Victory for consumers; defeat for robo-calls

Herb Weisbaum • Profile • E-mail

Don’t you just hate it? You’re at the dinner table, watching TV or just relaxing, when the telephone rings. You stop what you’re doing, grab the phone, and it’s a sales call! What could be more annoying? How about a sales call that’s a recorded message?

As you hang up the phone you say to yourself, “But I’m on the Do Not Call list. Why did this happen?”

It turns out there was a little exemption in federal telemarketing rules that allowed millions of people on the Do Not Call Registry to get recorded sales pitches. If you had a “business relationship” with a company, they were allowed to send you automated calls.

The Federal Trade Commission just changed the rules to close that loophole. By next year at this time, the chances of getting these unwanted robo-calls should drop dramatically.

By December, all recorded sales calls must have a simple interactive way for you to let the company know you do not want any more of them. It could be via the keypad (“push 1 to avoid future messages like this”) or by saying something into the phone.

As of September 1, 2009, companies can only make recorded sales calls to people who have agreed in writing to receive them. Digital signatures via e-mail are acceptable.

The rules say if the telemarketer does not have the technology to determine if the automated call is going to an answering machine or voicemail, the message must include a toll-free opt-out number.

Consumer groups are delighted with the new rule. “It’s a big step forward,” says Susan Grant, director of consumer protection at the Consumer Federation of America. “The FTC’s action will bring some relief to consumers whose phones are being tied up and answering machines are being filled up with prerecorded sales calls.”

Protect your telephone privacy Have your landline and cell phone numbers on the national “Do Not Call” registry. (Go to this site or call 1-888-382-1222 from the phone number you want to register.) Exercise your right to tell companies that you do business with, which are still allowed to make live telemarketing calls to you even if your number is in the “Do Not Call” registry, to put you on their “Do Not Call” lists. Read the forms you fill out online and offline carefully to make sure that you are not agreeing to receive prerecorded sales calls if you do not wish to do so. Report violations to the FTC at (Go to this site or 1-877-FTC-HELP. Source: Consumer Federation of America

The telemarketing industry isn’t happy with the new rules, but it appears ready to accept them without a legal challenge. According to Tim Searcy, CEO of the American Teleservices Association, telemarketers now have “a greater understanding of how frustrated consumers are with the use of prerecorded messages.”

Searcy tells me recorded messages are not as effective as live operators, but many companies use them because they are substantially cheaper.  “It’s probably in the neighborhood of a dollar a minute for a person to be involved and it’s pennies a minute for a prerecorded message,” he says.

Why was this new rule needed?
Two federal agencies, the Federal Communications Commission and the Federal Trade Commission, both regulate telemarketing calls. The FCC has a rule that allows companies to send recorded sales messages to anyone with an “established business relationship,” even if their home phone number is on the Do Not Call Registry.

If you bought or rented something from that company within the last 18 months, or simply inquired about a product or service within the last 3 months, you’ve established a business relationship.

“Theoretically, you could go into a store and buy a pack of chewing gum and create an established business relationship with that store,” says Allen Hire with the Federal Trade Commission.

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