FTC Acts On Dma's Petition To Delay Implementation Of Some Telephone Sales Rule (TSR) Changes
NEW YORK, March 16, 2003 – Acting on a petition by the Direct Marketing Association (The DMA), the Federal Trade Commission (FTC) late on Friday, March 14, 2003, agreed to delay enforcement of some parts of its changes to the Telemarketing Sales Rule (TSR) that were to take effect on March 31, 2003
The FTC decided to stay the implementation date by which it will require full compliance with the call recording provision of the abandoned call safe harbor until October 1, 2003.
The FTC also decided to partially stay, until October 1, 2003, the date at which it will require full compliance with recordkeeping requirements to document the use of a recorded message in instances of call abandonment.
"We are pleased that the FTC acknowledged the need for delay and postponed enforcement," said H. Robert Wientzen, president & CEO, The DMA. "Given the need to install new hardware and software, it would have been nearly impossible for the industry to comply with the new TSR in the original timeframe."
In its January 29, 2003, Federal Register notice, the FTC had said the amended TSR would become effective March 31, 2003, except for two revisions: the caller identification transmission provision, which is to take effect on January 29, 2004, and the national do-not-call registry, which probably will take effect in fall 2003.
The DMA had petitioned the FTC on February 27 to delay the March 31 implementation date for the provisions dealing with the "Abandoned Call Rule" and Free-to-Pay/Preacquired Account Rule." These are the provisions that, respectively, deal with abandoned calls and taping of any transaction combining the use of preacquired account information and a free-to-pay conversion offer.
The FTC, however, denied The DMA’s request to stay the overall prohibition on abandoned calls. Thus, this prohibition remains in effect, and the remaining safe harbor requirements also remain in effect.
These remaining "safe harbor" provisions require that telemarketers employ technology that ensures abandonment of no more than 3 percent, that the phone ring for at least 15 seconds or four rings before disconnecting an unanswered call, and that corresponding records be kept.
"We still believe that implementation of these changes by March 31 pose enormous challenges and costs to the industry, and we will have to evaluate how the denial of this request relates to our lawsuit as it moves its way though the 10th District court in Oklahoma City," said Wientzen.
In its lawsuit filed January 29, The DMA argues that the FTC's proposed government-run do-not-call registry would violate First Amendment rights to advertise freely. Also, The DMA asserts that in creating such a list, the FTC exceeded its statutory authority. In addition, The DMA points out that the FCC is considering a similar proposal, opening the door to potential bureaucratic duplication. The FCC is expected to make its recommendation in a matter of a few months.
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