Once 50 million Americans had signed up not to receive marketing cold calls, did the US marketing industry bow meekly to the inevitable? No way. Two separate legal challenges were mounted and the fight goes on.


Topic: Telemarketing
Who: The Federal Trade Commission, the US Direct Marketing Association and others
Where: Denver, Oklahoma and Washington DC
When: September/October 2003

What happened:

It looked for one moment as if the highly popular introduction of a Federal US "Do not call" list had been stopped in its tracks.  Effective 1 October 2003, the Federal Trade Commission had proposed a national list of individuals who did not wish to receive marketing cold calls.  The move was extremely popular.  Within a matter of a few weeks, no less than 50 million Americans had signed up.

Telemarketers who after September 2003 mistakenly called individuals who had registered on the list would be subject to FTC enforcement action.

The annual cost for organisations to access phone numbers in the Do not call list will be $25 per area code with a maximum annual fee of $7,375 to access numbers for the entire country. 

Businesses accessing the list must previously certify under penalty of law that they are accessing the register solely to prevent telephone calls to telephone numbers on the register.  More information is available here.

All seemed set fair for the system to go live 1 October 2003, when the measure came under attack in the Court for the Western district of Oklahoma.  The claimants included the US Direct Marketing Association.  They argued that the Federal Trade Commission's initiative was unconstitutional because it had not been done with an unambiguous grant of authority from Congress.  The Judge agreed and halted introduction of the new rules.

Within days, the judgement was set to nought by the passing of a congressional measure to put right the alleged unconstitutionality.  But the battle wasn't over.  Within a day the measure faced another challenge.  This time is was from the American Teleservices Association.  One of the challenges was on free speech grounds, under the first amendment to the US Constitution.  This arose out of the exemption from the do not call regime of calls made to encourage charitable donations.  The claimants' rights were violated, the argument ran, because by allowing telemarketers from charitable organisations to continue to call numbers on the list, even though commercial firms would be barred from doing so, the measure discriminated against speech based upon content and identity of speakers and suppressed far more speech than was necessary.  This argument was upheld by US District Court Judge Edward Nottingham and because this was a first amendment objection it could not be so easily remedied by Congress.

At that point, therefore, the scheme could not go ahead on 1 October without a further court ruling, but that was exactly what happened.

The Court of Appeal in Denver ruled that telemarketers must abide by the Do not call register pending the Court's further decision on whether Judge Nottingham's adjudication should be upheld.

Why this matters:
So at the time of writing, the Federal Trade Commission is not blocked from administering and enforcing the Do not call rule, at least not for the time being.

The US Direct Marketing Association has called on its members to abide by the decision of the court and the wishes of consumers, but it has still sounded a note of caution by voicing a broad range of concerns.  This, despite a poll of American households during the period October 1-5, which indicated that 72% of households reported that having registered for the list, this was either effective or very effective in reducing calls.

Amongst the DMA's concerns are the fact that the government registry does not serve as a one stop shop for consumers and marketers owing to dozens of separate state do not call lists that exist in parallel.  They also object to the high cost of accessing the list and a lack of proper authentication procedures built into the internet registration process.  The next stage in the litigation is oral argument in the appeal, which is due for 10 November 2003.

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