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New Jersey Division of Consumer Affairs

NEW JERSEY REGISTER
VOLUME 36, NUMBER 3
MONDAY, FEBRUARY 2, 2004
RULE PROPOSAL

LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
TELEMARKETING: DO NOT CALL


Proposed New Rules: N.J.A.C. 13:45D

Authorized By: Reni Erdos, Director, Division of Consumer Affairs.

Authority: N.J.S.A. 56:8-119 et seq., (P.L. 2003, c.76).
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2004-49.

Take notice that, pursuant to N.J.S.A. 52:14B-4(a)3, the Division of Consumer Affairs in the Department of Law and Public Safety will hold a public hearing on the notice of proposal that follows. The hearing shall be held by the Division as set forth below:

Date: Wednesday, February 25, 2004
Time: 10:00 A.M.
Location: Auditorium
Seton Hall Law School
1 Newark Center
Newark, New Jersey

The public hearing shall be conducted by a hearing officer. A verbatim transcript of the hearing will be prepared by a certified stenographic reporter. Interested parties may obtain a copy of the transcript by ordering it directly from the reporter at the hearing or thereafter. Requests to speak should be submitted in writing to Eugene L. Brenycz, Hearing Officer, State of New Jersey, Division of Consumer Affairs, Office of the Director, PO Box 45027, Newark, New Jersey 07101, no later than one week prior to the public hearing. Specific presentation times will be assigned. Individual presentations will be limited to five minutes. Those who do not preregister to speak will be given an opportunity to speak only if time permits. Individual speakers are requested to provide one copy of their prepared remarks to the hearing officer on the day of the public hearing.

Submit written comments by April 2, 2004 to:

Eugene L. Brenycz, Hearing Officer

State of New Jersey

Division of Consumer Affairs

Office of the Director

PO Box 45027

Newark, New Jersey 07101

The agency proposal follows:

Summary

On May 21, 2003, Governor James E. McGreevey signed A727 (P.L. 2003, c.76), which supplemented the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. The new law prohibits unsolicited telemarketing calls to customers and places responsibility for enforcement of the Act with the Division of Consumer Affairs (Division). The Act declares it to be the policy of the State of New Jersey to have the broadest possible protections in place in order to protect its residents from unsolicited interruptions by telemarketers. The proposed new rules will require telemarketers to register with the Division and will establish the no telemarketing call list which will contain the telephone numbers of New Jersey residents who have registered for the National Do Not Call Registry maintained by the Federal Trade Commission or any other successive telemarketing registry created by the Federal government or any telemarketing registry established by the State. Telemarketers will need to purchase the list of telephone numbers of New Jersey customers on the National Do Not Call Registry from the Federal Trade Commission or, in the event that there is no Federal Registry, the Division will provide the list to registered telemarketers as part of their registration fee. By adopting the National Do Not Call Registry which contains the telephone numbers of New Jersey customers who have registered as its no telemarketing call list, the Division is saving money for the taxpayers of the State of New Jersey as the Federal Trade Commission is bearing the cost of establishing and maintaining the registry. The National Do Not Call Registry is available to the Division by download off the Internet at no cost. In addition, there is an added convenience as New Jersey residents will need to register for one registry and the no telemarketing call list will be available for enforcement purposes sooner than if the Division established a separate list. At the same time, by adopting the National Do Not Call Registry, the Division is making compliance easier for telemarketers as they will only need one list. In the event that a Federal Registry no longer exists, the Division will establish and maintain its own no telemarketing call list.

The proposed rules establish the means by which customers can diminish the disruption and interruption caused by unrestrained telemarketing calls. By placing their telephone number on the no telemarketing call list, customers will be able to reduce the number of telemarketing calls received. Customers may, however, continue to receive telemarketing calls from companies with whom the customer is an existing customer. Existing customers may end such calls by requesting that the telemarketer place his or her number on the telemarketer's company specific no telemarketing call list. Customers who have registered for the no telemarketing call list may continue to receive telemarketing calls from a specific company by providing that company their express written permission to call. Such permission to call may be rescinded by the customer at any time.

The Act and the proposed rules permit calls to be made to an established customer from a seller who has previously provided continuing services to the established customer.

