A Monthly Review of Issues Affecting Commercial Telemarketing by Copilevitz & Canter, LLC, Attorneys at Law

June, 2001

GRAMM-LEACH BLILEY ACT
The Commodities Futures Trading Commission has proposed rules implementing the privacy protections of Gramm-Leach Bliley with regard to telemarketing. The proposed rules prohibit any entity from providing account numbers or access numbers to third parties for use in telemarketing. The broad nature of the Gramm-Leach Bliley coverage will result in numerous agencies implementing similar regulations applicable to specific types of businesses, e.g., banks, option traders, etc.

The FCC has published its final rule concerning slamming. The commentary to the final rule includes comments regarding automated third-party verification systems which states that certain types of these systems contradict the intent of the rules which is to guarantee an independent evaluation of the sale. If your company uses automated third-party verification, you should examine your script with regard to this rule. Also, please contact me if you would like to discuss the provisions of the final slamming rule.

STATE "DO-NOT-CALL" LISTS
With Louisiana added to the list of states with "do-not-call" laws, we have revised our charts summarizing ordering information as well as exemptions for the various lists. Please contact me and I can email or fax you a copy.

U.S. SUPREME COURT
The United States Supreme Court recently decided a decision involving the First Amendment and the disclosure of taped conversations. A newspaper disclosed the contents of a lawfully obtained tape of a conversation which had been obtained in violation of the United States' wire-tapping law and Pennsylvania's wire-tapping law. Although the Court held that the intercepted parties privacy interests were trumped by the First

Amendment in the situation, it is unlikely that the case will have much impact on the state of federal and state treatment of monitoring of telemarketing conversations.

ARIZONA
Arizona has passed a revision to its telemarketing law which substantially expands the definition of "telephonic seller." Arizona is no longer a "prize" state which requires registration only if certain representations are made in a script. You should review your exempt status in the state in the near future.

CALIFORNIA
Officials at Pacific Gas and Energy in California have announced plans to use "blast faxing" and an autodialer to deliver messages to consumers when they may be affected by rolling blackouts. It will be interesting to see if a class action is brought over the details of PG &E's "do-not-call" policy.

The California Senate is considering a bill which would apply restrictions to membership organizations which use telemarketers. The organizations would be required to disclose that consumers need not provide billing information in order to be charged a membership in circumstances in which the telemarketer has prior access to the member's billing information. Similar restrictions regarding pre-acquired credit card information are being considered in several other states.

CONNECTICUT
The DMA has reported that Connecticut's "do-not-call" list now contains almost half its citizens' names. Most of these lists are growing at fast rates in other states, as well.

DELAWARE
The Senate has passed a bill which would amend the state's telemarketing law to require that a telemarketer furnish a copy of its registration statement to any consumer who requests one and which would create a state "do-not-call" list.

LOUISIANA
House Bill 175 has been adopted into law in Louisiana creating a state "do-not-call" list. The list exempts calls placed on behalf of 501(c)(3) or (c)(6) organizations unless the organization uses paid professional solicitors. The list is to be implemented on January 1, 2002. The state will charge consumers $5 to sign onto the list for a five year period. As you know, distinguishing between charities based on whether or not they hire professional solicitors is forbidden by the First Amendment pursuant to the Riley decision. Copilevitz & Canter is currently in the initial phases of preparing a challenge to another state's "do-not-call" list. Please contact me if you would like details of this challenge and/or would like to support this action.

MAINE
The State of Maine has passed a law which amends its registration requirement for telemarketers, currently known as the "Transient Sellers"Law. As part of the registration, telemarketers will be required to provide a letter of recommendation from an appropriate trade association that promotes sound and ethical trade practices in the industry.

MICHIGAN
Is considering a bill which would prohibit insurance companies from disclosing customers'account numbers to any non-affiliated third party for use in telemarketing or other marketing.

MARYLAND
The State of Maryland has passed a law which directs the Public Utilities Commission to promulgate rules concerning telemarketing for change of utility provider in the state in the new deregulated market.

NEW YORK
The New York Senate is considering a bill which would amend the state's telemarketing law to regulate how the telemarketers use pre-acquired consumer credit card information. The bill would require that telemarketers either obtain written authorization for charges or the consumer's credit card number prior to billing the account.

TEXASThe Texas Legislature has passed a bill which prohibits telemarketers from blocking consumer telephone identification devices and which would create a state "do-not-call" list. The bill will now be considered by the Governor.

The authors make every attempt to provide current, accurate information, but Telemarketing ConnectionS® is not intended to be a substitute for legal counsel, and readers should not use it in lieu of obtaining knowledgeable legal, or other professional, counsel expert in the field of commercial telemarketing law. References in Telemarketing ConnectionS® do not constitute endorsement by Copilevitz & Canter, L.L.C. or Telemarketing ConnectionS®. June 1, 2001, Copilevitz & Canter, L.L.C.