Dear Mr. Clark:
The Privacy Rights Clearinghouse (PRC)1 submits
these comments responding to the Federal Trade Commission’s (FTC
or Commission) proposed actions regarding the Telemarketing Sales Rule
(TSR). The PRC has joined and fully endorses comments submitted by
the National Consumer League (NCL) and other organizations on behalf
of consumer privacy interests.
Contents:
- VMBC Petition
- Specific Rule agains Prerecorded Calls Is Necessary
- The FTC Should Adopt Zero Tolerance for Abandoned
Calls
- Conclusion
The Commission’s current solicitation
for comment follows previous announcements soliciting comment on
petitions from the telemarketing industry to amend the TSR. Specifically,
the Commission is now seeking comment on decisions to (1) deny the
Voice Mail Broadcasting Corporation (VMBC) petition to allow prerecorded
messages with an established business relationship (EBR); (2) specifically
prohibit prerecorded sales calls; and (3) grant the Direct Marketing
Association (DMA) petition to change the calculation rate for abandoned
calls.2
1. VMBC Petition
VMBC petitioned the Commission to amend the TSR to allow prerecorded
telemarketing calls to consumers when the caller has a claimed business
relation. If accepted, an EBR exception for prerecorded sales calls
would have created a major loophole, opening the door for a dramatic
increase in unwanted calls to consumers who had placed their telephone
numbers on the national Do-Not-Call (DNC) Registry.
Concern for the potential privacy invasion
resulting from the exception VMBC requested was heightened by the
broad definition of an EBR. Under the definition, a business “relationship” could be claimed
under the most tenuous circumstances. As defined, a consumer would
not even have to make a purchase. A casual inquiry would be enough
to establish a “relationship.”
Worse, an EBR can be used as a ruse for
telemarketers that simply ignore the DNC Registry. This was amply
demonstrated in consumer comments received by the Commission. For
example, one consumer wrote, “I
constantly receive solicitations from companies who claim I have a
relationship with them, and I’ve never heard of them before.” Another
consumer told the Commission, “I signed up as soon as the list
[Registry] opened. I STILL get calls, both human and PRE-Recorded….” (Proposal,
pg 26, Fn 26)
Consumer comments to the Commission echo
complaints the PRC continues to receive from consumers weary of answering
unwanted sales calls. As any consumer with a telephone would no doubt
say, signing up for the Registry provides relief from unwanted sales
calls. But, unsolicited calls, whether from a live person or a prerecorded
message, are still far too common. Consumer comments when combined
with the Commission’s
record of enforcement actions confirm that the telemarketing industry
is not one that can effectively police itself.
The overwhelming consumer response opposing
the FTC’s early
inclination to grant VMBC’s petition was not surprising. No other
consumer issue generates more public outrage than unwanted telemarketing
calls. This is evident in not only the 13,000 comments received from
consumers opposing prerecorded calls, but in the number of telephone
numbers included on the DNC Registry. Although the DNC Registry is
an opt-out mechanism which favors business interests over consumers,
130 million telephone numbers are now included on the DNC Registry.3 These
numbers speak for themselves.
Consumers have thus sent a clear message
to regulators and the telemarketing industry that unwanted sales
calls are intrusive when a “live” caller
is on the phone and even more so when an unwanted call results in a
prerecorded message. The record created by consumer comments along
with the Commission’s own analysis more than adequately demonstrate
why prerecorded sales calls, under cover of a claimed EBR, should not
be allowed.
In denying the VMBC petition, the FTC has
made the right decision. The Commission solicited further comment on
whether consumers consider prerecorded messages a privacy invasion. For
years and at every opportunity, consumers have weighed in against all
manner of unwanted telemarketing calls, whether from “live” callers,
prerecorded messages, or hang-ups. There should now be little doubt as
to how consumers line up on the subject of telemarketing calls.
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2. Specific Rule against
Prerecorded Calls Is Necessary
The Commission seeks comment on a proposal to amend the TSR to specifically
prohibit prerecorded sales calls. We strongly support this amendment
and urge the Commission to adopt it. The amendment should apply to
calls answered by the consumer as well as prerecorded calls left on
an answering machine or voice mail system.
An explicit statement that prerecorded calls are prohibited gives
both consumers and the industry clear guidance.4 Without
a clear statement from the Commission, consumers, in particular, may
be confused about whether a prerecorded message is from a “legitimate” caller.
Prerecorded messages not covered by the TSR do not normally require
a call back. This includes informational calls regarding a flight cancellation,
appointment confirmation, and messages from political candidates.
However, a prerecorded sales message
will almost certainly leave a call-back number. An explicit prohibition
will allow consumers to know, in no uncertain terms, to suspect any
caller that has left a prerecorded message in violation of the FTC’s
rules. The FTC has noted 162 cases against telemarketers for TSR
violations.5 Given
the record of enforcement actions to date, there is no reason to believe
all telemarketers will abide by even a specific rule prohibition.
