Order Code RL31642
Report for Congress
Received through the CRS Web
Regulation of the Telemarketing
Industry: State and National
Do Not Call Registries
Updated January 31, 2003
Angie A. Welborn
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

---

Regulation of the Telemarketing Industry: State and
National Do Not Call Registries
Summary
Under current federal law, companies that engage in telephone solicitation or
telemarketing must maintain a list of consumers who ask not to be called. While
there are regulations concerning how such lists are to be maintained and for how
long, no federal agency currently oversees the maintenance of the company-specific
do not call lists. However, pending congressional approval of funding, the Federal
Trade Commission may soon begin registering consumers for inclusion on the
Commission’s nationwide do not call registry. In addition to the federal regulations,
more than twenty states have laws that create state-wide do not call registries that are
periodically updated and must be utilized by telemarketers doing business in the
state.
This report will discuss current federal regulation of the telephone solicitation
industry as well as state laws creating do not call registries.1 Recent federal
legislation, including H.R. 395 (reported January 29, 2003), as well as recent
activities by the Federal Trade Commission and the Federal Communications
Commission, will also be discussed. This report will be updated as events warrant.
1 For additional information on federal telemarketing laws and what consumers can do to
prevent unwanted telemarketing calls, see CRS Report RL30763, Telemarketing: Dealing
With Unwanted Telemarketing Calls, by James R. Riehl.

---

Contents
Current Federal Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Telephone Consumer Protection Act of 1991 . . . . . . . . . . . . . . . . . . . . 1
Telemarketing and Consumer Fraud and Abuse Prevention Act . . . . . . 2
Telemarketing Sales Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
States Laws Establishing Do Not Call Registries . . . . . . . . . . . . . . . . . . . . . 3
Recent Federal Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Telemarketing Intrusive Practices Act of 2001 . . . . . . . . . . . . . . . . . . . 4
Telemarketing Victims Protection Act . . . . . . . . . . . . . . . . . . . . . . . . . 5
Telemarketing Relief Act of 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Do-Not-Call Implementation Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regulatory Actions Related to Telemarketing . . . . . . . . . . . . . . . . . . . . . . . . 7
FTC Final Amendment to Telemarketing Sales Rule . . . . . . . . . . . . . . 7
Pending Legal Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
FCC Notice of Proposed Rulemaking . . . . . . . . . . . . . . . . . . . . . . . . . . 8

---

Regulation of the Telemarketing Industry:
State and National Do Not Call Registries
Current Federal Law
Both the Federal Communications Commission (FCC) and the Federal Trade
Commission (FTC) have promulgated rules that require persons or businesses that
engage in telephone solicitations to maintain do not call lists.2 The current rules do
not require the establishment or maintenance of a central nation-wide do not call list.3
Telephone Consumer Protection Act of 1991. The Telephone Consumer
Protection Act of 1991 directed the Federal Communications Commission to initiate
a rulemaking proceeding “concerning the need to protect residential telephone
subscribers’ privacy rights to avoid receiving telephone solicitations to which they
object.”4 The Commission was to develop regulations to implement “the methods
and procedures that the Commission determines are most effective and efficient” to
accomplish the purposes of the Act.
Under the Act, the FCC could have established a “single national database to
compile a list of telephone numbers of residential subscribers who object to receiving
telephone solicitations, and to make that compiled list and parts thereof available for
purchase.”5 However, the FCC chose to require businesses and persons engaged in
the telephone solicitation industry to maintain individual do not call lists, rather than
establishing a single national list.
The FCC’s current rules require persons who initiate any telephone solicitation
to a residential telephone number to institute procedures for “maintaining a list of
persons who do not wish to receive telephone solicitations made by or on behalf of
that person or entity.”6 The rules also establish minimum standards for maintenance
of such lists, including the establishment of a written policy which is to be available
2 The Federal Trade Commission and the Federal Communications Commission have
jurisdiction over different types of entities. For example, the Federal Trade Commission’s
regulations do not apply to common carriers, while the Federal Communications
Commission would have jurisdiction over common carriers such as telephone companies.
See 15 U.S.C. 45(a)(2); 47 U.S.C. 151 et seq.
3 See infra regarding recent regulatory actions by the Federal Trade Commission and a
notice of proposed rulemaking from the Federal Communications Commission regarding
nationwide do not call registries.
4 47 U.S.C. 227(c)(1).
5 47 U.S.C. 227(c)(3).
6 47 CFR 64.1200(e)(2).

