October 28, 1992
TO: BROKER/DEALER ADVISORY COMMITTEE NO. 32-92
COMPLIANCE COMMITTEE NO. 21-92
DIRECT MARKETING COMMITTEE NO. 42-92
OPERATIONS MEMBERS NO. 42-92
SEC RULES MEMBERS NO. 54-92
SALES FORCE MARKETING COMMITTEE NO. 43-92
SHAREHOLDER COMMUNICATIONS COMMITTEE NO. 34-92
UNIT INVESTMENT TRUST MEMBERS NO. 54-92
RE: FINAL FCC TELEMARKETING RULES
__________________________________________________________
As you may know, the FCC recently announced its adoption of
rules and regulations to implement the Telephone Consumer
Protection Act of 1991 ("Act"). (The Act required the FCC to
adopt rules to protect residential telephone subscribers’ privacy
rights from unwanted telephone solicitations.) The FCC’s Report
and Order containing the text of the new rules is attached.
The rules prohibit the initiation of a "telephone
solicitation" to a residential telephone subscriber (1) before 8
a.m. or after 9 p.m. local time at the called party’s location
and (2) unless the caller has instituted procedures for
maintaining a list of persons who do not wish to receive
telephone solicitations from that caller. Such procedures must
include, among other things, a written policy for maintaining a
do-not-call list, training of personnel involved in any aspect of
telephone solicitation with respect to the existence and use of
the do-not-call list and requirements regarding recording of do-
not-call requests and disclosure of such requests to others.
The Act and the new rules define "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 FCC rules
define "established business relationship" as "a prior or
existing relationship formed by a voluntary two-way communication
between a person or entity and a 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 such person
or entity, which relationship has not been previously terminated
by either party." Based on the Institute’s efforts, the
legislative history of the Act contains language to the effect
that calls by a mutual fund manager to existing shareholders or
follow-up calls to investors who may have written to a fund or
responded to an ad requesting additional information fall within
the established business relationship exclusion.
Although calls not meeting the definition of a "telephone
solicitation" (e.g., because they are made to persons with whom
the caller has an existing business relationship) are not subject
to the restrictions contained in the FCC rules, the attached
Report and Order emphasizes that even persons with whom the
caller has an established business relationship can revoke
consent to future solicitations by requesting that they no longer
receive calls from that telemarketer. Such a request terminates
the business relationship for purposes of the FCC’s rules, and
subjects the caller to the do-not-call requirements.
In addition to regulating telephone solicitations to
residences made by live persons, the rules adopted by the FCC
impose restrictions on the use of automatic telephone dialing
machines, prerecorded or artificial voice messages and telephone
facsimile machines.
The new rules go into effect on December 20, 1992.
Frances M. Stadler
Assistant Counsel
Attachment