call lists, see CRS Report RL31642, Regulation of the
Telemarketing Industry: State and National Do-Not-Call Registries, by Angie A. Welborn.
Currently, the FTC estimates that development and implementation of a national list
would cost approximately $5 million. Of that, approximately $3 million would come
from user fees. According to the FTC, there are approximately 3,000 telemarketers
that would be required to pay the user fee.
The Direct Marketing Association (DMA), a national trade association serving
the direct marketing industry, believes this amendment to the original proposal would
be counterproductive to the industry’s efforts at self-regulation and would be a
financial burden to telemarketers. The DMA currently operates the DMA Telephone
Preference Service, an industry-run national do-not-call list with 4.5 million names
on the list.
The full text of the Notice of Proposed Rulemaking concerning the proposed
user fees may be found in the Federal Register of May 29, 2002, on pages 37362-
37369. The FTC announcement of the notice with links to the text of the proposal
may be found at [http://www.ftc.gov/opa/2002/05/fyi0229.htm]. Comments on this
issue were accepted until June 28, 2002.
2002 FTC Creation of a National Do-Not-Call Registry and Other
Rule Changes. The FTC announced, on December 18, 2002, the creation of a
national do-not-call registry and changes to the Telemarketing Sales Rule. Extensive
information on TSR changes is available at the FTC website at
[http://www.ftc.gov/bcp/conline/edcams/donotcall/index.html]. The FTC press
release announcing the TSR changes may be found at
[http://www.ftc.gov/opa/2002/12/donotcall.htm]. The changes only affect companies
regulated by the FTC and only those telemarketing calls crossing state lines.
Individual state laws and regulations cover telemarketing practices within a state.
Notably, long-distance phone companies, banks, credit unions, airlines, and insurance
companies are not covered by FTC telemarketing regulations. However, with the
FCC’s June 26, 2003 announcement of its revised TCPA rules and national do-not-
call registry, these categories of companies are covered by FCC telemarketing
In addition, political solicitations are not covered by the revised TSR. The
Final Amended Rule may be found on pages 4579-4679 of the January 29, 2003,
Federal Register and also at [http://www.ftc.gov/os/2002/12/tsrfinalrule.pdf], the
FTC website. Some provisions of the amended rule became effective on March 31,
following petitions to the FTC, the effective date of some provisions was extended5
to October 1, 2003.
Among the announced FTC changes was the National Do-Not-Call Registry.
After reviewing more than 60,000 public comments, the FTC decided to establish a
national do-not-call registry for consumers who want to stop most unwanted
5 See Federal Register, March 26, 2003, pp. 14659-14660, and April 4, 2003, pp. 16414-
telemarketing calls. The registry was not implemented immediately because it
required funding approval from Congress.
Early in 2003, in two separate pieces of legislation, Congress provided the FTC
with authorization to develop and implement the national do-not-call registry.
Do-Not-Call Implementation Act, 2003. P.L. 108-10 (H.R. 395), the Do-
Not-Call Implementation Act, signed by President Bush on March 11, 2003, provided
the FTC with the authorization for establishing the fees. In addition, this act permits
the fees to be collected for FY2003 through FY2007; directs the FCC to issue a final
rule in its Telephone Consumer Protection Act proceeding no later than 180 days
after the enactment of the act; requires the FTC and FCC to issue reports to Congress
on regulatory coordination between the two agencies within 45 days after the FCC
issues its final rule; and requires annual reports to Congress from the FTC and FCC
for FY2003 through FY2007. The annual reports must address the effectiveness of
the national registry, the number of consumers participating, the number of persons
paying fees to access the registry, the amount of the fees, an analysis of coordinating
the operation of the national do-not-call registry with state do-not-call lists, FTC and
FCC coordination, and a review of any FTC and FCC enforcement proceedings.
Consolidated Appropriations Resolution, 2003. In the Consolidated
Appropriations Resolution, 2003 (H.J.Res 2, P.L. 108-7) signed by the President on
February 20, 2003, Congress authorized the FTC to collect up to $18,100,000 to
develop the national do-not-call registry. Following passage of this act, the FTC
awarded a $3,500,000 contract to AT&T Government Solutions (a division of
AT&T) to build and operate the registry.
