New Jersey Governor Stirs Up Anti-Telemarketing Fray

Telecom Policy Report, Feb 16, 2005

New Jersey's Acting Governor Richard Codey recently initiated a public lobbying effort to keep the FCC from considering recent telemarketing petitions to override stringent "Do Not Call" laws in Indiana, New Jersey and Wisconsin (TPR, Feb. 9), which are said to be tougher than federal statutes and programs. In a "call to action" claiming the state-level law is in jeopardy and under attack, Codey is asking New Jerseyans to access a state "Protect Do Not Call" Web page and a FCC on-site comment process following similar executive-branch actions in Indiana and Wisconsin.

"Currently, New Jersey's 'Do Not Call' law is among the strictest in the country," says Codey. "The federal government will soon decide if New Jersey can keep the nation's strongest 'Do Not Call' list. Send your thoughts to the FCC. Let them know if you think New Jersey's consumer protection laws should be weakened." Codey, who sponsored the New Jersey legislation, clearly claims to be "adamantly opposed" to any weakening of the program.

As reported previously in this newsletter, the Consumer Banking Association (CBA) - partially in support of the American Teleservices Association - has petitioned the FCC for a declaratory ruling that telemarketing laws in three states (Indiana, New Jersey and Wisconsin) are too restrictive. The two also say such laws effectively pre-empt the agency's authority over interstate calling and consumer protection under The Telephone and Consumer Protection Act (TCPA) of 1991, including the FCC-established "Do Not Call" registry allowing subscribers to keep their telephone numbers out of telemarketers' hands for as long as five years.

The state backlash has included publicity campaigns by governors, calls to deluge the FCC with public comment and formal opposition papers filed with the FCC by attorneys general and consumer advocate groups in the three states.

New Jersey's Codey says "Do Not Call" is one of New Jersey's most successful consumer-protection laws; more than 2.8 million New Jerseyans have put themselves on the "Do Not Call" program list (representing approximately two out of every three residential phone lines in the state) and, according to the acting governor, many residents report almost a 100-percent drop in unsolicited sales calls. "Most likely due to its success, the law is under a coordinated attack from telemarketers who want the ability to call people despite the fact they have already signed up to stop telemarketing sales calls," Codey says.

New Jersey's law - signed by former governor James E. McGreevey - went into effect in May 2004, and it was designed not only to preserve privacy by stopping or curbing unwanted calls, but also to thwart telephony as a popular means of perpetrating fraud and scams. New Jersey requires telemarketers to register annually with its Division of Consumer Affairs, to disclose whether their principals have been convicted of any crimes, and to refrain from calling residential and/or mobile telephone numbers on the list. It also prohibits telemarketers from calling between 9 p.m. and 8 a.m., and it bars them from intentionally blocking consumers' use of caller ID. Fines can range to as much as $10,000 for the first offense and to $20,000 for each subsequent violation.

In January, New Jersey amended its law so that any individual who has signed up for the federal registry automatically is placed on the state's list and is covered under the law.

Some states that have blocked businesses from contacting any person on "Do Not Call" lists with whom they have conducted business with during the last 18 months, essentially have claimed federal laws are more loosely defined, especially by allowing telemarketers to call consumers with whom they have had an "established business relationship."

Commission Continues To Ponder The Issue

The FCC, meanwhile, has not yet decided if it will overturn existing state "Do Not Call" laws. During its Feb. 10 meeting, however, the commission unanimously made some clarification-type decisions under TCPA, without addressing any state vs. federal law issues and declining to reconsider the establishment of the national "Do Not Call" registry as a whole. Based on petitions for reconsideration of its rules regarding telemarketing, the FCC said:

* An existing business relationship exists between a company and consumer during the time a financial contract is in force (including bank accounts, credit cards, loans and mortgages).

* Calls made for the purpose of debt collection are not required to identify the caller's state-registered name in prerecorded messages if doing so would conflict with federal or state laws.

* Bill messages satisfy the requirement on common carriers to provide an annual notice to subscribers of the opportunity to register with the national "Do Not Call" list.

* Company-specific do-not-call requests must be honored for five years from the date any request is made, whether the request was made prior to the effective date of the amended rule or after the rule went into effect.