[Federal Register: December 27, 2006 (Volume 71, Number 248)]
[Proposed Rules]
[Page 77634-77635]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de06-24]
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FEDERAL TRADE COMMISSION
16 CFR Part 310
RIN 3084-0098
Telemarketing Sales Rule; Extension Beyond January 2, 2007, of
the Previously Announced Forbearance Policy in Enforcement of the
Prohibition of Prerecorded Calls in the Telemarketing Sales Rule
(``TSR'')
AGENCY: Federal Trade Commission.
ACTION: Proposed rule.
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SUMMARY: In a Federal Register document published on October 4, 2006,
71 FR 58716, the FTC denied a request for creation of a new safe harbor
in the TSR for prerecorded calls by sellers and their telemarketers to
consumers with whom the seller has an ``established business
relationship,'' and proposed an amendment to the TSR that would make
explicit the prohibition on prerecorded calls that is now implicit in
the TSR's call abandonment provisions. The Commission accordingly also
announced the revocation of a previously announced policy of forbearing
from enforcement of the TSR's call abandonment prohibition effective
January 2, 2007. In response to a request for an extension of the
forbearance policy, the Commission has determined that the forbearance
policy should remain in effect until the conclusion of the prerecorded
call amendment proceeding.
DATES: Effective January 2, 2007, the Commission will continue its
previously announced policy of forbearing from enforcing the
prohibition of prerecorded calls in the TSR's call abandonment
provisions, until the conclusion of the prerecorded call amendment
proceeding.
FOR FURTHER INFORMATION CONTACT: Craig Tregillus, (202) 326-2970,
Division of Marketing Practices, Bureau of Consumer Protection, Room H-
288, Federal Trade Commission, 600 Pennsylvania Avenue, NW.,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: In a Federal Register document published on
October 4, 2006, 71 FR 58716, the FTC denied a request for creation of
a new safe harbor in the TSR for prerecorded calls by sellers and their
telemarketers to consumers with whom the seller has an ``established
business relationship,'' and proposed an amendment to the TSR that
would make explicit the prohibition on prerecorded calls that is now
implicit in the TSR's call abandonment provisions. The Commission
accordingly also announced the revocation of a previously announced
policy of forbearing from enforcement of the TSR's call abandonment
prohibition effective January 2, 2007.
On November 29, 2006, the Direct Marketing Association (``DMA'')
filed a petition seeking an extension of the Commission's enforcement
forbearance policy on prerecorded calls beyond the announced revocation
date of January 2, 2007. A petition filed by medSage Technologies LLC
on November 30, and petitions filed by Minutepoll, LLC (``Minutepoll
petition'') and jointly by Silverlink Communications Inc. and the Eliza
Corporation (``Silverlink petition'') on December 1, also requested
extensions of the revocation date. Both the DMA and Silverlink
petitions ask for an extension until the conclusion of the rulemaking
proceeding, while the medSage and Minutepoll petitions seek an
extension until six months after the conclusion of the rulemaking to
allow companies sufficient time to comply.\1\
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\1\ The Commission believes that the medSage and Minutepoll
requests for additional time after a final rule is promulgated for
businesses to bring themselves into compliance is premature, since
this issue can be addressed best when the final rule is issued.
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DMA argues that, if the policy were revoked as announced effective
January 2, 2007, even prerecorded messages that consumers
``affirmatively requested would need to be discontinued'' because
businesses would not have had sufficient time during their busy holiday
season ``to obtain the proposed prior written consents.'' \2\ Moreover,
DMA believes that because the TSR's present call abandonment
provisions, unlike the proposed amendment, lack any express provision
allowing prerecorded calls to established customers who have given
their written consent, that failure to extend the forbearance policy
would have the effect of ``a flat prohibition on prerecorded
messages.'' \3\
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\2\ DMA petition at 1-2.
\3\Id. at 1.
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DMA advances two additional reasons for extending the forbearance
policy until completion of the amendment proceeding. The first is that
failure to continue the forbearance policy ``effectively prejudges the
outcome of the proceeding,'' contrary to the intended statutory purpose
``of the Notice and Comment process.''\4\ The second is that an
extension will maintain the status quo for consumers who have listed
their numbers on the Do Not Call Registrybecause it simply continues
the existing forbearance policy.\5\
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\4\ Id. at 2.
