Judge Rejects DMA Lawsuit to Block US Telemarketing Rules

27 March 2003

Citing “strong public interest”, US District Court Judge Lee R West threw out an injunction sought by America’s Direct Marketing Association to block new ‘do not call’ telemarketing rules introduced by the Federal Trade Commission .

In a seven-page ruling Judge West refused the DMA’s demand for a preliminary injunction to halt rules due to take effect March 31 as part of the build-up to the introduction of a national ‘do not call’ list in September.

Said Judge West: “There is a strong public interest against abusive and invasive practices and acts by the telemarketing industry and the court finds that the public interest is best served by immediate enforcement.”

Ahead of the list’s introduction, two related rules will take effect at the end of this month. The first imposes a stipulation on telemarketers to ask consumers for their credit card details a second time if – having made one sale during the call – the agent succeeds in selling a second product. The FTC believes this may give the consumer pause to consider their decision to make a second buy.

The other rule places limitations on the use of so-called ‘predictive dialing’, whereby telemarketers’ computers are programmed to dial more calls than can be handled by available telemarketing staff. Presently, this results in some 5% of “dropped calls” – those answered by a consumer only to be confronted by a dead line.

The FTC requires this level to be reduced to 3% as of the end of March, and will later impose a requirement for a recorded message giving the caller’s name and number.

The DMA declared itself “disappointed” by Judge West’s ruling. But the telemarketers are not beaten yet: two other suits challenging the rules are pending, and one filed by the American Teleservices Association is also seeking a preliminary injunction.

Data sourced from: AdAge.com; additional content by WARC staff