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Published: Sunday, 10/19/2003

Do Not Call law leaves plenty of room for pitches

BY JON CHAVEZ
BLADE BUSINESS WRITER

IF YOU signed up for the national Do Not Call registry, by now you should be getting fewer calls from telemarketers.

But the law aimed at allowing people to request not to be pestered by telephone sales pitches has plenty of loopholes.

Besides permitting calls from people conducting surveys or raising funds for charities and politicians, it allows calls from businesses with which you have established relationships, such as any firm from which you buy a product, to which you pay or bill, or with which you conduct any business, such as a delivery service.

``Calls to induce the sale of goods or purchase of services is telemarketing,'' said Katie Harrington-McBride, a staff attorney with the Federal Trade Commission.

Said Diana Mey, a consumer advocate and anti-telemarketing folk hero from Wheeling, W.Va.: ``There's still a bunch of loopholes - the established business relationship being the biggest one.''

Under the law, people who have registered on the Do Not Call list are not supposed to receive telemarketing calls. For those who signed up in time - and 50 million people did - the ban took effect Oct. 1. For others, it will take effect in 90 days.

Telemarketers who call people on the list could be subject to fines up to $11,000 for each call.

The Do Not Call law was struck down by a federal district court in Denver but was temporarily reinstated by the 10th Circuit Court of Appeals, which will begin hearings on the case Nov. 10. The law, which is being administered and enforced by both the Federal Trade Commission and the Federal Communications Commission, permits a firm with which you have conducted some type of business to call you with sales pitches for 18 months.

The FTC has said some businesses may try to exploit that provision by using questionnaires, raffle entries, coupons, and other seemingly innocent forms to establish a relationship deceptively. Even filling out forms online may give companies the 18-month window.

A call to a business to ask a simple question, such as when a sale will occur or if it carries a specific product, gives a business permission to call up to three months under the law, the FTC said.

``You can sever this relationship by asking them not to call you anymore when they call,'' said Ms. Mey, the consumer advocate.

But many people don't do that, even though that option has been around since 1991 as part of the Telephone Consumer Protection Act. Such a request terminates the business relationship, said Robert Braver, a Norman, Okla., businessman who has gained fame for successfully suing telemarketers who use abusive practices.

The Do Not Call registry appears to be working well so far, he said. But it is unclear how telemarketers will try to exploit the loopholes, he explained, such as giving away a six-pack of soft drinks in return for filling out a form that would open a business relationship.

Ms. Harrington-McBride, the FTC attorney, said the rules have been interpreted rather broadly so that if the call ``is designed to ultimately induce the selling of goods and services,'' it is illegal even if the seller portrays himself as merely seeking information.

That could confuse some people because calls to conduct surveys are permitted, as are solicitations for nonprofit charities and religions.

Kevin Orians, vice president of NFO WorldGroup in Oregon, a research and survey firm, said his company hasn't encountered problems calling consumers since the law took effect.

That is partly because NFO frequently uses panels of participants for its research, and most on those panels agree in advance to be called, he said.

At least one telemarketer has tried to exploit the nonprofit loophole, Ms. Mey said. She got a call this month from a credit counseling service that said it was nonprofit and tax-exempt. ``I called the 800 number at IRS and the company was not tax-exempt,'' she said.

She also received a prerecorded telemarketing call since Oct. 1. ``Those are illegal flat-out unless you have an established relationship,” she said. “I tracked them down and they paid me $1,500 for the illegal call.''

Shortly afterward, they called her again, she added, indicating such callers probably don't expect many people will challenge them.

One new sales pitch is aimed at people with Caller ID service, she said. The phone rings once, then disconnects, so the call never goes through, but it leaves a display message with a toll-free number and an ad, such as “Free Pagers,” on the Caller ID box, she explained.

``They hang up immediately so it's not a violation,” Ms. Mey said.

``I think in the coming months we're going to get some really creative telemarketers. I do think you're going to see different ways they're going to try to get around this.”



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