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Scams & Fraud
by Sid Kirchheimer, AARP Bulletin, September 1, 2009
Starting Sept. 1, new rules bar most prerecorded telemarketing calls—or “robocalls”—to any consumer who has not given telemarketers written permission to make them.
Under the Federal Trade Commission’s new Telemarketing Sales Rule amendments, violators face penalties of up to $16,000 per call. The goal is to curb the onslaught of annoying automated sales pitches.
In the first phase of the FTC efforts, which went into effect last December, telemarketers were required to let recipients opt out of prerecorded calls. Typically, that means that when you answer a robocall, you should be given instructions such as, “Press one to remove your number,” or “Say ‘remove’ to stop future calls,” to immediately disconnect that call and stop future prerecorded messages from that company. For robocalls left on your voice mail, a toll-free number must be provided for an automated opt-out system. Failure to include such opt-out options can incur fines of up to $16,000 per call.
The new, even tougher rules resulted from continuing consumer complaints, the FTC said.
“The focus here is protecting privacy,” says FTC official Lois Greisman. “We heard from consumers who say they cannot stand automated calls. They find them annoying, harassing and even more bothersome than hearing from a live person. So we changed the rules.”
What’s still allowed
But don’t expect this new requirement to stop all robocalls, which are often generated by an autodialer that calls phone numbers in sequence. Exempt from the new rule are:
• Politicians and political groups;
• Banks, telephone carriers and utility companies contacting their customers;
• Survey takers;
• Debt collectors;
• Certain health-related messages, including prescription refill notices;
• Informational prerecorded messages, such as those related to schools or road closings, flight cancellations or delivery notifications.
Still, those exempt robocalls are allowed only when placed directly by employees of the companies. If a business hires a third-party telemarketing firm to make robocalls on its behalf, “the FTC has taken the position that the third-party telemarketer must honor the new rule” and get written permission, says Greisman.
Sales calls made by actual people are still allowed unless the recipient’s phone number has been on the National Do Not Call Registry for at least 31 days.
Each month, legitimate telemarketers are supposed to check the Do Not Call list to determine which phone numbers should not be called. “But there are telemarketers who don’t, and citizens get calls when they shouldn’t,” says FTC spokesman Mitchell Katz.
File a complaint on the Do Not Call Registry’s website or call 1-877-382-4357 toll-free about unauthorized telemarketing calls of any kind. Individual complaints are not investigated, but when the FTC accumulates a “large” number about a particular company, it could launch an investigation.
“That’s why we encourage consumers to file complaints,” says Greisman. “We have been going after the biggest violators, but there are some smaller fish that might be worth targeting as well.”
The FTC is not involved in determining how or when telemarketers must get written permission before placing “authorized” robocalls.
“My guess,” says Greisman, “is that a retailer may ask a customer at the point of sale, ‘Do you want to get a prerecorded call about our next sale?’ Or when you make an online catalog purchase, you may be asked to check a box allowing you to receive future automated calls from that company.”
Jerry Cerasale, senior vice president for government affairs of the Direct Marketing Association, which represents some 3,400 companies, says the written permission “requires a signature and phone number.” He said companies may obtain the form and an electronic signature by e-mail, but he is unaware of any permission slip that will be mailed to consumers.
The DMA opposed the rule that takes effect today. “We understand that prerecorded calls to customers were a cost-effective means to offer goods and services,” Cerasale says.
The American Teleservices Association, which represents call centers and other companies engaged in telemarketing as well as e-mail and Internet sales and service, did not respond to a phone call seeking comment about the robocall restrictions.
Sid Kirchheimer writes about consumer and health issues.
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