The Direct Marketing Industry and the
Sham of Self-Regulation

The principal proponents -- and sole beneficiaries -- of UBE are the companies and trade associations involved in the direct marketing industry. This industry, thwarted by numerous court decisions affirming the right of property owners to forbid access to their property for intrusive advertising, seek to take away that right from property owners. Congress must recognize this attempt for what it is and not be fooled by the disingenuous words of the direct marketing industry.

The mask presented to Congress by the direct marketing industry is completely opposite the face it presents to the public. When before Congress, the FTC or other regulatory bodies, industry representatives take great care to appear reasonable and responsive to the public interest.

However, the June 1998 issue of TeleProfessional, a trade publication supportive of the telemarketing industry, reveals that industry's true nature. In a commentary, the editor stated: "[W]e are extremely disturbed by what appears to be an industry response to legislation and regulation that is based more on slight [sic] of hand and evasion than compliance." (The article was reprinted at with the permission of the publisher; however, members of the telemarketing industry, alarmed that their history of non-compliance was exposed, succeeded in getting the permission withdrawn).

Representatives of the direct marketing industry have claimed that the majority of its members abide by the relevant laws and regulations, and that it is the fly-by-night operators who do not comply. TeleProfessional's investigation proved, however, that this claim is an outright lie.

TeleProfessional sent requests to ATA members for copies of their Do-Not-Call policies which the Telephone Consumer Protection Act (47 U.S.C. § 227; text reproduced at requires telemarketers to maintain and provide to consumers upon request. Three months after these requests were made, fewer than one-third of those contacted had complied with the statutory requirements.

Major companies were among those who failed to comply, including several members of Telewatch, an industry watchdog group which pledged to abide by a higher standard than that required by law. TeleProfessional revealed the sham of this posturing.

The TeleProfessional editor was deeply dismayed with these results. The publication had been actively promoting industry legitimization through a process in which industry representatives work with legislative and regulatory bodies to formulate workable guidelines of practice, backed by substantial penalties for non-compliance. Their study showed that, seven years after enactment of the TCPA, this effort was a miserable failure.

Some telemarketers were not even aware that their activities were governed by federal law, or believed, without basis, that they were exempt from its provisions. Others seemed to view the regulations as nothing more than "guidance" useful for providing a "good sense of direction." Few seemed willing to acknowledge the fact that the Telephone Consumer Protection Act and the Telemarketing Sales Rule is law and quite specific in its requirements.

Some of the major, well-known companies who have repeatedly refused to provide copies of their Do-Not-Call policies are AT&T, America Online, McGraw-Hill and Hearst Corporation. AT&T has not only consistently refused to comply with the law (an act which entails a $500 fine per incident), it has also used its attorneys to intimidate those who reported or complained about AT&T's non-compliance, as well as consumer groups reporting on AT&T's practices.

The direct marketing industry's record of self-regulation is atrocious. Jon Kaplan, former president of the American Telemarketing Association (ATA), declared that the ATA would not take action against one of its members, even if one was found guilty in court, unless a government agency took action first. In other words, the ATA, notwithstanding its public stance promoting self-regulation, will discipline a member only when the government initiates proceedings. Even a finding by a court that a member has failed to abide by the law is not sufficient for the ATA to take action. This is not self-regulation in any sense of the term.

The direct marketing industry's cavalier attitude toward regulation, its pervasive non-compliance with Do-Not-Call rules and related regulations, has led to an increase in complaints and enforcement actions, as well as a quadrupling of requests to be added to the Telephone Preference Service. Moreover, the industry's contempt of the public interest is made obvious by the fact that the ATA and the Telephone Marketing Council of the Direct Marketing Association refuse to respond to inquiries from consumer-interest groups.

The TeleProfessional editor concluded that:

As an industry, we are acting like petulant children. Requests for information about ethics policies, mechanisms to complain about abuse and other public domain information are, according to the reports, routinely rejected, and those asking for the information subject to either offhand dismissal or profane diatribes.
Remember: this is a statement from a publication friendly to the direct marketing industry.

The direct marketing industry, having already made clear its contempt for the rule of law and the public interest, must not be granted additional rights to invade citizens' privacy and appropriate their property without compensation. Given that the industry does not even comply with the minimal restrictions Congress and the FTC imposes, it is completely unrealistic to expect the industry to comply with regulation of e-mail abuse. The direct marketing industry has proven time and time again that it will cheerfully ignore the requirements of the law. Such renegade and criminal behavior should be punished, not rewarded with additional rights and privileges which will only create new opportunities for abuse.

By Nick Nicholas, last revised: Feb. 2, 2000.

Contact Me   About Me