New Telemarketing Rules: a Primer

By Elizabeth Schwinn

The federal do-not-call registry, which takes effect next month, prohibits commercial calls to the more than 48

million people who have signed up for the list, but it permits calls seeking charitable donations. Some charity callers, however, will be required to meet new standards as part of other changes to federal telemarketing rules.

The changes apply to calls made by telemarketing companies hired by charities, as well as to companies making commercial sales pitches. Charities that use their own employees or volunteers to make solicitation calls are exempt from all of the changes.

Government regulators say the changes are needed to protect consumers and to cut down on the irritation caused by some telemarketing practices.

But many telemarketing companies say that complying with the rules could require expensive new equipment and may make it necessary to pass millions of dollars in new costs on to charities and others who hire telemarketers. Some nonprofit groups are challenging the federal telemarketing rules in court.

Except where noted, the rules take effect October 1. Among the changes affecting charities and the telemarketing companies they hire:

• At the beginning of the call, telemarketers must “promptly and clearly” state that the purpose of the call is to ask for donations, and they must state the name and address of the charity on whose behalf they are calling.
• Companies must create a “do-not-call” list for each charity they represent. Although telemarketers calling for charities are exempt from the national registry, they are required to honor individual requests not to be called again on behalf of a particular charity. Each violation is subject to an $11,000 fine.
• Effective January 29, 2004, a telemarketing company cannot block its phone number and identification from appearing on caller ID systems.
• Callers who use automated dialing systems must no longer allow “dead air” time after a call is answered but before a telemarketer comes on the line. The rules specify that a person or recording should greet callers within two seconds of when a call is answered. Telemarketers say that much of the automated dialing equipment used by companies representing charities is not sophisticated enough to meet the new standard.