A separate registration must be completed for each phone number and, if using
the toll-free number, a consumer must make the call from the number to be placed
on the registry. A consumer with three telephone lines (cell phone numbers may be
registered) would have to register each number separately. A number remains on the
list for five years and the listing may be renewed. There will be no charge to
consumers, but there will be a charge to telemarketers for access to the names on the
list. Telemarketers who ignore the registry could be fined up to $11,000 for each
violation. Adding a phone number to the registry will not stop all telemarketing
Under the original rule revision, telemarketers were to update their calling lists
every three months to remove telephone numbers on the national registry from their
calling lists. The Consolidated Appropriations Act of 2004 (H.R. 2673, P.L. 108-
199), signed on January 23, 2004, directed the FTC to amend the TSR within 60 days
of enactment of the act to require “scrubbing” of telemarketers’ calling lists once a
month. The FTC published a final rule requiring telemarketers to remove telephone
numbers registered in the do-not-call registry from their call lists no more than 31
days prior to making a telemarketing call. The rule was in the Federal Register on
March 29, 2004, on pages 16368-16374.
There is an exemption in the amended TSR for telemarketers who have an
established business relationship with a customer. The FTC states that there is an
established business relationship “... if the customer has purchased, leased, or rented
goods or services from the company within 18 months preceding the call, or if the
consumer has submitted an application or made an inquiry to the company within the
three months preceding the call.”6 Even so, a consumer may still make a specific
request to the company not to call. In addition, if a consumer wants to receive calls
from a specific company, he/she may contact the company and give it permission to
call even if the phone number is on the national registry. Companies will be required
to continue their own do-not-call lists and must add names to that list if requested to
do so by consumers.
!“Dead Air” Calls — According to the FTC, dead air calls (or call
abandonment) violate the amended TSR. However, the FTC
decided to give telemarketers a “safe harbor” on dead air calls if they
meet specific requirements. “... businesses will not be liable for
violating this provision of the rule if they: (1) ensure that no more
than three percent of calls that are answered by a person are
abandoned, measured per day per calling campaign; (2) allow each
called consumer’s telephone to ring for at least 15 seconds or four
rings before disconnecting; (3) connect each call to a sales
representative within two seconds of the consumer’s greeting, or, if
a sales representative is not available to speak with the consumer
within two seconds of the call being answered, they play a recorded
message stating the name and telephone number of the seller—the
message cannot include a sales pitch; and (4) maintain records
showing compliance with the requirements for abandonment rate,
ring time and recorded message.”7 This took effect October 1, 2003.
!Caller ID — Starting January 29, 2004, telemarketers must transmit
their telephone number to a consumer’s caller ID service. In
addition, if technically possible, the telemarketer must transmit their
company’s name as well. Telemarketers have one year to come into
compliance with the caller ID provisions.
!Billing Authorization — Telemarketers will be prohibited from
receiving unencrypted consumer account numbers, except when used
for processing a payment for goods or services or a charitable
contribution according to the terms of a transaction approved by the
consumer; unauthorized billing is prohibited without a consumer’s
informed consent; all material terms of any free trial period offer that
involves some automatic charge at the end of the trial period must
be disclosed; and any payment methods involving demand drafts,
phone checks, charges to mortgage or utility accounts, or any other
novel or unfamiliar method must be specifically and verifiably
authorized by the customer.
6 See “FTC Announces Final Amendments to Telemarketing Sales Rule, Including National
‘Do Not Call’ Registry,” FTC Press Release, Dec. 18, 2002. Available at
[ h t t p : / / www.f t c.go v/ opa/ 2002/ 12/ donot cal l .ht m] .
7 “FTC Announces Final Amendments to Telemarketing Sales Rule ...”
National Do-Not-Call Registry Calendar
June 27, 2003
Consumers throughout the country started adding their numbers to
the national registry via the Web at [http://DONOTCALL.GOV] on
Friday, June 27. Consumers in states west of the Mississippi,
including Louisiana and Minnesota, started registering by phone on
the same day by calling toll-free 1-888-382-1222 (TTY 1-866-290-
July 7, 2003
Phone registration opened for the entire country.
Consumers registering via the Web must provide an e-mail address.
An e-mail will be sent by the registry to that address and, within 72
hours, a response must be sent to the registry to complete the
registration process. Consumers registering by phone must call from
the telephone number they want to register. A separate call must be
made from each telephone line that is to be listed on the registry.
Those registered remain on the list for five years or until they change
their phone number. Registrations must then be renewed.
Individual companies and states will continue to maintain their own
The registry was made available to telemarketers.
October 1, 2003
The FTC, FCC, and the states were scheduled to begin enforcing the
provisions of the amended TSR and TCPA. Telemarketers must
check and update their lists at least once every 90 days.
