Industry executives were of at least two minds about the federal court ruling that effectively threw out the Federal Trade Commission’s national do-not-call list.
U.S. Judge Lee R. West of the U.S. District Court ruled that the FTC lacks authority to run the registry, but the immediate impact of the ruling was not clear. For one thing, West did not direct the FTC to take any action.
The list, which now has the names and phone numbers of 50 million consumers who do not want to receive telemarketing calls, was set to take effect Oct. 1.
The ruling resulted from a lawsuit brought by the Direct Marketing Association, InfoCision Systems, U.S Security, Chartered Benefit Services Inc. and Global Contract Services Inc. And they were quick to applaud the ruling.
“The DMA and its fellow plaintiffs are grateful that the Federal District Court in Oklahoma City understood and upheld industry’s belief that the Federal Trade Commission (FTC) does not have authority to implement and enforce a national do-not-call list,” said DMA president H. Robert Wientzen in a statement. “The DMA, however, acknowledges the wishes of millions of U.S. consumers who have expressed their preferences not to receive telephone-marketing solicitations–as evidenced by the millions of phone numbers registered on the FTC list.”
The DMA said it will work with its attorneys, the FTC and the Federal Communications Commission over the coming days to evaluate the practical implications of the decision and its effects on marketers consumers.
. Other industry observers felt differently about the ruling.
“Not everybody in the industry is going to agree with me but I think this decision is going to exacerbate the situation,” said Marty Abrams, executive director of the Center for Information Policy Leadership at Hunton & Williams. “The do-not-call lists were what the public wanted.”
Abrams said the industry is going to have to work harder to counteract its image of being rude and invasive of personal privacy and warned that legislation further restricting the use of personal data for marketing purposes is likely if the industry does not pay attention to the wishes of consumers.
FTC Chairman Timothy J. Muris was also displeased with the decision.
“The U.S. District Court for the Western District of Oklahoma has ruled that the FTC exceeded its authority in creating the National Do Not Call Registry,” Muris said in a statement. “This decision is clearly incorrect. We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls.”
In his 19-page decision, West ruled that the FTC lacked statutory authority to oversee a national do-not-call list.
“Admittedly the elimination of telemarketing fraud and the prohibition against deceptive and abusive telemarketing are significant public concerns; however, an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress,” West wrote. “Absent such a grant of authority in this case, the court finds the do-not-call provision to be invalid.”
The telemarketing industry estimates that the do-not-call list could cut its business in half, costing it up to $50 billion in sales each year.
More than a dozen states with do-not-call lists plan to add their lists to the national registry this summer, the FTC said.
Telemarketers would have to check the list every three months to see who doesn’t want to be called. Those who call listed people could be fined up to $11,000 for each violation.
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