---

CRS-2
on demand, the training of personnel engaged in telephone solicitation, the recording
of do not call requests, and disclosure of the identity of the telephone solicitor.7 Do
not call requests must be honored for 10 years from the time the request is made.8
Calls made to a person with whom the caller has an established business
relationship, as well as calls made by or on behalf of a tax-exempt non-profit
organization, are exempt from the rules.9 In addition to enforcement by the FCC,
actions for violations of the Act and subsequent rules may be brought by state
attorneys general.10
Telemarketing and Consumer Fraud and Abuse Prevention Act. The
Telemarketing and Consumer Fraud and Abuse Prevention Act directed the Federal
Trade Commission to “prescribe rules prohibiting deceptive telemarketing acts or
practices and other abusive telemarketing acts or practices.”11 The FTC was
instructed to include in the rules “a requirement that telemarketers may not undertake
a pattern of unsolicited telephone calls which the reasonable consumer would
consider coercive or abusive of such consumer’s right to privacy.”12
Telemarketing Sales Rule. In response to this directive, the FTC
promulgated the Telemarketing Sales Rule.13 Under the Telemarketing Sales Rule,
it is an abusive telemarketing act or practice for a seller to cause a telemarketer to
initiate “an outbound telephone call to a person when that person previously has
stated that he or she does not wish to receive an outbound telephone call made by or
on behalf of the seller whose goods or services or being offered.”14
The rule includes a safe harbor from liability whereby sellers or telemarketers
will not be held liable for violations that result from error if they have complied with
certain requirements set forth in the rule. They may take advantage of the safe harbor
by establishing procedures, training personnel in those procedures, and maintaining
a list of persons who have asked not to be called.15
Certain acts and practices are exempt from the rule, including calls between a
telemarketer and any business, unless the calls involve the retail sale of nondurable
7 Id.
8 Id.
9 47 CFR 64.1200(f)(3).
10 47 U.S.C. 227(f).
11 15 U.S.C. 6102(a)(1).
12 15 U.S.C. 6102(a)(3)(A).
13 16 CFR Part 310.
14 16 CFR 310.4(b)(1)(ii). For information on recent amendments to the TSR, see infra
regarding recent regulatory actions by the Federal Trade Commission.
15 16 CFR 310.4(b)(2).

---

CRS-3
office or cleaning supplies.16 The FTC is primarily responsible for enforcing the rule,
though actions may also be brought by state attorneys general and private
individuals.17
States Laws Establishing Do Not Call Registries
More than twenty states have enacted or considered laws to establish state-wide
do not call registries.18 The state registries are similar to the lists that telemarketers
are required to maintain under current federal laws, but they are generally maintained
by a division of the state government, rather than by the telephone solicitation
companies themselves. Two states - Maine and Wyoming - do not maintain lists,
rather telephone solicitors are required by state law to use the list maintained by the
Direct Marketing Association.19
Funding for the establishment and maintenance of the lists varies from state to
state, with some states requiring consumers to pay a nominal fee to have their
telephone number added to the do not call registry. The required fees vary by state.
For example, in California the fee cannot exceed one dollar every three years, while
in Louisiana the fee is five dollars per year. Most states also require the telemarketers
to purchase the do not call list and require payment for periodic updates of the list.
Generally, the laws do not allow states to charge more than is required to establish
and maintain the list. Fees may be assessed on a sliding scale based upon the size of
the telephone solicitation company.
Violations of the do not call laws generally lead to administrative penalties,
though in some states consumers may bring private rights of action to recover
damages.
16 16 CFR 310.6(g).
17 15 U.S.C. 6103 and 6104.
18 The states that have enacted laws establishing do not call registries include: Alabama,
Code of Ala. § 8-19C-2; Alaska, Alaska Stat. § 45.50.475;Arkansas, A.C.A. § 4-99-404;
California, Cal. Bus. & Prof. Code § 17590; Colorado, 2001 Colo. HB 1405, to be codified
at Col. Rev. Stat. § 6-1-901; Connecticut, Conn. Gen. Stat. Ann. § 42-288a; Florida, Fla.
Stat. § 501.059; Georgia, O.C.G.A.§ 46-5-27; Idaho, Idaho Code § 48-1003A; Indiana, Ind.
Code Ann. § 24.4.7; Kentucky, K.R.S. § 367.46955; Louisiana, 2001 La. HB 175, to be
codified at La. Rev. Stat. 45:844.11; Maine, 32 M.R.S. § 4690-A; Missouri, § 407.1101
R.S.Mo.; New York, NY CLS Gen Bus § 399-z; Oregon, ORS § 464.567; Pennsylvania,
H.B. 1469, Session of 2001; Tennessee, Tenn. Code Ann. § 65-4-405; Texas, Tex. Bus. &
Com. Code Ann. § 43.001;Wisconsin, Wis. Stat. § 100.52; and Wyoming, Wyo. Stat. § 40-
12-302.
19 The Direct Marketing Association (DMA) is a trade association for telemarketers,
telephone solicitation companies, and direct mail companies. The DMA maintains a list of
persons who do not wish to receive direct mail advertising or telemarketing calls.
Consumers must contact the DMA to be placed on either list. For more information see
[http://www.the-dma.org].

