December 16, 2014
December 16, 2014
Davis Dwight & Tremaine LLP
Oregon business law firm
A majority of the nation’s state and territorial Attorneys General have collectively urged the Federal Communications Commission and Federal Trade Commission to revisit rules and policies in ways that would help law enforcement crack down on telemarketing practices.
Recently, the FCC issued a public notice seeking comment on a request by the National Association of Attorneys General and 39 undersigned state law enforcement executives (referred to collectively here as “NAAG”). The petition seeks a formal FCC opinion on the legal ability of telephone providers to implement call-blocking technology to combat unwanted telemarketing. In their request, NAAG noted that while call-blocking technology such as “NoMoRobo,” “Call Control,” and “Telemarketing Guard” currently exist on the market, telecom companies are reluctant to employ such devices to stop unwanted telemarketing from reaching consumers due to perceived legal barriers. According to telecom industry representatives, “phone companies have a legal obligation to complete phone calls” and the current legal framework “does not allow [them] to decide for the consumer which calls should be allowed to go through and which should be blocked.”
The FCC’s notice asks for public comment on three major issues raised by NAAG and the Attorneys General:
In addition to the above issues, the FCC observes in the public notice that while it has long prohibited call blocking in particular contexts and, “except in rare circumstances” does not allow carriers to engage in call blocking, it has not directly held that blocking calls at the customer’s request is unlawful. In addition to seeking comment on the legal authority and regulatory history that such call-blocking raises, the FCC also seeks comment on what call-blocking technologies are available or are under development, how they work, and whether differences in how specific technologies work should lead to different outcomes under the law. It also asks how such call-blocking technologies might differ from “*60” or “*64” customer-activated services (“black-list” and “white-list” subscriber-initiated call-blocking), and whether the regulatory regime applicable to those services matches up with call-blocking services.
The FCC also raises questions in the Telephone Consumer Protection Act (“TCPA”) context specifically, including how the FCC should reconcile the obligation of carriers to complete calls with protecting consumers from unwanted calls, and how (if at all) the analysis should reflect different types of potential “robocalls,” including, e.g., whether special considerations should be given to those placed for emergency purposes, and/or from charitable organizations.
Meanwhile, on the same day that FCC issued the public notice, NAAG and many of the same Attorneys General responded to the FTC’s Request for Comments announced last July on potential updates to the Telemarketing Sales Rule (“TSR”). In their comments to the FTC, NAAG noted that telemarketing-related issues remain high on state and federal consumer complaint lists, and identified several areas in which they perceive telemarketer fraud and abuse to be particularly harmful to consumers. According to NAAG, telemarketing tools like the use of pre-acquired account information, negative options, and “novel payment mechanisms” are often used by “unscrupulous telemarketers” to prey on vulnerable consumers and frustrate the ability of law enforcement agencies to thwart such scammers.
To reduce perceived telemarketing fraud and strengthen the ability to engage in enforcement actions, NAAG supported amendments to the TSR to: (1) prohibit use of pre-acquired account information in telemarketing transactions, including “free-to-pay” arrangements; (2) add limits and requirements on negative option features in telemarketing; (3) require telemarketers and sellers to create and maintain call records to aid with enforcing the TSR; and (4) ban or restrict the use of certain “novel payment methods” that amount to fraud-induced money transfers.
Clearly state authorities are seeking ways to continue to throttle telemarketers, who already have seen 217 million telephone numbers placed on the National Do-Not-Call Registry, a clamp-down on prerecorded telemarketing calls at the federal level and on autodialed live-agent and text-message telemarketing as well, and vastly increased class-action TCPA cases over the last several years that have each sought to impose potentially millions of dollars of liability on defendants. If NAAG prevails in persuading the FCC or FTC to establish polices or to adopt or change their rules as presently advocate, it would only mean even tougher sledding for telemarketers.
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