Companies have been charged for abandoning outbound calls to consumers by failing to connect the call to a live telemarketer within two seconds after a consumer answers.

At the time the Federal Trade Commission (FTC) announced its intention to create a National Registry, more than two dozen states had some form of a do not call list.

The National Do Not Call Registry provides consumers with a means to limit unwanted telemarketing calls. Within 10 days of its launch in 2003, over 10 million consumers added their number to the Registry. Over 19 million numbers were added to the Registry in 2007, bringing the total registered Do Not Call telephone numbers to 145 million.

At the time the Federal Trade Commission (FTC) announced its intention to create a National Registry, more than two dozen states had some form of a do not call list. Seven states - Indiana, Louisiana, Missouri, Tennessee, Texas, Wisconsin, and Wyoming - still maintain their own lists and have not shared those telephone numbers with the National Registry.

The FTC issued the amended Telemarketing Sales Rule (TSR) on January 29, 2003. The amended Rule gives the FTC and state attorneys general law enforcement tools to combat telemarketing fraud, give consumers added privacy protections and defenses against unscrupulous telemarketers, and help consumers tell the difference between fraudulent and legitimate telemarketing.

Who Must Comply with the Amended TSR?
Download the complete Telemarketing Sales Rule: 68 Fed. Reg. 4580-4679 (January 29, 2003).

The amended TSR regulates "telemarketing" defined in the Rule as "a plan, program, or campaign to induce the purchase of goods or services or a charitable contribution" involving more than one interstate telephone call.

With some important exceptions, any businesses or individuals that take part in "telemarketing" must comply with the Rule. This is true whether, as "telemarketers," they initiate or receive telephone calls to or from consumers, or as "sellers," they provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment. It makes no difference whether a company makes or receives calls using low-tech equipment or the newest technology such as voice response units (VRUs) and other automated systems. Similarly, it makes no difference whether the calls are made from outside the United States; so long as they are made to consumers in the United States, those making the calls, unless otherwise exempt, must comply with the TSR's provisions. If the calls are made to induce the purchase of goods, services, or a charitable contribution, the company is engaging in "telemarketing."

Certain sections of the Rule apply to individuals or companies other than "sellers" or "telemarketers" if these individuals or companies provide substantial assistance or support to sellers or telemarketers. The Rule also applies to individuals or companies that provide telemarketers with unauthorized access to the credit card system.

See detailed guidance on the TSR here.

Do Not Call telephone numbers are available for download from the FTC's Do Not Call website by paying a fee per area code. The only information about consumers that companies receive from the National Registry is the registered telephone number.  Companies also may check a small number of telephone numbers at a time via interactive Internet pages.

The current annual fee per area code is $62 - with the first five area codes provided at no cost - with the maximum annual fee for accessing the entire National Registry being $17,050. At the beginning of 2009, the annual fee per area code will become $54 - with the first five area codes provided at no cost - with the maximum annual fee for accessing the entire National Registry decreasing to $14,850.

Violating the National Registry subjects telemarketers to civil penalties of up to $11,000 per violation. Civil penalty actions are filed by the DOJ on behalf of the FTC. In most cases, the Commission seeks relief in federal court, such as injunctions against future violations, consumer redress, and disgorgement of profits.

The Registry accepts registrations from both land-line and cell phones. Federal Communications Commission (FCC) regulations prohibit telemarketers from using automated dialers to call cell phone numbers. Telemarketers are barred from calling consumers on their cell phones without their consent.

Over 66,000 companies paid $21.6 million for access to the National Registry last year alone. The FTC reports that $80 million in fees have been collected for access since the Registry's inception.

Certain entities can access data from the National Registry without having to pay a fee. These include entities that access five or fewer area codes of data in a year, as well as entities that are exempt from the do not call requirements of the Amended TSR, but that voluntarily access the National Registry in order to avoid calling consumers who do not wish to receive calls.

Exempt organizations include entities that engage in outbound telephone calls to consumers to induce charitable contributions, to raise funds for political purposes, or to conduct surveys. They also include entities engaged solely in calls to persons with whom they have an established business relationship or from whom they have obtained express written agreement to call, pursuant to the Amended TSR and who do not access the National Registry for any other purposes.

As of September 30, 2007, the FTC had filed 25 cases alleging violations of the National Registry and had reached settlements in 22 of these cases.

Under the terms of court orders announced by the Federal Trade Commission just today, two companies have agreed to pay a total of $95,000 for calling consumers whose telephone numbers are on the National Do Not Call (DNC) Registry and failing to connect the call to a live telemarketer within two seconds after a consumer answers.

Another recent action was against FMFG dba American Adjustable Beds. FMFG allegedly called consumers under the guise of taking a survey of consumers' sleep habits. FMFG defendants then made a sales pitch to consumers. While genuine survey calls are exempt from the do not call provisions of the Commission's Amended TSR, sales calls are not. In May 2007, the Court ordered the company to stop violating the Amended TSR and pay a $900,000 civil penalty.

"These settlements reemphasize that we expect marketers to comply with the Telemarketing Sales Rule (TSR)," said Lydia Parnes, Director of the Commission's Bureau of Consumer Protection. "But, if or when they don't, the FTC will take action to protect consumers' privacy."

A recent independent survey conducted in October 2007 by Harris Interactive found that of the 72% of Americans who had registered their telephone numbers for the "Do-Not-Call Registry," 18% reported that they currently received no telemarketing calls, 59% reported that they still received some, but far fewer than before they signed onto the Registry, and 14% said they received some, but a little less than before they registered.

Consumers can register their telephone and file complaints by calling a toll-free number or over the Internet. The process is fully automated. During 2007, the FTC received over 1.2 million complaints from 433,065 unique registered telephone numbers - approximately 0.3% of the total registered numbers.

On February 15, 2008, Congress passed the Do-Not-Call Registry Fee Extension Act of 2007 establishing the fees that entities accessing the National Registry will be required to pay beginning in 2009, and the Do-Not-Call Improvement Act of 2007, eliminating the automatic removal of registered numbers.