With their seemingly incessant calling, pushy tactics and impersonal demeanour, telemarketers long ago became the bane of society. Telemarketing activity, while good for business, became such a nuisance that federal laws and regulations have been passed to restrict the annoying activity. Regulating such issues as when telemarketers can conduct business, whom they can call and what industries qualify as exceptions to the regulation, these laws made considerable progress in stemming the tide of telephone sales calls.
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Although telemarketing -- in its present form, at least -- did not originate until the middle portion of the 20th century, early telephone regulations came about under the Communications Act of 1934. As telemarketing activity grew and businesses began exploiting its profitability, the marketing tactic was initially wrapped into federal regulations starting with the Telephone Consumer Protection Act of 1991. The law's scope was expanded to focus on telemarketing activity in The Telemarketing and Consumer Fraud Act and Abuse Protection Act of 1994, and a 2002 amendment to the act implemented currently recognised regulations.
Under the Telephone Consumer Protection Act of 1991, telemarketing firms were restricted to making sales calls only during the hours of 8 a.m. and 9 p.m. in the called time zone. While this regulation is widely observed (many telemarketing agencies begin calling only after 9 a.m. as a courtesy to their clients), the law does allow some exceptions. A customer who expressly asks to be contacted at a specific time, for example, may be called outside the legal window.
As digital telephone switching technology advanced and the Caller Identification (Caller ID) service penetrated a broader segment of the market, the 2003 amendment placed specific identification requirements on outbound telemarketing calls. Under the amendment, telemarketers must send caller identification (known as automatic number identification, or ANI) with each outgoing call. In addition, the number sent to be displayed on Caller ID boxes must be a valid number that the called customer can dial to reach a representative of the telemarketing company. Partly because of misinterpretations of the law, and partly because of technological limitations, compliance with this requirement remains somewhat spotty.
In addition to hours of operation and line identification requirements, other regulations govern the process through which telemarketers work. Telemarketing firms are prohibited, for example, from calling any number listed on the national "Do Not Call" (DNC) registry, or any number belonging to a customer who has expressly asked the telemarketing company to stop calling. In addition, telemarketers may not debit a customer's bank account without express, verifiable permission from that customer, and must always recap the total charges before accepting payment of any kind. Telemarketers must disclose the sales nature of their call and identify the name of the seller, and they may not misrepresent any fact about the product or service being offered. For a full list of regulations, visit the FraudGuides.com list of federal telemarketing regulations.
While telemarketing regulations have far-reaching impacts in the telemarketing industry, certain types of organisations are exempt from many restrictions. Financial institutions, for example, fall under the jurisdiction of the Securities and Exchange Commission and cannot be regulated by the rules established by the Federal Trade Commission. Long distance and local telephone carriers, known as "common carriers," are also exempt, as their operations are controlled by the Federal Communications Commission. Finally, political organisations like the Democratic and Republican national committees are not generally subject to telemarketing regulations.
Federal law calls for stiff penalties -- up to £7,150 per violation -- for breaking telemarketing rules. Many states also impose fines on violators, but the called party must report the violation before any action can be taken. Most states maintain a website or hotline for registering complaints, and federal-level complaints may be lodged at the DoNotCall.gov website.
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