\5\ Id. at 3.
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The Minutepoll petition emphasizes the ``irreparable harm smaller
businesses'' engaged in telemarketing would incur unless the
forbearance policy is extended.\6\ Minutepoll says that it and many
other small telemarketers that place prerecorded calls otherwise would
be forced to shut down their operations on January 2, 2007, since they
cannot be ``cost competitive'' with large call centers in placing live
telemarketing calls.\7\
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\6\ Minutepoll petition at 2.
\7\ Id.
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The medSage and Silverlink petitions come from companies under
contract with HMO's and other health care providers, pursuant to
regulations issued by the Department of Health and Human Services under
the Health Insurance Portability and Accountability Act of 1996, to
place interactive ``reminder'' calls to the providers' medical
patients, urging them to get flu shots, childhood immunizations,
routine mammograms and colonoscopies, prescription refills, and the
like.\8\ Both petitions argue that there is insufficient time before
January 2 for the providers they serve to obtain written consent from
the 10 to 20 million patients the Silverlink petition estimates receive
such calls annually.\9\
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\8\ These calls are ``telemarketing'' calls covered by the TSR
because they induce the purchase of medical goods or services.
\9\ Silverlink petition at 2; medSage petition at 3.
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Thus, the medSage petition contends that the company would be faced
with
[[Page 77635]]
``a Hobson's choice'' of violating the TSR or failing to deliver
``medically necessary prerecorded messages,'' and that ``[n]either
choice makes any sense.'' \10\ Similarly, the Silverlink petition
argues that if an extension is not granted, patients would be deprived
of calls that improve healthcare services and patient outcomes.\11\
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\10\ medSage petition at 4.
\11\ Silverlink petition at 6-7 & nn.14-16.
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The Commission rejects DMA's argument that revoking its previously
announced non-enforcement policy can reasonably be seen as in any way
prejudging the outcome of the amendment proceeding. Nevertheless, in
recognition of the reasons presented by the petitions and in order to
preserve the status quo, the Commission has determined that, pending
completion of this proceeding, the Commission will continue ``to
forbear from bringing any enforcement action for violation of the TSR's
call abandonment prohibition, 16 CFR 310.4(b)(1)(iv), against a seller
or telemarketer that places telephone calls to deliver prerecorded
telemarketing messages to consumers with whom the seller on whose
behalf the telemarketing call is placed has an established business
relationship, as defined in the TSR, provided the seller or
telemarketer conducts this activity in conformity with the [following]
terms:'' \12\
\12\ 69 FR 67287, 67290 (Nov. 17, 2004).
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(i) The seller or telemarketer, for each such
telemarketing call placed, allows the telephone to ring for at least
fifteen (15) seconds or four (4) rings before disconnecting an
unanswered call;
(ii) Within two (2) seconds after the person's
completed greeting, the seller or telemarketer promptly plays a
prerecorded message that:
(A) Presents an opportunity to assert an entity-
specific Do Not Call request pursuant to Sec. 310.4(b)(1)(iii)(A)
at the outset of the message, with only the prompt disclosures
required by Sec. 310.4(d) or (e) preceding such opportunity; and
(B) Complies with all other requirements of this Part
[16 CFR Part 310] and other applicable federal and state laws.''
\13\
\13\ 69 FR at 67294 (noting that ``This provision does not
affect any seller's or telemarketer's obligation to comply with
relevant state and federal laws, including but not limited to the
TCPA, 47 U.S.C. 227, and 47 CFR part 64.1200.'')
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The Commission has stated its belief that, as the foregoing
criteria indicate, ``an interactive feature (pressing a button during
the message to connect to a sales representative or an automated system
to make a Do Not Call request) would be ideal . . . to protect
consumers' Do Not Call rights under the TSR.'' \14\ The Commission
emphasizes that its forbearance policy applies only to prerecorded
telemarketing calls that comply completely with all of the foregoing
criteria.
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\14\ 69 FR 67289.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E6-22144 Filed 12-26-06; 8:45 am]
BILLING CODE 6750-01-P