Source: https://www.naag.org/publications/nagtri-journal/volume-1-number-4/do-not-call-the-history-of-do-not-call-and-how-telemarketing-has-evolved.php
Timestamp: 2019-04-24 23:51:22+00:00

Document:
As of September 2015, there were 222 million numbers on the National Do Not Call registry1 and nearly 2.5 million numbers on the Indiana Do Not Call list.2 Every number on a Do Not Call list represents at least one consumer who does not wish to receive telemarketing calls. With such widespread opposition to telemarketing calls, telemarketers should have gone the way of the dinosaurs by now, right?
Wrong! The Federal Trade Commission (FTC) received 3.5 million complaints about unwanted calls in fiscal year 2015.3 According to YouMail.com’s Robocall Index, over 2.4 billion, yes billion, robocalls occurred in the month of June 2016 alone. Even if many of these calls were debt collection, scams, and other non-telemarketing calls, 2.4 billion is a lot of unwelcome calls.
Do Not Call is the number one topic on many of our constituents’ minds. Each month, state attorney general representatives, along with other state, federal, and Canadian agencies hold a conference call to discuss Do Not Call enforcement lawsuits, investigations, and the latest scams. In April 2016, Missouri and Indiana co-hosted the third annual No-Call Law Enforcement Summit to keep informed of the latest cases and regulations affecting Do Not Call issues and to provide training in investigation and litigation techniques. More than 60 federal, state, and private stakeholders participated in the event, which grows each year as mass-dialing and texting become more prevalent.
Well into the second decade of the Do Not Call era, it is a good time to take a look back at where Do Not Call began, where Do Not Call is now, and why Do Not Call does not seem to be stopping unwanted calls anymore.
As popular as the new Do Not Call laws were with consumers, they engendered vehement opposition from those who desired unfettered access to consumers via their telephones. Opponents filed state and federal lawsuits, as well as petitions to the FCC, challenging everything from the FTC’s statutory authority to the constitutionality of charitable solicitations. They almost always failed.
These early challenges underscored both the controversy behind implementation of the restrictions placed on telemarketers and the general conflict between telemarketers and consumers. Perhaps the most dramatic challenges came in 2003 regarding the creation of the national Do Not Call registry. Two decisions at the federal district level struck an early blow against the national Do Not Call registry for different reasons. This two-pronged assault on the national Do Not Call registry would essentially be the only major victory for the telemarketers in the courtroom – and it proved to be short-lived.
Because the court in Mainstream Marketing focused on the First Amendment issues, it did not discuss whether the FTC had authority to create such a registry.25 The Western District of Oklahoma directly confronted this issue in U.S. Security v. FTC.26 It struck down the registry, holding that Congress granted rulemaking authority to the FCC, not to the FTC.27 In other words, the court held that the FTC did not even have the authority to create a national Do Not Call registry.
However, this was only the opening act of an ongoing saga. U.S. Security was handed down on Sept. 23, 2003, and Mainstream on September 25. Noting that over 50 million citizens had already registered on the list and in response to the district courts’ opinions, Congress introduced and passed the legislation mentioned above, the Do Not Call Registry Act of 2003.28 This law clearly expressed congressional intent in passing the Do Not Call Act.
States that developed their own version of Do Not Call legislation faced challenges even before Mainstream Marketing. In 2002, a trial court upheld Indiana’s version of the law against a barrage of attacks which were founded on First Amendment grounds, interpretation of the definition of “telephone sales call,”35 and even the argument that the Indiana law was preempted by the TCPA. In Steve Martin & Associates & AIMKO Associations v. Carter,36 the state prevailed in all regards, setting a trend for a broad interpretation of Indiana’s law. The trial court held that, even though Martin used phone calls only to set up appointments with potential customers to demonstrate vacuum cleaners, the calls were still classified as “telephone sales calls,” prohibited by Indiana’s Do Not Call Law.37 Perhaps the bigger issue in that case, however, was the unsuccessful claim that the Indiana law was preempted by the TCPA. This question of preemption was destined to be viewed on larger stages than a trial court in Evansville, Ind. Numerous times and in numerous jurisdictions the Do Not Call laws have faced preemption challenges and usually prevailed.
