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Attorney General To FTC: Do Not Preempt State "No Call" Programs Protecting Consumer Privacy

Friday, April 12, 2002
Contact: (415) 703-5837

(SACRAMENTO) – Attorney General Bill Lockyer joined today with 49 state attorneys general in calling on the Federal Trade Commission to avoid preempting "No Call" programs already underway in 21 states, including California.

"The FTC must ensure that any federal ‘No Call' program does not thwart aggressive state efforts to protect consumer privacy and curb unwanted telephone solicitations," Lockyer said in summarizing written comments sent by the state attorneys general to the federal agency which is considering establishment of a national "No Call" registry and various changes to federal telemarketing sales rules.

No Call registries to reduce unwanted telephone solicitations are operating in 16 states and being implemented in five other states, including California. California's "Do Not Call" program was enacted with a specified January 1, 2003, start-up date.

Lockyer noted that state attorneys general are concerned FTC preemption could result in consumers actually losing protections now available under state "No Call" programs since the FTC lacks jurisdiction over several industries engaged in extensive telemarketing activities such as telecommunications, banking and insurance. Those industries and intrastate calls are covered under the "Do Not Call" registry being implemented in California. The state attorneys general also urged the FTC to consider making any federal "No Call" registry compatible with state data banks and ensure adequate enforcement.

On other changes to the federal Telemarketing Sales Rule, the state attorneys general welcomed the proposed strengthening of restrictions against telemarketing abuses. Recent state enforcement actions have been brought against companies for abuses in the transfer and use of consumer billing by multiple vendors – particularly those using "trial offers" which require the consumer to affirmatively cancel an offer to stop charges.

The state attorneys general urged a prohibition of most so-called pre-acquired account telemarketing which would essentially require a telemarketer to obtain a consumer's billing information from the consumer rather than other companies. The FTC was commended for proposing to limit the methods that telemarketers can use to acquire "express verifiable authorization" to make electronic debit withdrawals from consumers' bank accounts. Legislation on this issue sponsored by Attorney General Lockyer has been introduced in the California Legislature.

The state attorneys general also supported the FTC's proposal for additional disclosure requirements for sweepstakes promoters and offers of credit card protection plans – both longtime sources of consumer complaints. In particular, the FTC is proposing to require sweepstakes telemarketers to disclose that buying products in the offer will not improve a consumer's chance of winning. This provision borrows from precedent set by several national settlements between sweepstakes marketers and state attorneys general. The FTC also is proposing to require sellers of liability protection for credit cards to disclose that federal law already limits liability to $50 per account.

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