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An Update On The Federal Do-Not-Call Registry

March 11, 2008

In February, U.S. Congress passed two bills, S. 781 and H.R. 3541, that individually and collectively affect the federal Do Not Call registry. Together, the bills will extend the Federal Trade Commission's (FTC) ability to collect fees to maintain the DNC registry.  (This is important because its authority to do so was set to expire at the end of 2007.)
 
Additionally, the bills would eliminate the automatic removal of telephone numbers from the registry every five years. Since June of 2003, when the Do Not Call registry was created, more than 140 million home and mobile telephone numbers have been added. (The FTC reports that some 76 percent of American adults have placed their number or numbers on the list.)
 
At the time of its creation, the list was to have been purged after five years, since many of the numbers would be old, changed or otherwise outdated, which was considered burdensome and unfair to the industries that employ outbound calling. But, with the passage of H.R. 3541 (titled "The Do Not Call Improvement Act"), this "purge" will no longer take place.
 
According to the bill: "In issuing regulations regarding the `do-not-call' registry of the Telemarketing Sales Rule…the Federal Trade Commission shall not provide for any date of expiration for telephone numbers registered on the `do-not-call' registry, nor for any predetermined time limitation for telephone numbers to remain on the registry."
 
Senate bill 781 basically accomplishes the same thing as H.R. 3541, striking the expiration date from the original language used in the creation of the registry, in particular in the section that pertains to the federal government's ability to collect fees associated with the registry.
 
And the fee collecting has been fairly lucrative. In January of this year, the FTC announced a complaint and fines against California-based Voice-Mail Broadcasting Corporation (VMBC), which made more than 46 million pre-recorded calls to numbers on the DNC registry. The agency settled the charges, baring VMBC from violating the FTC’s Telemarketing Sales Rule (TSR (News - Alert)) and requiring them to pay $180,000 in civil penalties.
 
Other high profile charges associated with violations of the DNC registry have been filed against Ameriquest Mortgage Company, Global Mortgage Funding, Inc., ADT Security Services, Inc., Columbia House, Craftmatic Industries, DirecTV (News - Alert) and a variety of mortgage and credit counseling companies.
 
In November 2007, the FTC announced it was going to get tough: it was going to begin a crackdown on companies and individuals accused of violating the requirements of the registry. The crackdown resulted in six settlements and collectively imposed nearly $7.7 million in civil penalties.
 
After the crackdown, FTC Chairman Deborah Platt Majoras said, “By bringing enforcement actions…we will ensure that the small number of bad actors pay a price for not adhering to the law and respecting consumers’ privacy requests.”
 
Altogether, since the registry was established in 2003, the FTC and Department of Justice have filed 34 law enforcement actions against individuals and companies that allegedly violated registry provisions. In total, the two agencies have collected more than $16 million in civil penalties—the largest of which was $5.3 million from DirectTV in 2005.
 
So how, you might wonder, does the federal government plan to account for the fact that after a while, this registry is going to get woefully out of date, since the necessity of re-registering numbers has been removed?
 
When the agency announced its decision to drop the expiration back in the fall of 2007, it stated that "Also, the Registry has been implemented successfully for five years and has included a scrubbing program that has removed disconnected and reassigned numbers each month."
 
H.R. 3541 attempts to address this, by adding language that with regards to the "Removal of Invalid, Disconnected, and Reassigned Telephone Numbers," "The Federal Trade Commission shall periodically check telephone numbers registered on the national `do-not-call' registry against national or other appropriate databases and shall remove from such registry those telephone numbers that have been disconnected and reassigned. Nothing in this section prohibits the Federal Trade Commission from removing invalid telephone numbers from the registry at any time."
 
Basically, the bill has taken the burden of keeping the list fresh out of the hands of consumers (as it would have been if consumers had to re-register their numbers after five years) and placed the onus on the FTC for making sure the list is current.
 
Finally, said the FTC in its decision, "[T]he Registry has enjoyed unprecedented popularity and helped enhance the privacy of the American public in a tangible way.”
 
In other words, it's an election year.
 

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