Report Criticizes Brokers for Cold Calling : Investing: House panel says the securities industry isn’t doing a good job of complying with law governing brokers’ sales calls.

A report Monday by a House subcommittee gave the securities industry low marks for compliance with a 2-year-old federal law meant to curb nagging phone calls from stock brokers seeking new business.

The Telephone Consumer Protection Act of 1991 requires brokerage firms to maintain lists of people who do not wish to receive unsolicited “cold calls” from brokers.

But the staff report--issued by Rep. Edward J. Markey (D-Mass.), who until the end of the year remains chairman of the House subcommittee on telecommunications and finance--gave the 50 biggest brokerage firms an overall grade of “C/C+” for their performance under the law.

Based on a survey of the firms, the Markey report found that many made it extremely difficult for customers to get their names on “do-not-call” lists. It also faulted firms for failing to adequately train brokers about cold-calling rules and exploiting a loophole in the law by having non-brokers make many of the calls.

In testimony before Markey’s subcommittee in September, Securities and Exchange Commission Chairman Arthur Levitt Jr. had said cold calling remained a major problem that risked damaging Wall Street’s reputation. In recent years, cold calls have generated thousands of complaints from people repeatedly contacted at home and work. The subcommittee estimates that 75,000 stock brokers make 1.5 billion cold calls per year.

The subcommittee’s staff said individual firms’ do-not-call lists were not working well. The report also urged the Federal Communications Commission to again consider creating a centralized national database of people who do not want to receive such calls.

The survey found that some firms do not put customers’ names on do-not-call lists unless the customers use extremely specific language requesting it. For example, one firm’s written policy, quoted in the report, told brokers not to add names to the list even when the person called told a broker to never call again. Rather, the policy said a name should be added to the list only if a person specifically requested being put on a do-not-call list or asked that no one at the firm ever call again.

The subcommittee did not name the firm in question, nor did it single out any of the 50 brokerages for individual criticism.

But the report concluded: “In the English language, ‘Don’t call me again!’ means ‘Don’t call me again!’ It is time that broker-dealers . . . understood this and ceased their linguistic shenanigans.”

In general, the report found that brokerages had distributed written guidelines on cold calling to employees.

Although Wall Street received low marks on complying with the law, it did slightly better than the telemarketing industry, which sells other goods and services over the phone and is covered by the same law. A subcommittee staff member said that industry had gotten marks in the “D” range in an earlier study.