Note: As a result of court cases described elsewhere in this report,
the registry was closed in late September. Following a U.S. court of
appeals ruling on October 7, 2003, the FTC reopened the registry in
October. Telemarketers that already have the list are expected to
immediately comply with the new telemarketing rules.
October 9, 2003
The registry reopened for consumers.
October 10, 2003
Telemarketers could access the registry.
October 17, 2003
Telemarketers that did not already have the list had to stop calling
numbers on the list.
!Charitable Solicitations — Telemarketers soliciting charitable
contributions are exempt from complying with provisions of the
national registry, but must not call consumers who have specifically
contacted them and asked not to be called. However, those
soliciting charitable contributions must promptly reveal the name of
the organization making the call and that the purpose of the call is to
Fees for Industry Access to the National Registry. The FTC
announced, on July 29, 2003, an amendment to the TSR to establish fees for industry
access to the National Do-Not-Call Registry. There will be no charge for the first
five area codes of data. Access to a single area code will cost $25. The maximum
annual fee will be $7,375 to access the entire country. Companies exempted from
the TSR (political fund-raisers, charitable solicitations, and those conducting surveys)
will be provided access to the registry at no cost to encourage them to voluntarily
scrub their lists.
Information on fees charged for access to the registry and a guide for
telemarketers and sellers about the TSR may be found at the FTC website at
[http://www.ftc.gov/opa/2003/07/tsrfeesfrn.htm]. A synopsis of the fee rule was
published in the Federal Register on July 31, 2003, pp. 45134-45144.
More extensive information on the amendments to the Telemarketing Sales
Rule, including the text of the amended rule, is available from the FTC website at
[ http://www.ftc.gov/bcp/conline/edcams/donotcall/index .html] .
Court Challenges. On January 29, 2003, the DMA filed suit in the U.S.
District Court for Western Oklahoma (U.S. Security v. Federal Trade Commission),
alleging that the FTC’s actions violated the First Amendment right to advertise and
that the FTC had overstepped its statutory authority with its proposal of the national
do-not-call registry. The court, on September 23, 2003, found that the FTC had
exceeded its statutory authority in creating a national do-not-call registry. The court
upheld other provisions of the FTC’s telemarketing sales rule. In response to the
court’s ruling, Congress passed a bill (H.R. 3161) on September 25 to clarify the
FTC’s authority. On September 29, President Bush signed the legislation, which
became P.L. 108-82.
Also, on January 29, 2003, the American Teleservices Association and two
telemarketing companies filed suit in the U.S. District Court for Colorado
(Mainstream Marketing Services, TMG Marketing, and American Teleservices
Association v. Federal Trade Commission). On September 25, 2003, the U.S.
District Court for Colorado ruled that the national registry, as established by the FTC,
was unconstitutional and violated the First Amendment. The FTC filed on
September 26 a motion for an emergency stay pending appeal, with the district judge
issuing the order. The motion was denied on September 29. On that date, the same
district judge issued a second order that warned the FTC not to assist the FCC with
implementation of the national do-not-call registry.
Also, on September 26, the FTC also filed a notice of appeal with the U.S. Court
of Appeals for the Tenth Circuit in Denver. On October 7, the court of appeals
issued a stay pending appeal of the district court’s order. The court of appeals did not
reverse the district court’s order and did not deal with the constitutionality of the do-
not-call registry. The case continued in the court of appeals. Oral arguments were
heard on November 10, 2003. As a result of the stay, FTC officials began enforcing
the new telemarketing rules. On February 17, 2004, the Denver Appeals Court
upheld the constitutionality of the national do-not-call list and found that the
telemarketing rules were valid regulation of commercial speech. Opponents of the
ruling appealed to the U.S. Supreme Court. The Supreme Court rejected that appeal
on October 4, 2004.
For further information on the court cases and state and national do-not-call
registries, see CRS Report RL31642, Regulation of the Telemarketing Industry: State
and National Do-Not-Call Registries, by Angie A. Welborn.
In addition, it has been reported that the telemarketing industry may have to pay
millions of dollars for obtaining the FTC and separate state registries, new hardware
and software, and training for sales personnel. Some in the telemarketing industry
have said that very small firms may be forced out of business.
Senior Citizens Against Marketing Scams Act of 1994
This act was Title XXV of the Violent Crime Control and Law Enforcement Act
of 1994, P.L. 103-322, and was signed by President Clinton on September 13, 1994.