This may be so for what the FTC calls “covered entities,” that
is, the mainstream self-regulated industry that has promised to follow
a trade association’s guidelines. But, just as likely, consumers
will continue to experience prerecorded messages generated by scam artists.
Crooks, identity thieves, and others involved in fraud often use the
telephone as the first point of contact, especially targeting elderly
victims. Bad actors use predictive dialers and prerecorded messages,
too. If the call is not answered, the caller then usually leaves a prerecorded
message. A clear statement from the Commission that prerecorded sales
calls are prohibited may save some who might otherwise become victims
of fraud.
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3. The FTC Should Adopt Zero Tolerance
for Abandoned Calls
The Direct Marketing Association (DMA)
has petitioned the Commission to change the TSR regarding “dead-air” or
abandoned calls to consumers. The rule currently allows telemarketers
an abandonment rate of no more than 3% per day, per campaign. The
DMA wants the Commission to amend the rule to calculate the abandonment
rate on a monthly basis, with no more than 3% per month, per calling
campaign.
From the consumers’ standpoint, the
important question is not whether the calculation should be per day
or per month. We believe the only acceptable rate for abandoned or
dead-air calls is a zero tolerance.
In many ways, dead-air or abandoned calls are much more intrusive
and troubling than even prerecorded calls. Consumers have every right
to be annoyed when they run to catch the telephone and are met with
silence. For some, any allowance for abandoned calls may be threatening
or dangerous. For example, when the telephone rings and no one is on
the end of the line, this needlessly increases anxiety for stalking
victims. Consumers whose homes have been burglarized or who live in
a neighborhood where home burglaries have occurred, may worry that
crooks are checking to see if anyone is home. But, by any estimation,
abandoned calls are just an added annoyance and invade the right to
privacy in the home.
Above all, any tolerance for “dead-air” calls denies consumers
the opportunity to complain about abusive calls. With unwanted calls
from a “live” salesperson -- or even prerecorded messages
-- the consumer is likely to have the name of the company and a call-back
number. Even when the consumer’s phone has Caller ID, the display
usually shows only “private caller,” or “out of area.” Thus,
consumers have no recourse whatsoever with auto-dialed calls that result
in “dead-air” calls.
Consumers’ inability to complain about abusive telemarketing
experienced from “dead-air” calls, under any calculation,
is a significant problem. Without the FTC’s ability to conduct
compliance audits and without consumers’ ability to complain,
the only enforcement mechanism is a telemarketer’s requirement
to keep records of abandoned call rates. The FTC should remedy this,
either through rulemaking or, if appropriate, seeking an amendment
to the law itself.
But, now, the issue before the Commission
is whether to change the abandoned call calculation, as requested
by the DMA. Granting DMA’s
petition does nothing to promote consumer interests. Rather the problem
raised by DMA’s petition is a result of telemarketers’ unwillingness
to program predictive dialers to ensure a zero rate of abandoned calls.
Industry comments confirm that dialers could be programmed to
a zero rate, but it’s cheaper not to do so.
The Commission should deny DMA’s request to change the calculation
from a per-day to a per-month rate. DMA has shown no good reason why
this should be granted or that consumers have anything to gain by changing
the calculation. The best the DMA has to offer is to say that “dead-air” calls
will not increase. This is no comfort to consumers who, the FTC acknowledges, “despise” dead
air and hang-ups. Whether calculated over a day or a month, potentially
thousands of telemarketing campaigns are going on at any given time.
This means consumers will continue to receive the calls they hate most,
dead-air calls.
By granting this petition, the FTC sends
the wrong message, both to consumers and the telemarketing industry.
The agency should not bend to telemarketers’ claims of economic hardship. Nor should the
FTC modify consumer protection rules to accommodate changes in technology.
This is a bad precedent to set. When the Commission first adopted the
3% rule, the FTC adopted the DMA’s then existing guideline. (Proposal,
pg 51) That the DMA guidelines have now changed is not reason to modify
the TSR. In addition, the FTC, when it first adopted the 3% per
day calculation, expressed concern about higher abandonment rates for
less valued customers. This remains a valid concern.
We urge the FTC to reconsider its proposal to grant the DMA petition.
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4. Conclusion
The Commission’s proposal to deny VMBC’s
petition to allow prerecorded EBR calls is unquestionably the right
move and shows that the agency does listen to consumers. And, clearl,
an absolute rule prohibiting prerecorded sales calls is necessary
to alleviate confusion with current interpretations.
We also urge the Commission to deny DMA's petition to recalculate call
abandonment rates. In response to consumers, the Commission should go
a step further and seek an outright ban on all dead-air calls.
We greatly appreciate the opportunity to supplement the comments submitted
by NCL and other organizations concerned with consumer privacy.
Sincerely,
Beth Givens, Director/
Tena Friery, Research Director
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