Senate Bill 771 - Unsolicited Telephone Sales Calls

By Liz Figueroa

California was one of the few major states in the Nation that did not offer protection from unwanted telemarketing phone calls. Now, with increasing frequency, people are even getting telemarketing calls on their cell phones. SB 771 solved this problem.

For years consumers have complained bitterly about unwanted telephone solicitors intruding into their homes with a barrage of calls - often timed to disturb family meals. As direct marketing technology has improved, and as more and more businesses seek to exploit the passive income that comes from selling information about their customers, the problem has exploded. While annoying for everyone, such calls pose unique threats to those vulnerable to high pressure sales tactics of even legitimate businesses and outright scam artists: the elderly and disabled. Now, with cell phones, telemarketers can literally follow you wherever you go.

BACKGROUND: SB 771 would follow the lead of such ideologically diverse states (e.g., Florida, New York, Idaho, Kentucky, Arkansas, Tennessee, Missouri, Texas, Colorado, Louisiana, Georgia, Oregon, and Indiana) in creating a state-managed "Do Not Call" list that allows consumers the choice of "opting out" of telephone solicitations

Business groups have touted "opt out" strategies, such as this, as their favored way of protecting privacy because those who "opt out" are uniquely unlikely to respond favorably to unwanted solicitations, whether by direct mail or telephone. For this reason, "Do Not Call" lists are a "win-win" for both consumers and businesses. Businesses will not squander overhead and goodwill on those individuals who are not going to respond positively to unsolicited calls and consumers have the ability to remain private and secluded in their own homes, if they so choose.

Finally, Californians enjoy a particularly broad, constitutional right to privacy. Art. I, Sec. 1. Courts have held that this right applies with particular force to the privacy of the home.

PROPOSAL: Simply described, Senate Bill 771 would allow consumers the choice to have their name placed on a list/database maintained by the Attorney General. Any solicitor that calls into California would be subject to this law, and the penalties created by it.

Consumers, for a fee not exceeding $1.00 for three years, could place their names on the list. Telephone solicitors, if they wanted to call Californians, would be required to purchase the list at cost and on a sliding scale (depending on the size of the business), and would be forbidden from calling anyone on the list. For instance, New York's list costs $500 per year to solicitors. While precise implementation details are left to a regulatory process, the bill requires that the list be made available in a variety of technology-friendly formats, including CD-ROM.

A telephone solicitor who nevertheless called a consumer would be subject to civil and criminal liability. A civil penalty by prosecutors of $500 for the first violation would be imposed, plus $1,000 per each violation thereafter. Injunctions and attorneys' fees and costs would also be permitted. Criminal liability would be imposed because existing law makes it a crime for telephone solicitors to violate provisions regarding advertising, and SB 771 expands those advertising restrictions. Individuals could easily and conveniently sue to enforce the law for an injunction to enforce the law, and obtain civil penalties of up to $1,000 in small claims court if the injunction is violated.

Consumers would have the choice to exempt from the "Do Not Call" list calls from particular business or charitable entities, so that the consumer could still receive wanted solicitations.

SB 771 also contains an exemption for lawful debt collection. It likewise exempts phone calls made in response to the request of a consumer, or in response to an ad placed by the consumer. As well, SB 771 allows a solicitor to write to a consumer on the list to obtain the consumer's permission to call them and, in keeping with other states and federal law, exempts existing business relationships. However, if a business with which a person has an existing business relationship calls a person on the list, and the person invokes their right under federal law to be placed on the businesses' own individual "Do Not Call" list, the bill requires that all companies that share the brand name of the business # whether or not they themselves called -- honor the consumer's request.

Finally, charities and political calls are exempted, and small businesses with less than five employees where the principal of the business him or herself makes the call in their local area are also exempted.