---

CRS-4
Recent Federal Legislation
107th Congress
During the 107th Congress, several bills related to telemarketing were
introduced. Those bills specifically addressing the establishment of a nationwide
do not call registry are discussed below. None of the following bills were enacted,
though the USA Patriot Act did include provisions related to telemarketing on behalf
of charitable organizations.20
Telemarketing Intrusive Practices Act of 2001. S. 1881, the
Telemarketing Intrusive Practices Act of 2001, would have required the Federal
Trade Commission (FTC) to “establish and maintain a list for each State, of
consumers who request not to receive telephone sales calls; and provide notice to
consumers of the establishment of the lists.”21 Under the legislation, the FTC would
have been able contract with a state to establish and maintain the lists or may contract
with a private vendor to establish and maintain the lists, if such vendor meets certain
qualifications.22 Consumers would have notified the Commission of their desire to
be included on the list for their state.23 The Commission would have been required
to update the lists it maintains “not less than quarterly” and would have been required
to request state maintained lists annually to “ensure that the lists maintained by the
Commission contain the same information contained in the no call lists maintained
by individual states.”24
In addition to the lists to be maintained by the FTC, telephone solicitors would
have been required to maintain a list of consumers who request not to receive calls
from that particular solicitor.25 Telephone solicitors would have also been required
to place requesting consumers on their lists and “provide the consumer with a
confirmation number which shall provide confirmation of the request of the
consumer to be placed on the no call list of that telephone solicitor.”26
The Federal Trade Commission would have been required to make its lists
available to telephone solicitors, and the solicitors would have been prohibited from
making calls to consumers who are on either the Commission’s list or on the list
20 See Pub. L. 107-56, § 1011.
21 S. 1881, 107th Cong., § 3(a) (2001). The bill would also require telephone solicitors to
maintain their own lists of consumers who request not to receive calls from that particular
solicitor. The solicitors would be required to provide consumers with confirmation of their
request to be placed on the list. S. 1881, § 4.
22 S. 1881, 107th Cong., § 3(b) and (c) (2001).
23 S. 1881, 107th Cong., § 3(d)(1) (2001).
24 S. 1881, 107th Cong., § 3(e) (2001).
25 S. 1881, 107th Cong., § 4(a) (2001).
26 S. 1881, 107th Cong., § 4(b) (2001).

---

CRS-5
maintained by the solicitor.27 Violations would have been pursued by the Federal
Trade Commission as an unfair or deceptive trade practice under section 5 of the
Federal Trade Commission Act.28 Consumers would have also been allowed to bring
private rights of action for violations of the do not call provisions and other
prohibitions set forth in the legislation, as well as violations of the Federal Trade
Commission Act.29 In a private right of action, a consumer would have been able to
enjoin the violation; or recover actual monetary loss resulting from the violations, or
$500 in damages for each violation, whichever is greater.30 Damages could have
been tripled where the court found that the defendant solicitor “willfully or
knowingly” violated the provisions set forth in the legislation.31
Telemarketing Victims Protection Act. H.R. 232, the Telemarketing
Victims Protection Act, would have directed the Federal Trade Commission to
promulgate rules requiring telemarketers to “notify consumers who are called that
they have the right to be placed on either the Direct Marketing Association’s do-not-
call list or the appropriate State do-not-call list.”32 Telemarketers would have been
required to notify either the Direct Marketing Association or the appropriate state of
the consumer’s request. They would have also been required to obtain either the
Association’s list or the state list on a regular basis.33
Telemarketing Relief Act of 2002. H.R. 3911, the Telemarketing Relief Act
of 2002, would have required the Federal Trade Commission to amend its rules under
the Telemarketing and Consumer Fraud and Abuse Prevention Act to “to establish
a list of telephone numbers of consumers who have notified the Commission or
[other federal agency]34 that they do not want to receive telephone calls for marketing
27 S. 1881, 107th Cong., § 5(a)(1) and (2) (2001). The legislation would also prohibit
telemarketers from initiating a telephone sales call in the form of an electronically
transmitted facsimile or by use of an automated dialing or recorded message service. In
addition, telemarketers would be prohibited from making calls between the hours of 9:00
p.m. and 9:00 a.m. and between 5:00 p.m. and 7:00 p.m., local time at the location of the
consumer.
28 S. 1881, 107th Cong., § 7(a) (2001). Section 5 of the Federal Trade Commission Act is
codified at 15 U.S.C. 45.
29 S. 1881,107th Cong., § 7(b) (2001).
30 S. 1881, 107th Cong., § 7(b)(1)(B) (2001).
31 S. 1881, 107th Cong., § 7(b)(2) (2001).
32 H.R. 232, 107th Cong., § 2 (2001).
33 Id.
34 Four other federal agencies would have also been required to amend their rules in a
similar manner. These agencies include, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve
System, and the Federal Communications Commission. Rules promulgated by the FCC
would have applied to providers of telephone exchange services or telephone toll services.
H.R. 3911, 107th Cong., § 3.

