Legislature passes telemarketing no-call bill

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From the ashes of Senate Bill 93 rose a new telemarketing no-call bill and, unlike its predecessor, it awaits the signature of the governor.
House Bill 1405, according to proponents, is exactly the same as the previous bill, but in addition prevents “junk” faxes to customers. Initially, it had many other restrictions, such as limiting calls from nonprofit groups, but in its final form looks very similar to SB 93, which was voted down 6-4 in committee.
Although proponents of the bill see a clear future for protecting consumers from unwanted solicitors, most businesses hear static.
“This entire bill, I believe, will be ineffective,” said Tim Jackson, director of the Colorado chapter of the National Federation of Independent Business.
The bill allows consumers to sign up on a no-call list. Telemarketers are required to buy the list, at a price of up to $500, depending on the size of the organization. The list would be updated every 30 days beginning July 1, 2002, or whenever access to the list is initially available. Companies that violate the rule will be subject to a three-strikes-and-you’re-out rule.
For example, if a company selling credit cards makes three mistakes —calling three different people on the no-call list —- within one month, the attorney general will look into the matter. In some instances, where it could be reasonably assumed a company was unaware of the list, warnings will be given. However, in the future, each call made to someone on the list will result in a $2,000 fine up to a maximum of $100,000.
The bill does not prevent all solicitations; calls from political parties, nonprofit groups or charities, or those conducting polling or surveys are still permitted, as are those from any business that established a relationship with a customer in the last 18 months, despite the original intentions of the bill’s authors.
Those exceptions are part of the reason why state Sen. Andy McElhany, R-Colorado Springs, was against the bill.
“It’s a classic case of politicians passing laws that affect everyone else, but not themselves,” said McElhany.
McElhany said some polling calls are just a foot-in-the-door technique that often lead to a solicitation. And people who call as a representative of a nonprofit group can still call and try to solicit funds from consumers, he said.
Dave Emerick, regional director of government relations for Household International, a finance company, said the bill would hinder business calls and hurt his company’s business.
The bill will probably be enacted in August, as it becomes effective 90 days after Owens signs it. At that time the Public Utilities Commission will set up meetings for public input on the bill, and the PUC can then consider adding provisions to the bill, said Garth Lucero, deputy attorney general for the state.
McElhany said the bill “stifles competition,” because of the pre-existing relationship clause, but the PUC is unable to do much about that.
“The PUC has no authority to supersede statutes,” he said. “They can try and change the statute but there doesn’t seem to be any support for doing that.”
Meanwhile Emerick might be among those at the meetings trying to make changes. He said one problem with the bill is the database the state will use for the no-call list. Most other states attach names to the phone numbers in their database; Colorado doesn’t.
“For verification purposes our database has to be retooled just to comply to get the numbers,” he said. “We are subject to penalties if we do not comply with the law, but we have no guarantee about the information we are getting from the database being even 80 percent accurate.”
Emerick also said he isn’t sure if the bill will affect out-of-state telemarketing businesses, potentially hurting Colorado’s businesses more than others.
“The law applies to everyone that does business in Colorado, but he (Lucero) can’t prosecute people in 49 states,” McElhany said.
However, Lucero said enforcement of the bill would be no different from how other laws are carried out.
“If a business chooses to transact any business by advertising in the state then they subject themselves to the laws of Colorado,” said Lucero. He said the attorney general’s office would contact the business for violations and if needed, sue from Colorado.
Despite the tug and pull between proponents and opponents, Lucero said many people believe it’s a good business law.
“It allows businesses to weed out the telephone numbers of people who don’t want to receive phone calls and have gone out of their way to get on the list,” he said.
“We ask if they would bang on the door with a sign saying ‘no solicitations’ and they say, ‘no,’ but this bill does the same thing.”