Order Code RL30763
CRS Report for Congress
Received through the CRS Web
Telemarketing: Dealing with
Unwanted Telemarketing Calls
Updated June 30, 2003
James R. Riehl
Information Research Specialist
Information Research Division
Congressional Research Service ˜ The Library of Congress

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Telemarketing: Dealing with
Unwanted Telemarketing Calls
Summary
In recent years, Congress has enacted seven 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.

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Contents
Federal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Telephone Consumer Protection Act of 1991 (TCPA) . . . . . . . . . . . . . . . . . 2
2002 FCC TCPA Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2003 FCC Update of TCPA Rules and Creation of a National
Do-Not-Call Registry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Telemarketing and Consumer Fraud and Abuse Prevention Act . . . . . . . . . . 5
FTC Telemarketing Sales Rule Review . . . . . . . . . . . . . . . . . . . . . . . . . 6
2002 FTC Creation of a National Do-Not-Call Registry and Other
Rule Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Do-Not-Call Implementation Act, 2003 . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Appropriations Resolution, 2003 . . . . . . . . . . . . . . . . . . . 8
Senior Citizens Against Marketing Scams Act of 1994 . . . . . . . . . . . . . . . 11
Telecommunications Act of 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Telemarketing Fraud Prevention Act of 1997 . . . . . . . . . . . . . . . . . . . . . . . 11
Protecting Seniors from Fraud Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Crimes Against Charitable Americans Act of 2001 . . . . . . . . . . . . . . . . . . . 12
What Consumers Can Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Hang Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Be Informed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Be Cautious . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Report Incidents to the Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Federal Trade Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
National Fraud Information Center . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Federal Communications Commission . . . . . . . . . . . . . . . . . . . . . . . . 15
Ask to Be Placed on a Do-Not-Call List . . . . . . . . . . . . . . . . . . . . . . . 15
State Do-Not-Call Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Direct Marketing Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. Telemarketing in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

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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)
1996
2000
2001
2002
2006
Consumer
$181.1
$252.7
$274.2
$295.3
$402.8
Business-to-
Business
$223.0
$351.0
$387.6
$424.3
$587.8
Total
$404.1
$603.7
$661.8
$719.5
$990.6
Source: Direct Marketing Association. Economic Impact: U.S. Direct and Interactive Marketing
Today, 2002, Executive Summary. [http://www.the-dma.org/library]
Federal Laws
In recent years, eight 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.

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CRS-2
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
consumers.
Some of the provisions of the FCC rules resulting from this Act are as follows:
(1) 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.
(2) Telephone solicitations to private residences may only be made between the
hours of 8 a.m. and 9 p.m.
(3) 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 such calls.
(4) 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.
(5) 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 contacted.
(6) 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.
(7) Autodialer calls may not lock onto a phone line. Within 5 seconds of a
phone being hung up, the autodialer must release the phone line. In some areas of

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CRS-3
the country, due to different telephone system technologies, this release may take
longer. Customers should check with their local telephone company for additional
information.
(8) 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
1995 and published in the Federal Register of August 15, 1995, on pages 42068-
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]
(telemarketing scams).
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 increased
concerns about consumer privacy.1
The Commission will seek 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 is also
currently considering 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, if established, may apply 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 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 lists.
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
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 Web site at [http://www.fcc.gov].

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CRS-4
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.
2003 FCC Update of TCPA Rules and Creation of a National Do-Not-
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 becomes effective on October 1, 2003,
and consumers may begin registering complaints, if necessary, at that time.
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, and companies must
obtain written permission from customers before sending fax advertisements to them.
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
registries.

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CRS-5
The FCC provides information on the updated TCPA rules at its Web site at
[http://www.fcc.gov/cgb/donotcall].
Telemarketing and Consumer Fraud and Abuse Prevention
Act
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
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:
(1) The rule restricts calls to the hours between 8 a.m. and 9 p.m.
(2) 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.
(3) 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 authorization.
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.
(4) 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-

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CRS-6
distance telephone companies and airlines), non-profits, 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
F T C
i n f o r m a t i o n
c o n c e r n i n g
t e l e m a r k e t i n g
i s
a v a i l a b l e
a t
[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 2
decades.2
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.3
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
TSR.
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,
2 Federal Register, February 28, 2000, pp. 10428-10434.
3 For additional information on do-not-call lists, see CRS Report RS21122, Regulation of
the Telemarketing Industry: State and National Do Not Call Registries, by Angie A.
Wellborn.