It included provisions that increased penalties for telemarketing fraud against people
over 55 years old. Provisions of this law allow imprisonment up to an additional five
years for certain telemarketing crimes or up to 10 additional years if 10 or more
persons over the age of 55 were victimized or the targeted persons were over 55.
Also, the act requires that full restitution be paid to victims and directs the U.S.
Attorney to enforce any restitution order.
Telecommunications Act of 1996
P.L. 104-104, signed by President Clinton on February 8, 1996, was a
substantial amendment to the 62-year old Communications Act of 1934. Section 701
of the act closed a loophole that allowed information service providers and
telemarketers to connect callers to “pay-per-call” services even though the callers had
initially dialed a toll-free telephone number.
Telemarketing Fraud Prevention Act of 1997
P.L. 105-184 was signed by President Clinton on June 23, 1998, and attempts
to deter fraudulent telemarketers by raising the federal criminal penalties for
telemarketing fraud and permitting the seizure of a criminal’s money and property
to make restitution to victims. Also, if persons over the age of 55 were targets of the
fraudulent telemarketing activities, criminals may be sentenced to additional prison
Protecting Seniors from Fraud Act
President Clinton signed the Protecting Seniors from Fraud Act, P.L. 106-534,
on November 22, 2000. This act finds that an estimated 56% of the names on calling
lists of illicit telemarketers are individuals aged 50 or older and that, as a result, older
Americans are often the target of telemarketing fraud.
Among other things, this act
!authorizes $1 million for each of the fiscal years 2001 through 2005
to be appropriated to the Attorney General (Department of Justice)
for senior fraud prevention program(s) and directs the Comptroller
General to submit a report to Congress on the effectiveness of the
!directs the Department of Health and Human Services to provide and
disseminate within each state information that both educates and
informs senior citizens about the dangers of fraud, including
telemarketing fraud. This information may be distributed via public
service announcements, printed matter, direct mailings, telephone
outreach, or the Internet.
!instructs the Attorney General to conduct a study of crimes against
senior citizens. Among other issues, the report must address the
nature and extent of telemarketing fraud against seniors.
!directs the Attorney General, not later than two years after the date
of enactment of this act, to include statistics relating to crimes
against seniors in each National Crime Victimization Survey.
!expresses the sense of the Congress that state and local governments
should incorporate fraud avoidance information and programs into
programs that provide assistance to the aging.
Crimes Against Charitable Americans Act of 2001
The Crimes Against Charitable Americans Act of 2001 was passed as Section
1011 of the Uniting and Strengthening American by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT),
P.L. 107-56, and was signed by President George W. Bush on October 26, 2001.
Passed following the September 11 attacks, Section 1011 amends the
Telemarketing and Consumer Fraud and Abuse Prevention Act (see above) to expand
the coverage of the FTC’s Telemarketing Sales Rule to apply to calls made to solicit
charitable contributions. The rule had previously covered only calls made to sell
goods and services. Charitable organizations are exempt from the rule. Although
this law does not remove that exemption, it does permit the FTC to take action
against a for-profit company that fraudulently, deceptively, or abusively solicits
charitable contributions for charities. In addition, the act increases the penalty for
impersonating a Red Cross member or agent.
What Consumers Can Do
Simply say, “No, thank you. I’m not interested.” No one has to make any
special excuse or listen to the presentation of the person on the line.
Consumers can go to a local library and ask for help in finding information on
telemarketing and telemarketing scams. The library’s Internet connection (if
available) will provide access to the websites listed in this report. If no Internet
connection is available, one may contact the FTC to request information about the
Telemarketing Sales Rule.
Federal Trade Commission
Public Reference Branch
Sixth Street and Pennsylvania Avenue, NW
Washington, DC 20580
[ h ttp://www.ftc.gov]
Contacting the local Better Business Bureau (BBB) to obtain information about
telemarketing and the various types of telemarketing scams is another option. The
Better Business Bureau also provides information at its website
[ http://www.bbb.org/ alerts/article.asp? ID=448] .
If a letter or postcard arrives or there is a message on a home answering machine
stating that someone has won a free trip or a prize or a sweepstakes, be cautious.
Consumers should check the area code for the number that must be called to claim
a prize or respond to a telemarketing call before they make the call. Most Caribbean
countries and Canada have area codes that are integrated into the U.S. telephone
system and may be reached by direct dialing without using separate country codes.