---

CRS-6
purposes.”35 The rules would have prohibited the making of any telephone call for
telemarketing purposes to a telephone number included on the list.36 Exceptions to
the rule would have applied to charitable, political opinion polling, or other nonprofit
activities; calls from persons with whom the consumer has an existing relationship;
debt collection activities; and business to business communications.37 The FTC
would have been required to specify the manner by which consumers were to notify
the Commission of their desire to be placed on the do not call list, and the legislation
would have required the FTC make the list available to the public.38
108th Congress
Do-Not-Call Implementation Act. Following the FTC’s issuance of the
final amendments to the Telemarketing Sales Rule discussed below, the
Commission’s authority to promulgate regulations imposing fees on telemarketers
for use of the do not call list was at issue. Representatives Tauzin and Dingell
introduced H.R. 395 to authorize the Commission to promulgate regulations
“establishing fees sufficient to implement and enforce the provisions relating to the
‘do-not-call’ registry of the Telemarketing Sales Rule.”39 The Commission would
be authorized to collect fees for fiscal years 2003 through 2007.
The bill would also require the Federal Communications Commission to issue
a final rule in its current rulemaking proceeding under the Telephone Consumer
Protection Act not later than 180 days after the enactment of this Act.40 Following
the promulgation of the FCC’s rules, both the FCC and the FTC would be required
to issue a report to the House Committee on Energy and Commerce and the Senate
Committee on Commerce, Science, and Transportation analyzing the telemarketing
rules promulgated by each agency; noting any inconsistencies between the rules; and
making proposals to remedy such inconsistencies.41 Each agency would also be
required to issue annual reports regarding the effectiveness of the rules through fiscal
year 2007.42
H.R. 395 was considered by the House Committee on Energy and Commerce
and ordered to be reported on January 29, 2003.
35 H.R. 3911, 107th Cong., § 2.
36 Id.
37 H.R. 3911, 107th Cong., § 4.
38 Id.
39 H.R. 395, 108th Cong., § 2.
40 H.R. 395, 108th Cong., § 3. See infra regarding the FCC’s Notice of Proposed Rulemaking
initiated late last year.
41 H.R. 395, 108th Cong., § 4(a).
42 H.R. 395, 108th Cong., § 4(b).

