FTC May Raise DNC List Fees

The Direct Marketing Association has sharply criticized the Federal Trade Commission’s proposal to raise fees for telemarketers to participate in the national do-not-call registry.

The FTC has suggested boosting the annual fee to $45 for each area code of data accessed, up from $25. The maximum amount that any entity would be charged for access to 280 area codes of data or more would be raised from $7,375 to $12,375.

“This is a 67% tax increase and it comes just after the FTC made so much fanfare about how the [program] is working,” said DMA spokesman Louis Mastria.

This action would continue to allow all entities that access the registry to obtain the first five area codes of data for free, and permit those entities that are exempt from the registry’s requirements to obtain access at no charge.

Mastria said the DMA would study the proposal and submit comments to the FTC by its June 1 deadline but does not anticipate taking any further action before then.

As Mastria suggested, a top executive at the FTC has acknowledged that direct marketers are complying with the do-not-call rules.

J. Howard Beales III, the FTC’s director of consumer protection, said the agency has received some 300,000 complaints. The do-not-call file now has 60 million numbers listed.

“One complaint for every 200 numbers is remarkably good compliance,” said Beales, speaking at the DMA’s recent Government Affairs Conference.

Of those, most were against entities that had only one slip-up. Only a handful of miscreants received multiple complaints.

Meanwhile, the FTC was preparing to file its report on the viability of a do-not-e-mail list.

Beales was reviewing a draft when this issue went to press, and anticipates meeting the June 16 deadline set by Congress. He gave little insight on what the report will contain, but did reiterate doubts he’s expressed before.

“It’s no secret that we’ve been concerned about enforceability for the do-not-e-mail system from the beginning,” he said.

Beales stressed that the current mandate from Congress requires only that the FTC report on the list’s viability.

“Congress required us to come up with a plan and timetable for a do-not-e-mail registry,” he said. “It didn’t require us to do it, or give us the resources we would need to do it.”

Beales anticipated that there would be a hearing no matter what the FTC recommends. But he did note that, unlike the do-not-call list, there is no concurrent procurement track for the do-not-e-mail list.

For one thing, the magnitude of procurement would be much greater. For another, the future of the do-not-e-mail list is much more nebulous.

“I can’t imagine putting out a proposal and a procurement request” for the do-not-e-mail list,” he said.

Not that his agency hasn’t been active in current e-mail regulation. On April 19, it published changes for sexually explicit e-mail labels in the Federal Register. The changes allow the warning notice in the subject line for such messages to be shortened, providing a little more space for the sender to describe the contents. This change takes effect May 19.

Beales also detailed the frustrations the FTC has encountered in tracking spammers internationally.

“People point their finger at [the United States] and say, ‘You are the source of all spam,’” he said. “They have realized quickly that passing an opt-in law doesn’t make the problem go away.”

The FTC has aggressively pursued 60 cases across the globe, with each one requiring a sequence of subpoenas to determine who was behind the unsolicited messages.

“When you find that person, that’s the first time you know if you’ve got a big fish or a little fish. And they may or may not be in the United States,” Beales continued.

He added that many countries divide anti-spam and fraud activities between two organizations, making coordinating international enforcement difficult.

Beales noted that the FTC also is reviewing comments made regarding changes to the Fair Credit Reporting Act, particularly a requirement mandating that all credit agencies make reports available to consumers once a year. A report is due June 16.

And the FTC is examining how consumers could receive reports from all three credit bureaus via a single telephone call, and is proposing to phase in the offer geographically and gradually, moving across the country from west to east over nine months to avoid a crush of consumers demanding their credit status.