On December 22, the Federal Trade Commission issued its biennial report to Congress on the use of the National Do Not Call Registry, which is the database maintained by the federal government listing the telephone numbers of individuals who have requested that telemarketers not call them.
According to the report, 3.8 million phone numbers were added to the Registry in fiscal year 2017, and the Registry now has more than 229 million active registrations. In addition, in fiscal year 2017, over 18,000 sellers, telemarketers, and exempt organizations subscribed to access the Registry, with 2,259 of those entities paying fees totaling more than $12.6 million for access to the database.
The report also notes that advances in technology have increased the number of illegal telemarketing calls made to telephone numbers on the Registry. For instance, telemarketers are now able to use Voice over Internet Protocol (“VoIP”) technology to make calls inexpensively from anywhere in the world. They also now are able to easily fake the caller ID information that accompanies their calls, thus concealing their identity from consumers and law enforcement. According to the report, the “net effect of these technological developments is that individuals and companies who do not care about complying with the Registry or other telemarketing laws are able to make more illegal telemarketing calls cheaply and in a manner that makes it difficult for the FTC and other law enforcement agencies to find them.”
Consistent with that finding, between 2009 and 2017, the number of consumer complaints about illegal telemarketing calls has more than quadrupled – from 63,000 complaints per month in fiscal year 2009 to nearly 185,00 complaints per month in fiscal year 2017.
The report also discussed the impact of the established business relationship exemption, which allows a telemarketer to call an individual who has recently made a purchase or payment, and to return a call to an individual who has recently made an inquiry, even if the individual’s telephone number is listed on the Registry.
According to the FTC, many consumers think that telemarketing calls that fall within the established business relationship exemption are improper because they do not realize that they have an established business relationship with the telemarketer. That perception is especially likely when the relationship between the consumer and the telemarketer arises from a brief, one-time transaction, or when the business identified in the telemarketing call and the business with whom the consumer has a relationship are technically part of the same legal entity but seem to be separate entities because they use different names or market different products.
The report reiterated the FTC’s position that “whether calls by or on behalf of sellers who are affiliates and subsidiaries of an entity with which a consumer has an established business relationship fall with the [established business relationship] exception depends on consumer expectations.” In other words, the FTC will ask whether consumers are likely to be surprised by the call and find it inconsistent with placing their names on the Registry.
In addition, the report noted that telephone calls from telemarketers to phone numbers provided by lead generators generally do not fall within the established business relationship exemption because, while the consumer may have an established business relationship with the lead generator, they generally do not have an established business relationship with the entity that purchased the leads. According to the FTC, unless the consumer inquired into the services of a specific business, or the lead generator made disclosures that would alert the consumer that he or she should expect telemarketing calls from the business as a result of his or her communication with the lead generator, the business cannot claim that it has an established business relationship with the consumer such that it can ignore the consumer’s registration on the Do Not Call Registry.
The FTC’s biennial report is available here.