Simply making a call to certain area codes may incur substantial long-distance
charges. Those charges will depend upon the area code called, long-distance carrier,
length of call, a customer’s long-distance calling plan (or lack thereof), and other
factors. The toll-free telephone prefixes used in the United States are 800, 877, 888,
A list of area codes and the state, territory, or country served by a particular area
code may be viewed at the website of the North American Numbering Plan
Administration (NANPA), the administrator of the North American telephone
numbering plan. The website is [http://www.nanpa.com/area_codes/index.html].
Also, the front section of a local phone book usually contains maps and listings
identifying area codes. If a particular code is not listed, customers should call the
phone company to determine what area an unfamiliar area code serves. According
to an FCC fact sheet, there are approximately 317 area codes in service today. About
207 of them are within the United States. Area codes are constantly being added or
If people respond to a prize announcement, they should not give out credit card,
bank account, or Social Security numbers or send money to cover taxes, customs
fees, etc., unless they completely understand all charges, procedures, and details
concerning the offer. There are many different types of telemarketing scams
involving many different types of products and services. For example, some of the
known scams deal with stocks and other investments, automatic debit, charitable
donations, easy credit, credit cards, credit repair, advanced fee loans, magazine
subscriptions, international telephone calls, prizes, sweepstakes, work-at-home
schemes, and travel. If there is doubt, people can request that written documentation
explaining the prize, product, or service be forwarded to them. Any reputable
telemarketer will send the information. Consumers should take their time and not be
pressured into responding immediately.
Reporting Incidents to the Authorities/Filing Complaints
If a consumer believes that he/she is a victim of a telemarketing scam or that a
telemarketing concern is violating existing rules, they should report the incident(s).
First, contact a local or state consumer affairs office or the state attorney general’s
office. The FTC’s Telemarketing Sales Rule permits local authorities to prosecute
telemarketing scam operators who operate across state lines, and individual states
may have passed their own laws or established regulations concerning telemarketing.
Federal Trade Commission. Federal authorities may also be contacted.
Victims of false or deceptive telephone solicitation sales practices may file a written
complaint with the FTC by sending a description of their situation to:
Federal Trade Commission
Consumer Response Center
Washington, DC 20580
An electronic complaint form is available at the Do-Not-Call registry
website [https://www.donotcall.gov/Complain/ComplainCheck.aspx]. Also,
information on complaints is available at [http://www.ftc.gov]. Click on “File
a Complaint” at the top of the screen.
The information that is provided to the FTC may help the agency establish a
pattern of violations that may require action. However, the FTC generally does not
get involved in individual disputes with telemarketing companies.
The FTC also provides information about telemarketing fraud through its Ditch
the Pitch Campaign at its website. Information is provided for consumers on
protecting themselves and for businesses on complying with FTC regulations.
Complaints about telemarketing practices may be filed at this site; see
[ h ttp://www.ftc.gov/bcp/conline/ed cams/telemarketing/index .html] .
National Fraud Information Center. Suspected fraudulent telemarketing
activities may also be reported to the National Fraud Information Center (NFIC), a
private, nonprofit organization that assists consumers with telemarketing complaints.
NFIC forwards all appropriate complaints to the FTC. One may obtain information
on telemarketing or report suspicious incidents to NFIC via telephone, mail, or the
National Fraud Information Center
P.O. Box 65868
Washington, DC 20035
[ h ttp://www.fraud.org]
Federal Communications Commission. One may also contact the
Federal Communications Commission if they believe violations of the Telephone
Consumer Protection Act have occurred. Send a letter describing the complaint in
Federal Communications Commission
Consumer & Governmental Affairs Bureau
445 Twelfth Street, NW
Washington, DC 20554
Complaints may be filed online at the FCC website:
[ h ttp://www.fcc.gov/cgb/complaints.html]
Information is available at the following FCC Web pages:
[ h ttp://www.fcc.gov/cgb/consume rfacts/telemarketscam.html]
Ask to Be Placed on a Do-Not-Call List. If someone wants to be placed
on a firm or individual’s do-not-call list, they should state clearly and firmly to the
caller that their name is to be added to the list. The caller must take the name, add
it to their list, and keep it there for 10 years. In addition, consumers should take
down the name of the caller, the name of the firm or individual for whom they are
making the call, and the address and telephone number where they can be reached.
Note the date and time and keep a record of any additional calls that are received (if
any) from the same source. If additional calls from the same source continue, a
consumer may consider filing a suit in small claims court.
