Contractors who rely on telemarketing for lead generation are finding the going a bit rougher this summer. That's because consumers have begun registering for a national do-not-call list, part of a group of amendments to the FTC's Telemarketing Sales Rule. The TSR applies to interstate phone calls intended to sell goods or services. Companies have one month to remove registered numbers from their call lists before being assessed penalties of up to $11,000 per violation.

Telemarketers will also be charged to use the national registry. The fee is $29 per ZIP code per year, but companies can have access to the full list for $7,250 annually. Companies will be required to "scrub" their call lists at least every three months.

In separate lawsuits, both the Direct Marketing Association (DMA) and the American Teleservices Association charge that the FTC would overstep its statutory authority in creating and maintaining a national do-not-call list. D.S. Berenson of McLean, Va.-based Johanson Berenson LLP, a legal firm specializing in construction law, says that the suits have some merit. "The creation of a national do-not-call registry is arguably a privacy issue," he says. "The FTC was originally structured to deal with issues involving fraud and consumer protection."

Cathy MacFarlane, director of public affairs for the FTC, says she cannot comment on specific issues raised in the impending lawsuits. However, she says the ongoing litigation would not impede implementation of the registry unless the courts intervened.

Louis Mastria, director of public and international affairs for the DMA, says his organization is not opposed to the idea of a national do-not-call list, only to FTC control of it. "The DMA created the idea of a do-not-call list in 1985," Mastria says. That list, which now contains more than 7.5 million phone numbers, must be honored by DMA members and is also used outside the membership.

The FTC list will not replace lists that are in effect in 26 states, raising concern that compliance will be excessively burdensome for telemarketers. "Sellers will be faced with a quagmire of conflicting federal and state regulations," Berenson says.

The "established business relationship" exemption to the amendments will allow sellers to call registered consumers within 18 months of the last purchase or payment by that consumer and for three months after receiving an inquiry or application. Once contacted, however, consumers who ask must be placed on the company's own do-not-call list.

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