Bill to Curb Telemarketing Nears Passage

Reacting to widespread consumer complaints, Congress was expected to give final approval late Tuesday to a bill that would halt annoying telemarketing calls and ban “junk fax” ads directed at telephone customers who do not want to receive them.

The legislation, expected to breeze through the House and Senate with bipartisan support despite nominal opposition by the Bush Administration, would be sent to the White House as one of the last actions of the first session of the 102nd Congress.

Although the White House Office of Management and Budget criticized the bill, which would impose the first major federal restrictions on the rapidly expanding telemarketing business, President Bush is expected to sign the highly popular measure.

Advocates said that the legislation would allow the public to “just say no” to unwanted telephone advertising pitches that are being made by the millions every day with the aid of automatic rapid-dialing machines.

Under the bill, the Federal Communications Commission would be required to set up a “national privacy protection service” to develop a comprehensive list of telephone subscribers who do not wish to receive unsolicited calls.

Business firms that called anyone who is not on the “don’t-call-me” list would be required to state their address or telephone number and disconnect the phone quickly if the person called hangs up the receiver.

The measure would ban unsolicited faxed advertisements and unwelcome calls from computer-driven automatic dialing machines, although the FCC would be authorized to make exceptions to the general prohibition against such practices.

For example, emergency use of machine-dialed calls would be exempted from the ban if local authorities wanted to warn every telephone subscriber of a danger to public health or safety.

The bill would also permit calls to people in cases of an established business relationship, allowing newspapers or magazines to telephone their subscribers and credit card companies to call their cardholders. Retail stores and service companies would be allowed to call their customers.

The ban would not affect calls or messages from tax-exempt, nonprofit groups such as charities or political organizations or calls made as part of public opinion polls or consumer surveys.

The legislation was drafted to protect the privacy of telephone subscribers at a time of rapid expansion of telemarketing activity. An estimated 300,000 sales representatives now make more than 18 million calls every day, and 75,000 stockbrokers place about 6 million calls a day.

In opposing the bill, the Office of Management and Budget said that it would bring “unnecessary regulation of commercial activities and could curtail technological innovation and eliminate legitimate business operations.”

The FCC already has sufficient authority to deal with telemarketing abuses, the budget office said, adding, “The legislation could impose substantial costs on industry and the public, and it has not been demonstrated that (the bill) will produce benefits that outweigh these costs.”

An official with a telemarketing trade group pointed to the “huge chunks” of telephone callers who would be exempted from the new regulations, including pollsters, political candidates and nonprofit organizations such as charities.

“I think the consumer has the opinion that all of a sudden these calls are going to stop,” when in fact they will not, said Mac Hansbrough, a member of the board of directors of the American Telemarketing Assn.

In Orange County, opposition to fax restrictions was been spearheaded by Steve Ridinger of Irvine, who helped organize the National Fax Users Committee. Ridinger caused some commotion in 1989 when he bombarded the governor’s office in Connecticut with unsolicited faxes urging the veto of a state bill designed to check abuses of telephone facsimile machines. His group also sent a flurry of the protest faxes to Connecticut businesses.

Despite his reservations about the bill, Hansbrough said he welcomes the provision that would allow individuals to declare their home phones off-limits to telephone sales tactics.

“People that don’t want to be called shouldn’t be called,” he said. “Why waste the money?” However, Hansbrough said he thought that relatively few people would choose to be on the don’t-call list.

Hansbrough said that most of the 850 companies in his association are opposed to computer-driven sales pitches made by auto-dialers.

Rep. Edward J. Markey (D-Mass.), chief sponsor of the bill, along with Sen. Ernest F. Hollings (D-S.C.), said the final measure was a compromise that takes into account the demand for privacy and the legitimate requirements of business.

“The aim of this legislation is not to eliminate the brave new world of telemarketing but rather to secure an individual’s right to privacy that might be unintentionally intruded upon by these new technologies,” Markey said.

“I believe that telemarketing can be a powerful and effective business tool, but the nightly ritual of phone calls to the home from ‘strangers’ and ‘robots’ has many Americans fed up,” he said.

Times staff writer Dan Weikel contributed to this story.