The Telephone Consumer Protection Act

The effort to curb the number of unwanted and uninvited calls from businesses began more than a decade ago, when Congress passed the Telephone Consumer Protection Act (TCPA) of 1991. The TCPA imposed restrictions on such telemarketing tools as automatic telephone dialing systems and artificial or prerecorded voice messages, and barred the sending of unsolicited faxes. The act also called on the Federal Communications Commission (FCC), which oversees the telecommunications industry, to consider ways to address the wishes of telephone subscribers who disliked receiving unrequested phone solicitations. One such measure included the establishment of a "single national database" of residential phone numbers of people who object to receiving telemarketing calls.

However, the FCC, responding to mass marketers' lobbying clout and perhaps also fearful of the technical challenges such a database would pose, held off on creating the national registry. Instead of a nationwide registry controlled by the government, the FCC expressed support for industry efforts at self-regulation, such as the Telephone Preference Service (TPS) of the Direct Marketing Association (DMA), an industry trade group that represents about 80% of the firms that use telemarketing.

The TPS is a free service for consumers who do not want to be contacted by telemarketers. Under the system, consumers can contact the DMA and sign up for a "do not call" list that the trade group makes available to its members. Although the industry touts the TPS as an effective service, consumer advocates say it has largely failed to curb telemarketing calls. Private Citizen, a consumer advocacy group, derides TPS as a toothless service that contains loopholes that allow telemarketers to continue calling consumers whose names are on the list. The group sees TPS as nothing but an effort by telemarketers to preempt government regulation of their industry.

During the 1990s and early 2000s, telemarketing gradually became hugely profitable. The telemarketing surge gained momentum in the late 1990s, as phone costs declined and new technologies, like computerized "predictive dialers," were introduced. Such devices dial many phone numbers at once; after the device picks up a voice on the other end of the line, it transfers the call to a live representative, or hangs up if no representative is available. Because telemarketers no longer have to waste time dialing numbers that might not have a recipient at the other end, predictive dialers have increased the time solicitors spend talking to a human to 50 minutes per hour, from 20 minutes per hour.

Sources

"A New Internet Democracy?" Economist (July 24, 2003)

Banner, Stuart. "It Isn't So Easy to Put Those Marketers on Hold." Washington Post (October 5, 2003): B3.