States Attempting to Hang Up on Telemarketers

The bankers didn’t want it, nor the telephone companies, mortgage brokers or newspapers. Virtually every business that drums up customers by phone was against it.

But a measure allowing residents to put their name on a “do not call” list for telemarketers swept through both houses of the Indiana Legislature unanimously, even though some lawmakers said privately they didn’t want it, either.

The sponsor, Rep. Dale Sturtz, admits that Indiana’s new telemarketing law--and similar but often weaker laws in other states--won’t stop every annoying call. But most Hoosiers were sick and tired of being pestered, and some wanted action.

“This is by far the most popular bill I have ever carried,” Sturtz said.

When Loleta Steed of Sturtz’s hometown of LaGrange heard about the bill, she called to say she was all for it. “They come at all times of the day and night, and they’re very interruptive,” she said. “It would help if just some of them were cut out.”

The telemarketing industry says legitimate companies respect consumer privacy through in-house no-call lists or those kept by trade associations. It also notes some protections are afforded by federal law.

But some states aren’t satisfied. At least 21 have laws prohibiting certain telemarketers from soliciting people who put their names on official lists, according to the National Conference of State Legislatures.

In 1988 Florida became the first state with a no-call measure, primarily intended to protect senior citizens. More than 300,000 New Yorkers have signed onto a no-call registry kept by that state’s consumer protection agency since last October.

In May, Indiana enacted a measure staunchly supported by state Atty. Gen. Steve Carter, who made the issue a key part of his campaign last year.

Federal law requires a company to honor an individual request that a person not be called again, but it doesn’t stop countless other telemarketers from initially calling that person. State laws offer broader protections.

Carter said Indiana’s law is among the strongest in the nation because it includes only a handful of exceptions.

Charities, newspapers, insurance agents and real estate agents can all call private homes, provided they use local employees rather than professional telemarketing firms.

Other telemarketers will be barred from calling listed consumers beginning Jan. 1. Those that ignore the list would risk penalties ranging from a warning to fines of $25,000.

“I don’t think I’ve ever seen an issue where the public wanted relief so much, yet on the other side we had some very well-funded interests who opposed giving the public what they wanted,” Carter said.

The Direct Marketing Assn. says state measures such as Indiana’s are largely redundant because of the federal telemarketing law.

The New York-based association keeps and distributes its own no-call list to its 5,000-plus members. There are more than 3.5 million names on the list, said Jerry Cerasale, the DMA’s senior vice president for governmental affairs.

“It’s a win-win for the consumers and the marketers,” he said. “If you don’t want me to call you, I don’t want to spend the money to call you.”

The DMA also says state no-call laws could become a costly administrative headache because companies will have to keep track of the people on multiple lists, and because state laws differ.

Despite some bad players, the DMA says telemarketers are valuable to the U.S. economy. According to the group, direct telephone market employment reached more than 5.7 million in 2000, with total sales of $6.1 billion.

Not all states have had success with their laws.

Kentucky has one with 22 exemptions. In a February news release, Kentucky Atty. Gen. Ben Chandler dubbed the measure “embarrassing,” saying 95% of calls were not affected.

He proposed a bill to close many of the loopholes and create a “zero call” list for people over age 70, who could request that all calls be stopped. It failed to pass.

Other state laws often are inadequate, said Robert Bulmash, president and founder of Illinois-based Private Citizens Inc., a for-profit company that charges consumers $20 to be put on a no-call list that is distributed to more than 1,500 companies.

Many laws exempt prior business relationships and require consumers to file formal complaints with their state attorney general’s office, he said.

“When Joe Six Pack sits down to watch the baseball game, he doesn’t know the attorney general from Gen. Patton,” Bulmash said. “I would say to some extent [the laws] are successful, but to a greater extent they are used to placate the public, to make them think they have some protection.”

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On the net:

Indiana’s law:

www.state.in.us/legislative/bills/2001/HE/HE1222.1.html

Direct Marketing Assn.:

www.the-dma.org