Do Not Call: Proposed FTC rules could hurt. (Telemarketing).

It would be a crime if a for-profit telephone direct response marketer, calling on a charity's behalf, solicited a donation from a person if the individual was on a "Do Not Call" registry being proposed by the Federal Trade Commission (FTC).

The FTC during January proposed the Do Not Call registry and other changes to the Telemarketing Sales Rule (TSR). Congress passed the Telemarketing Consumer Fraud and Abuse Prevention Act in 1994 making possible the TSR's issue in 1995. The TSR makes it necessary for telemarketers to immediately tell a consumer the nature of a call, what products or services are being offered, and for prize-promotions that no purchase is necessary to win. It also prohibits telemarketers from calling before 8 a.m. and after 9 p.m.

The USA PATRIOT Act, signed into law Oct. 26, 2001 authorizes the FTC to expand the TSR to cover calls soliciting charitable contributions. Currently, the TSR covers only calls made to sell goods and services, according to an FTC statement.

The proposed changes do not apply to a charitable nonprofit organization making its own (in-house) telemarketing calls, an FTC spokeswoman said.

And, the application of the USA PATRIOT Act applies only to for-profits calling for charities, not all nonprofits, said Lee Cassidy, executive director of the Direct Marketing Association's (DMA) Nonprofit Federation.

The FTC also proposes to exempt from the TSR calls made on behalf of certain religious organizations, said FTC Commissioner Orson Swindle in a statement.

Under the Do Not Call proposal, consumers will be able to call a toll-free number to put their telephone number on a national list, making it illegal for telemarketing businesses to call.

Exceptions would exist for the Do Not Call registry. For example, a company could call a number on the list if it received that person's "express verifiable authorization" to call, an FTC statement said. Although no specific way of obtaining authorization is in the proposal, it could be obtained through a telephone recording or written approval, an FTC spokeswoman said.

Telemarketing professionals are watching closely the Do Not Call list proposal, which will negatively impact many telemarketing companies that specialize in nonprofit fundraising.

"There are a number of firms to whom it represents huge hunks of its business," Cassidy said. Specific numbers were not available from the DMA.

Paulette Maehara, CEO of the Association of Fundraising Professionals (AFP), estimated that between 60 and 70 percent of charitable organizations use for-profit telemarketers.

"Most nonprofits -- even universities who use students principally as their callers -- use outside firms to manage and train the program," Maehara said. "The confusing thing for us is if charities are exempt, which is what this says, but yet for-profit firms must comply, then what does that for-profit firm do with the charity. They (the FTC) have caused great confusion over how it would be applied."

At least one for-profit telemarketing company says the industry already self-regulates by using a "Telephone Preference List" available from The DMA. That list, which is free to consumers to get on, has more than 4.5 million numbers on it, according to The DMA.

"We feel that an additional and a national list is simply unnecessary, a waste of tax dollars and redundant," said Steve Brubaker, senior vice president at InfoCision Management Corporation (IMC) in Akron, Ohio. InfoCision is a telemarketing company, which generates about 75 percent of its business from nonprofits.

If passed, a national "Do Not Call" registry would take months before it took effect, the FTC said.

The FTC and the 50 state attorneys general enforce the TSR in federal court. The TSR has resulted in more than $152 million in consumer compensation and $500,000 in civil penalties, according to the FTC.

The FTC will take public comment on the proposal through March 22, and will hold a public forum June 5-7 to talk about issues raised in public comments, according to the FTC.