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Update on Do Not Email Registry, New Gift Certificate Law and Telemarketing Rules

FTC Concludes Do Not Email Registry Is Not Feasible at this Time

After conducting a three-month study, the Federal Trade Commission concluded that a national Do Not Email registry would not reduce the amount of unwanted commercial email and could not be effectively enforced.  In addition, such a registry could increase the amount of unwanted commercial email if emailers used the registry as a list of valid email addresses.  A better solution, according to the FTC, is to develop a “robust” email authentication system that would “prevent spammers from hiding their tracks” and evading Internet service providers’ spam filters.  The FTC will host an Authentication Summit in the fall to study this possibility.

New Gift Certificate Law and Bills

Louisiana enacted a new gift certificate law which takes effect on August 15, 2004.  Under the law, a gift certificate may not contain an expiration date that is less than five years from the date of issuance, and no service or dormancy fees are permitted, except for a one-time handling fee of no more than one dollar per gift certificate. 

Bills regulating gift certificates have recently been sent to the Governor for signature in three states.  In Hawaii, H.B. 2143 would prohibit service fees, including dormancy and inactivity fees.  In Illinois, S.B. 2901 would amend existing law and would allow dormancy and service fees if certain conditions are met.  In South Carolina, H.B. 4688 would permit expiration dates as long as they are clearly disclosed and certain conditions are met, and would allow service and dormancy fees, as long as they are clearly disclosed. 

New Jersey Telemarketing Rules

The New Jersey Division of Consumer Protection issued new rules for telemarketers that became effective on May 17, 2004.  The rules – which New Jersey officials are calling the toughest in the nation - exceed many federal telemarketing requirements, impose onerous record-keeping requirements, require detailed information about telemarketing companies and executives, require certain disclosures at the beginning of most telemarketing calls, and severely limit the existing business relationship exemption.  Fines may reach $10,000 for a first offense and $20,000 for subsequent offenses. 

Disclosures – a telemarketer must provide his or her name, the name of the telemarketing company, the name of the seller, and the purpose of the call.

State and Federal Do Not Call lists – telemarketers are prohibited from calling a number on the New Jersey DNC list (with certain exceptions), and the NJ DNC list incorporates the numbers on the federal DNC registry.

In-house DNC list – telemarketers must also maintain an in-house DNC list and must honor a request to be added to the in-house DNC list within 30 days’ of receipt. 

Exceptions and exemptions – The New Jersey rules provide a few exceptions and exemptions, but they are much narrower than those of federal law and laws of other states.  This means that exemptions or exceptions that might be available to you under federal law or other state laws – particularly as they relate to existing or established customers - may not apply to telemarketers in New Jersey.

The rules also prohibit telemarketing calls to mobile phones (except by the mobile phone service provider) and calls to existing customers by the seller’s affiliates. 

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

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