---

CRS-7
Regulatory Actions Related to Telemarketing
FTC Final Amendment to Telemarketing Sales Rule. While none of the
bills discussed above were enacted, the Federal Trade Commission, acting under the
authority of the Telemarketing and Consumer Fraud and Abuse Protection Act,
issued a final rule amending the Telemarketing Sales Rule to create a national do not
call registry.43 While many provisions of the new rule take effect March 31, 2003,
the establishment and implementation of the do not call registry will not begin until
funding is approved by Congress.44 After funding is approved, the FTC estimates
that it will take approximately four months to establish the registry, with enforcement
beginning three months following implementation.
Under the new rule, it is an abusive telemarketing act or practice for a
telemarketer to initiate any outbound telephone call to a person who has placed his
or her name and/or telephone number on the do not call registry maintained by the
Commission.45 Telemarketers will be allowed to place calls to persons from whom
they have obtained “the express agreement, in writing, of such person to place calls
to that person,” and to persons with whom they have an established business
relationship.46 Consumers will not be required to pay to have their numbers placed
on the registry, and a consumer’s number will remain on the registry for five years,
or until the consumer asks to have his or her number removed or changes phone
numbers. Telemarketers will be required to pay for access to the registry,47 and will
be required to purge their lists every three months to remove any telephone numbers
that have been added to the registry.
43 The FTC announced the final rule on December 18, 2002. For more information see
[http://www.ftc.gov/bcp/conline/edcams/donotcall/index.html]. In addition to the creation
of a national do not call registry, the rule contains provisions related to the solicitation of
charitable donations, as mandated by the USA Patriot Act; new provisions on call
abandonment; provisions aimed at restricting unauthorized billing by telemarketers; and a
requirement that telemarketers transmit their telephone numbers, and if possible, their name
to a consumer’s caller ID service.
44 For effective dates see 68 FR 4580 (January 29, 2003).
45 Sec. 310.4(b)(1)(iii)(B).
46 Id. Telemarketers may call persons with whom they have an established business
relationship for up to 18 months after the consumer’s last purchase, delivery, or payment
even if the consumer’s number is on the national do not call registry. However, if the
consumer asks to be placed on the company’s do not call list, the company must honor that
request even if there is an established business relationship.
47 On May 29, 2002, the Federal Trade Commission released an additional Notice of
Proposed Rulemaking (NPR) related to the establishment of a nation wide do not call
registry. This NPR addressed the cost of establishing a nation wide do not call registry and
proposes the assessment of user fees on telemarketers and their clients for access to the
nation wide registry, should one be implemented. Under the proposal, telemarketers and
their clients would be charged a rate of $12 per year for each area code of data they use.
The proposal caps the maximum annual fee at $3,000, which would be charged for using
250 area codes of data or more. Fees for telemarketers were not addressed in the final rule
released December 18, 2002, but will likely be addressed at a later date. See 67 FR 373
(May 29, 2002).

---

CRS-8
In addition to the national registry, the new rule requires telemarketers to
continue maintaining existing company-specific do not call lists and to honor
consumer requests to be placed on that list. While telemarketers calling to solicit
charitable contributions will not be required to comply with provisions related to the
national registry, they will be required to keep company-specific lists and honor
consumer requests with regard to such lists.
Pending Legal Challenges. Legal challenges to the FTC’s final rule have
been filed by the Direct Marketing Association48 and the American Teleservices
Association.49 The suits allege that the FTC’s rule infringes on the telemarketers
rights under the First Amendment and violates the Equal Protection Clause of the
United States Constitution. The plaintiffs also argue that the FTC exceeded its
statutory authority in promulgating regulations establishing a national do not call
registry and acted in an arbitrary and capricious manner in so doing.
FCC Notice of Proposed Rulemaking. In 2002, the Federal
Communications Commission issued a Notice of Proposed Rulemaking seeking
comment on whether its current telemarketing regulations, including those related to
company-specific do not call lists, should be revised “in order to more effectively
carry out Congress’s directives in the TCPA [Telephone Consumer Protection
Act]”.50 Unlike the Federal Trade Commission, the FCC did not publish a proposed
rule. The FCC is instead seeking comments on whether and how its current rules
should be modified. With regard to the current do not call regulations, the FCC is
seeking comment on the “overall effectiveness of the company-specific do-not-call
approach in providing consumers with a reasonable means to curb unwanted
telephone solicitations.”51 The Commission is also seeking comment on whether it
should revisit its earlier determination not to adopt a nationwide do not call registry.52
48 The Direct Marketing Association, along with U.S. Security, Chartered Benefit Services,
Global Contact Services, and Infocision Management Corporation, filed suit in the United
States District Court for the Western District of Oklahoma on January 29, 2003. Case No.
Civ. 03-122-W.
49 The American Teleservices Association, along with Mainstream Marketing Services and
TMG Marketing, filed suit in the United States District Court for the District of Colorado
on January 29, 2003. Civil Action No. 03-N-0184.
50 67 FR 62667 (October 8, 2002). The NPR also seeks comment on new network
technologies that may allow consumers to avoid receiving unwanted telephone solicitations;
the Commission’s current regulations regarding the use of autodialers by telemarketers;
identification requirements; the use of artificial or prerecorded voice messages; time of day
restrictions; the current prohibition on unsolicited facsimile advertisements; and the
restrictions on calls to wireless telephone numbers.
51 Id.
52 See supra regarding current FCC regulations.

---

CRS-9
The Commission has extended the comment period until January 31, 2003, in
order to provide an opportunity for comments in light of the recent action by the
Federal Trade Commission.53
53 67 FR 78763 (December 26, 2002).

---