September 29, 1992
TO: BROKER/DEALER ADVISORY COMMITTEE NO. 29-92
COMPLIANCE COMMITTEE NO. 17-92
DIRECT MARKETING COMMITTEE NO. 37-92
OPERATIONS COMMITTEE NO. 31-92
SALES FORCE MARKETING COMMITTEE NO. 38-92
SEC RULES MEMBERS NO. 43-92
SHAREHOLDER COMMUNICATIONS COMMITTEE NO. 31-92
UNIT INVESTMENT TRUST COMMITTEE NO. 55-92
RE: FCC ADOPTS RULES TO IMPLEMENT THE TELEPHONE CONSUMER
PROTECTION ACT OF 1991
__________________________________________________________
As you may recall, last December, the "Telephone
Consumer Protection Act of 1991" (the "Act"), which regulates
certain telemarketing activities, was signed into law. The Act
required, among other things, that the Federal Communications
Commission adopt rules to implement methods and procedures to
protect residential telephone subscribers’ privacy rights from
unwanted telephone solicitations. The FCC recently announced its
establishment of procedures for this purpose. The new rules (the
actual text of which is not yet available) will be effective on
December 20, 1992. Copies of a press release and a question and
answer release describing the new rules are attached.
According to the attached materials, the FCC considered,
but decided against, requiring the creation of a national do-not-
call database. Instead, the rules adopted by the FCC will
require all telemarketers to maintain company-specific do-not-
call lists, to keep track of persons who have requested not to be
called at home. In addition, the rules will prohibit
telemarketers from making telephone solicitations to residences
before 8:00 a.m. or after 9:00 p.m. Consumers will be able to
sue telemarketers in state court to enjoin violations of the Act
or the rules, or to recover damages of up to $500.
The Act defines "telephone solicitation" to exclude any
call made to a person with that person’s prior express invitation
or permission, or to a person with whom the caller has an
established business relationship. The attached question and
answer release indicates that the new FCC rules define
"established business relationship" to mean "a prior or existing
relationship formed by a voluntary two-way communication between
the telemarketer and the residential subscriber with or without
an exchange of consideration, on the basis of an inquiry,
application, purchase or transaction by the residential
subscriber regarding products or services offered by the
telemarketer, which relationship has not been previously
terminated by either party." The Institute’s comment letter to
the FCC recommended that this term be broadly defined.
In addition to regulating telephone solicitations to
residences made by live persons, the rules adopted by the FCC
will impose restrictions on the use of automatic telephone
dialing machines, prerecorded or artificial voice messages and
telephone facsimile machines.
The text of the new FCC rules will be circulated to you as
soon as possible.
Frances M. Stadler
Assistant Counsel
Attachment