The Federal Trade Commission last week proposed an amendment to telemarketing rules that would ease an apparent, albeit unenforced, ban on prerecorded telemarketing calls to consumers.
Under the proposal, prerecorded telemarketing calls that reach consumers would not be considered illegal, abandoned or "dead air" calls if the telemarketer has an existing business relationship with the consumer. The FTC announced its proposal in the Federal Register in response to a petition from Voice Mail Broadcasting Corp. of Costa Mesa, California.
As part of the FTC's July 2003 overhaul of the Telemarketing Sales Rule (TSR), which resulted in the national Do-Not-Call list, the agency decreed that telemarketers may use a prerecorded message—rather than a live sales representative—in no more than three percent of the calls answered by a live consumer, not an answering machine. The rule change essentially made prerecorded calls that reached consumers illegal under the TSR.
The FTC rule conflicted with the Federal Communications Commission rules, which allowed prerecorded calls to consumers with whom the sender has an existing business relationship. Under the proposal, the FTC's rule would be more consistent with the FCC's rule, allowing telemarketers to send prerecorded messages to existing customers, as long as the consumer has the chance to opt out of future calls either by contacting a live representative toll-free or via an automated process.
The public comment period on the proposal is open until January 20, 2005. During this time the FTC will not enforce its rules against telemarketers who send prerecorded messages to established customers.
The FTC is also considering a petition from the Direct Marketing Association, which has asked that the FTC limit abandoned calls to 3 percent or less over a 30-day period, instead of each day. This change also would bring the FTC's rules in line with the FCC's, which impose a 3 percent call-abandonment maximum, but measure abandonment rates by the month.
Significance: The FTC’s move is good news for telemarketers. Even though the FTC has yet to enforce the rule against prerecorded-message telemarketers, the rule exists and is thus cause for concern. The FTC was apparently persuaded by Voice Mail Broadcasting’s argument that the harms the call-abandonment provision is designed to prevent do not arise from the limited class of recorded-message telemarketing calls.