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CRS-7
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.
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
Web
site
at
[http://www.ftc.gov/bcp/conline/edcams/donotcall/index.html].
The FTC press
r e l e a s e
a n n o u n c i n g
t h e
T S R
c h a n g e s
m a y
b e
f o u n d
a t
[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
regulations. 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
the
FTC
Web
site
at
this
address:
[http://www.ftc.gov/os/2002/12/tsrfinalrule.pdf]. Some provisions of the amended
rule became effective on March 31, 2003. However, the caller ID provisions do not
have to be met until January 29, 2004, and the national do-not-call registry will not

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CRS-8
be available until July 2003. Also, following petitions to the FTC, the effective date
of some provisions was extended to October 1, 2003.4
Among the announced FTC changes were
! National Do-Not-Call Registry—After reviewing more than 60,000
public comments, the FTC will establish a national do-not-call
registry for consumers who want to stop most unwanted
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 will have to update their calling lists every three months to
remove telephone numbers on the national registry from their lists. 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 calls.
4 See Federal Register, March 26, 2003, pp. 14659-14660, and April 4, 2003, pp. 16414-
16415.

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CRS-9
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 1-866-290-4236).
July 7, 2003
Phone registration opens 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
lists.
September 2003
The registry will be available to telemarketers.
October 1, 2003
The FTC, FCC, and the states will begin enforcing the provisions of the
amended TSR and TCPA. Telemarketers must check and update their
lists at least once every 90 days.
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.”5 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.
5 See FTC Announces Final Amendments to Telemarketing Sales Rule, Including National
“Do Not Call” Registry, FTC Press Release, Dec. 18, 2002.
Available at
[http://www.ftc.gov/opa/2002/12/donotcall.htm].

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! “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.”6 Takes 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.
! 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
raise money.
More extensive information on the amendments to the Telemarketing Sales
Rule, including the text of the amended rule, is available from the FTC Web site at
[http://www.ftc.gov/bcp/conline/edcams/donotcall/index.html].
6 Ibid.

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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. Also, on the same day, 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). The suits are pending.
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
time.
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.

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Among other things, this Act:
(1) 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 program(s).
(2) 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.
(3) 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.
(4) 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.
(5) 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 currently covers 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
Hang Up
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.

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Be Informed
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 Web sites 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
6th Street and Pennsylvania Avenue, N.W.
Washington, D.C. 20580
[http://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
BBB also provides information at its Web site [http://www.bbb.org/library].
Be Cautious
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. 800, 877, 888, 866, and 855 are the toll-free telephone prefixes used in the
United States.
A list of area codes and the state, territory, or country served by a particular area
code may be viewed at the Web site of the North American Numbering Plan
Administration (NANPA), the administrator of the North American telephone
numbering plan. The Web site 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 revised.
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

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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.
Report Incidents to the Authorities
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
Drop H285
Washington, D.C. 20580
1-877-FTC-HELP (382-4357)(toll-free)
An electronic complaint form and information are available at
[http://www.ftc.gov]. Click on “File a Complaint Online” at the left 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 Web site. 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
[http://www.ftc.gov/bcp/conline/edcams/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
Internet.

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CRS-15
National Fraud Information Center
P.O. Box 65868
Washington, D.C. 20035
1-800-876-7060
[http://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
detail to:
Federal Communications Commission
Consumer & Governmental Affairs Bureau
Complaints
445 12th Street, N.W.
Washington, D.C. 20554
1-888-CALL-FCC (1-888-225-5322)
Complaints may be filed online at the FCC Web site:
[http://www.fcc.gov/cgb/complaintfiling.html]
Information is available at the following FCC Web pages:
[http://www.fcc.gov/cgb/consumerfacts/tcpa.html] (unwanted
telemarketing calls), or
[http://www.fcc.gov/cgb/consumerfacts/unwantedfaxes.html] (unwanted
faxes), or [http://www.fcc.gov/cgb/consumerfacts/telemarketscam.html]
(telemarketing scams)
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, if
implemented, 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

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firms would not be covered by the FTC’s national registry since their calls do not
cross state lines. The FTC is investigating electronic transfer of individual state lists
to the national do-not-call registry. If such a transfer is possible, 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. More information
on such transfers will be released by the FTC at a later date.
The FTC provides a list of states with do-not-call lists and contact phone
numbers for those states at [http://www.ftc.gov/bcp/conline/pubs/alerts/dncalrt.htm].
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
[http://www.the-dma.org/consumers/consumerassistance.html]
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
[http://www.the-dma.org/consumers/consumerassistance.html]
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:

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(1) Disclosing to consumers when contact information about them may be
shared with other marketers;
(2) Providing a means for consumers to opt-out of any information sharing
arrangement;
(3) Honoring any individual consumer’s request not to receive any further
solicitations from the marketer; and
(4) 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 name 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 provides information
on filing complaints [http://www.the-dma.org/consumers/shoppingbyphone.html].
The Direct Marketing Association
1120 Avenue of the Americas
New York, NY 10036-6700
(212) 768-7277

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