What about interstate telemarketing? The TCPA makes specific reference to intrastate regulations, but is silent on the states’ ability to place regulations that are more stringent than the TCPA requirements on calls that are made in one state to a recipient in another state.41 In the absence of any guiding language in the federal law, would the state law be preempted in this situation? The Seventh Circuit recently addressed this issue in a case dealing with Indiana’s autodialer law.42 It should be noted that the challenges to state and federal laws regulating autodialing, or “robocalls” as they are often called, is an extensive topic worth its own article. However, the consequences of the 2013 decision of the Seventh Circuit in Patriotic Veterans, Inc. v. Indiana43 extend well beyond robocalls.
This was a tremendous victory for state Do Not Call laws and a blow to preemption claims. The Seventh Circuit confirmed that state regulations and prohibitions of telemarketing can cross state lines. Consumers should be able to count on an ever-widening buffer to protect them from the many unwanted calls that Do Not Call laws were intended to prevent.
The early days of Do Not Call, enforcement was a game of whack-a-mole in a target-rich environment. Indiana entered into Assurances of Voluntary Compliance with 139 contrite telemarketers in the first two years. However, like the velociraptors in Jurassic Park, telemarketers learned to adapt.
Indiana’s Regulation of Automatic Dialing Machines was a rarely-used law enacted in 1988.46 Then, in 2005, we started to receive hundreds of complaints about robocalls. Automatic dialing technology had been around for years, but it required expensive and bulky standalone equipment installed in a fixed location. Early robocall messages instructed the recipient to call an 800 number and, if one could identify the subscriber of the 800 number, then one could, in theory, locate the telemarketer.
Later came “press 1 transfer” calls from “Rachel from Card Services,” variations of which are still occurring today.47 The consumer receives a call that begins with a pre-recorded message from Rachel (or Heather or Anne, etc.), and Rachel’s cheerful voice instructs the consumer to press “1” (or another number) to talk to an agent about lowering the consumer’s credit card interest rate. When the consumer presses “1,” the call is transferred to a call center. The call center never makes out-going calls; it only receives in-bound calls. An operator pre-qualifies the consumer, weeding out the complainers and those who do not meet specific criteria, and then transfers the call to a closer who takes the consumer’s payment information. Thus, the entity that actually completes the transaction is several times removed from the entity or machine that dialed the call. Rachel does not provide a call-back number, so there is no number to track down. Boiler rooms train their employees to hang up on consumers who ask suspicious questions.
Although Internet-based telecommunications technology had existed for years, it did not become widely marketed to the public until 2004.49 Voice over Internet Protocol (VoIP) was a game-changer for both consumers and telemarketers. Consumers enjoyed low-cost, unlimited long distance calls through providers like Vonage.50 Telemarketers found the hardware and software easy to obtain and relatively inexpensive. VoIP was limited only by the breadth and speed of the telemarketer’s Internet connection, enabling mass-dialing of thousands of calls for pennies. Also, VoIP allowed the telemarketer to fake or “spoof” Caller ID.
Do Not Call laws are premised upon the theory that whoever makes a telemarketing call can be held accountable for calling a number on the list. They are most effective against identifiable companies that use the telephone to market their products and services to consumers. A majority of legitimate sellers adhere to compliance procedures and avoid calling numbers on federal and state Do Not Call lists. For those callers, the Do Not Call laws are working.
On the other hand, scammers do not care about Do Not Call laws and Do Not Call lists. Since they can operate anonymously, they often act with impunity. Many are located off-shore and beyond our jurisdiction. In Indiana, the number one complaint today is Internal Revenue Service imposters threatening arrest and demanding payment. Do Not Call laws were designed to address unwanted sales calls from telemarketers, not extortion from pirates and come-ons from con artists.
Currently, a growing number of call-blocking applications provide temporary relief for unwanted and spam calls.55 A long-term solution is going to require an overhaul of the outdated Caller ID system. Groups such as the Internet Engineering Task Force (IETF) are working on strategies to restore the authenticity of caller identification.56 When rogue telemarketers and scammers are no longer able to hide behind fake caller ID, then law enforcement’s hands will no longer be tied.
1 Source: National Do Not Call Registry Data Book, FY 2015, p. 3.
2 Source: Office of the Indiana Attorney General records.
3 FTC Databook, FY 2015, table at 4. The fiscal year accounting period for the federal government begins on October 1 and ends on September 30 of each year. 31 U.S.C. § 1102.