State Do-Not-Call Lists. Several individual states have passed laws
establishing do-not-call lists within the state. Consumers should contact a local
consumer affairs office, Better Business Bureau, or an appropriate state office to find
out the particulars of their state’s do-not-call list or if such a state list exists. In some
cases, there may be a (monthly or annual) charge to be added to the list. If charges
are assessed, state law, not FCC or FTC regulations, will determine the charges.
The December 18, 2002, FTC announcement of a national do-not-call registry
does not mean the end of individual state do-not-call lists. The FTC registry covers
only interstate calls. Each state may regulate telemarketing practices within its
borders. As a result, a particular state’s list may cover telemarketing firms operating
solely within the borders of the state, while the same firms would not be covered by
the FTC’s national registry since their calls do not cross state lines. Electronic
transfer of individual state lists to the national do-not-call registry is possible. If such
a transfer were done, individuals from a transferred state list may not need to register
with the FTC. The transfer would automatically add names from a state list to the
national registry. However, states are not required to transfer their lists to the FTC.
For information on whether or not a state list has been transferred, contact state
The FTC provides information on the sharing of state do-not-call list
information between several states and the federal government at
[http://www.ftc.gov/bcp/conline/pubs/alerts/dncalrt.htm]. In addition, the DMA
provides contact information for state do-not-call lists at its website [http://www.the-
dma.org/ government/donotcalllists.shtml] .
Direct Marketing Association. The Direct Marketing Association, a
national trade association serving the direct marketing industry, maintains a national
do-not-call list. If someone adds their name to the national list, it will take a few
months for it to take effect, and the name will go only to the companies who
subscribe to the DMA’s list service. Telemarketing companies are not required to
subscribe to the service, and getting a name on any do-not-call list does not remove
it from all telemarketers’ lists. The list is updated four times per year, in January,
April, July, and October. There is no charge to add a name to the list. Send name,
address, and home telephone number (including area code) to:
Telephone Preference Service
Direct Marketing Association
P.O. Box 9014
Farmingdale, NY 11735-9014
In some instances, telemarketers use automated dialing mechanisms that call
every number in a targeted geographic area or with a certain prefix. If someone is in
one of those areas or has the designated telephone prefix, they will not escape the call
even if their name is on a do-not-call list. Even unlisted numbers are called in these
situations. The DMA has established operational guidelines for its members using
automatic dialing equipment and software.
The DMA also offers a free Mail Preference Service (MPS) for those who wish
to receive less advertising mail at home. As with the Telephone Preference Service,
to register for the MPS, a postcard or letter providing name, home address, and
signature must be sent to the DMA.
Mail Preference Service
Direct Marketing Association
P.O. Box 9008
Farmingdale, NY 11735-9008
DMA Privacy Promise. On July 7, 1999, the DMA announced
implementation of its “DMA Privacy Promise to American Consumers.” This effort
requires all DMA members to adhere to a set of consumer privacy protection
measures. These measures include
!disclosing to consumers when contact information about them may
be shared with other marketers;
!providing a means for consumers to opt-out of any information
!honoring any individual consumer’s request not to receive any
further solicitations from the marketer; and
!requiring member companies to use the DMA’s Mail Preference and
Telephone Preference Services to maintain updated marketing lists
of consumers who have chosen to place their names on these lists.
DMA members were given reasonable time to comply, and through the use of
secret shoppers, decoys, review of consumer complaints, and random staff contacts,
the DMA seeks to assure that its members comply with these measures. If a member
refuses to correct its procedures when asked to do so, the DMA board may expel the
company and make its actions public.
In addition, the DMA, in conjunction with the FTC and FCC, has developed a
Web page providing advice to consumers who shop by phone. The site provides
shopping tips, information on federal laws and regulations, and information on filing
The DMA also provides a website where complaints concerning receipt of
telemarketing calls may be placed:[http://www.the-dma.org/review/complaint.shtml].
The Direct Marketing Association
1120 Avenue of the Americas
New York, NY 10036-6700
American Teleservices Association. The American Teleservices
Association (ATA) is a national association representing call centers, trainers,
consultants, and equipment suppliers in the telemarketing industry. ATA advocates
for its members’ interests in both federal and state legislative bodies, provides
educational opportunities for its members, and acts as the industry’s information
clearinghouse. In addition, ATA has established a code of ethics for its members.
American Teleservices Association
3815 River Crossing Parkway
Indianapolis, IN 46240
[ h ttp://www.ataconnect.org]