4 47 U.S.C. § 227.
6 Report and Order, In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752 (1992).
7 Telemarketing Sales Rule, Statement of Basis and Purpose, 60 Fed. Reg. 43842-01, 43866 (Aug. 23, 1995).
8 Telemarketing Sales Rule, Final Amended Rule, 68 Fed. Reg. 4580, 4629 n. 591 (Jan. 29, 2003) citing Fla. Stat. Ann. § 501.059.
9 Id., citing Or. Rev. Stat. § 646.567; Alaska Stat. Ann. § 45.50.475.
10 Mo. Rev. Stat. § 407.1101.
11 Ind. Code § 24-4.7.
12 Ind. Code § 24-4.7-5-2; Mo. Ann. Stat. § 407.1107.
13 Mo. Ann. Stat. § 407.1082.
14 Telemarketing Sales Rule, Final Amended Rule, 68 Fed. Reg. 4580, 4630 (Jan. 29, 2003).
15 67 Fed. Reg. 62667-01, 2002.
16 In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 18 FCC Rcd. 14014 (July 3, 2003).
17 !5. U.S.C.A. § 6152.
18 16 C.F.R. § 310.4(b)(1)(iii)(B).
19 Betty Montgomery, et al., www.RegulatoryGuide.com.
22 283 F. Supp. 2d 1151 (D. Colo. 2003).
26 282 F. Supp. 2d 1285 (W.D. Okla. 2003).
28 15 U.S.C. § 6151.
29 358 F.3d 1228 (10th Cir. 2004).
32 Nat’l Coal. of Prayer, Inc. v. Carter, 455 F.3d 783 (7th Cir. 2006).
33 Fraternal Order of Police, N.D. State Lodge v. Stenehjem, 431 F.3d 591 (8th Cir. 2005).
34 Nat’l Fed’n of the Blind v. FTC, 420 F.3d 331 (4th Cir. 2005).
35 Ind. Code § 24-4.7-4-1.
36 Cause No. 82C01-0201-PL-38 (Vanderburgh Circuit Court 2002).
38 47 U.S.C. § 227(f)(1).
40 See, Utah Div. of Consumer Prot. v. Flagship Capital, 125 P.3d 894 (2005); TSA Stores, Inc. v. Dep’t of Agric. & Consumer Servs., 957 So. 2d 25 (Fla. Dist. Ct. App. 2007); State ex rel. Stenehjem v. Simple.net, Inc., 765 N.W.2d 506 (2009).
41 47 U.S.C. § 227(f)(1).
42 Ind. Code Ann. § 24-5-14-5(b).
43 Patriotic Veterans, Inc. v. Indiana, 736 F.3d 1041 at 1044-45 (7th Cir. 2013).
45 Id. at 1054. The case is currently before the Seventh Circuit again for the purpose of deciding PVI’s First Amendment claims.
46 Ind. Code § 24-5-14.
47 Bandy Bikram, What’s the Deal with ‘Rachel from Card Services’? Your Top 3 Questions Answered at https://www.consumer.ftc.gov/blog/whats-deal-rachel-card-services-your-top-3-questions-answered (Aug. 21, 2015).
49 In the Matter of IP-Enabled Services, 19, FCC Rcd. 4863, 4873-74 (March 10, 2004).
51 47 U.S.C. § 227(e).
52 Attorneys General Urge Federal Government to Allow Phone Companies to Block Unwanted Sales Calls to Customers, http://www.naag.org/naag/media/naag-news/attorneys-general-urge-federal-government-to-allow-phone-companies-to-block-unwanted-sales-calls-to-customers.php (Sept. 9, 2014).
53 Declaratory Ruling and Order, In the Matter of Rules and Regulations Implementing the Telecommunications Consumer Protection Act of 1991, 30 FCC Rcd. 7961 (July 10, 2015).
55 See, e.g., CTIA—The Wireless Association, http://www.ctia.org/your-wireless-life/consumer-tips/blocking-robocalls; FTC, https://www.consumer.ftc.gov/articles/0548-blocking-unwanted-calls.
56 J. Peterson, H. Schulzrinne, and H. Tschofenig, Secure Telephone Identity Problem Statement and Requirements (Sept. 2014), https://tools.ietf.org/html/rfc7340.

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