In a separate proposal published on August 18, 2003 at 35 N.J.R. 3757(a), the Division has outlined the requirements that bidders must meet in order to qualify as the vendor who would establish and maintain the Division's no telemarketing call list. At present, the Division does not anticipate the need to do so, because the Division has decided to adopt the National Do Not Call Registry and it does not anticipate a present need to contract with a vendor. However, in order to facilitate such a contract in the future should the need arise, the Division may proceed to adopt the proposed vendor rule.

The following discussion summarizes the proposed rules which implement the Act.

Subchapter 1 sets out the purpose and scope of the rules and the relevant definitions. Proposed new rule N.J.A.C. 13:45D-1.1 states that the purpose of these rules is to regulate telemarketers and to enforce the do not call requirements of the Act and this chapter.

Proposed new rule N.J.A.C. 13:45D-1.2 sets forth the scope of the rules, which is to regulate telemarketers who make residential telemarketing sales calls in order to prevent New Jersey customers who have registered for the no telemarketing call list from receiving unsolicited telemarketing sales calls.

Proposed new rule N.J.A.C. 13:45D-1.3 defines a number of key words and phrases as they are used in the chapter including "continuing services," "customer," "no telemarketing call list," "existing customer" and "unsolicited telemarketing sales call." The Division defines "continuing services" as the performance of work, the provision of medical care or other professional services or the affording of access to a utility typically provided to an established customer on a recurring basis. "No telemarketing call list" is defined as the telephone numbers of New Jersey residents who have registered for the National Do Not Call Registry created and maintained by the Federal Trade Commission pursuant to the Telemarketing Sales Rule (16 C.F.R. 310) or any other subsequent telemarketing registry created by the Federal government or any telemarketing registry established by the State. "Existing customer" is defined as: (1) a person who is obligated to make payments to a seller on merchandise purchased; or (2) a person who has entered into a written contract with a seller where there is an obligation to perform, either by the customer, seller or both. "Unsolicited telemarketing sales call" is defined as any telemarketing sales call other than a call made: (1) in response to an express written request of the customer called; or (2) to an existing customer.

Proposed new rule N.J.A.C. 13:45D-1.4 sets forth a registration fee scale for telemarketers.

Subchapter 2 contains provisions concerning the no telemarketing call list. N.J.A.C. 13:45D-2.1 is reserved for the vendor qualification requirements which were proposed at 35 N.J.R. 3757(a) on August 18, 2003.

Proposed new rule N.J.A.C. 13:45D-2.2 stipulates that the no telemarketing call list is the list of telephone numbers of New Jersey customers on the National Do Not Call Registry created and maintained by the Federal government or any telemarketing registry established by the State.

Subchapter 3 contains the requirements for a telemarketer seeking to register with the Division. Proposed new rule N.J.A.C. 13:45D-3.1 states that no telemarketing sales calls shall be made to a customer in New Jersey unless the telemarketer is registered with the Division.

Proposed new rule N.J.A.C. 13:45D-3.2 requires each telemarketer to annually register with the Division by completing and submitting a registration application. The telemarketer is to provide the following information on the registration application: name and the street address from where telemarketing is to be conducted as well as any fictitious name; type of business organization; name and residence address of each officer, director and principal; name, residence and business address, as well as business telephone number, of each person with an ownership interest of more than 10 percent; name, residence and business address, as well as business telephone number, of each managing agent; telephone number(s) from which telemarketing sales calls will be made and the name of their telephone service provider; whether the entity and each officer, director, principal or owner of the telemarketing business has been held liable in an administrative or civil action involving theft, fraud or deceptive business practices; name and address of an agent in the State of New Jersey for service of process; and the name(s) and address(es) of the seller(s) whom the telemarketer has contracted with to make calls on behalf of, if any.

Proposed new rule N.J.A.C. 13:45D-3.3 requires each applicant to file a disclosure statement with the Division stating whether or not the officer, director, principal or owner has been convicted of any of the enumerated violations of the "New Jersey Code of Criminal Justice," Title 2C of the New Jersey Statutes, or an equivalent offense under the laws of any other jurisdiction. The Director may use this disclosure statement as a basis for denying, suspending or revoking a telemarketer's registration. The new rule also provides for an administrative hearing for a telemarketer after it has had its registration denied, suspended, or revoked under this regulation.

Proposed new rule N.J.A.C. 13:45D-3.4 requires the telemarketer to update its registration application or disclosure statement whenever any information changes by filing a notice in writing with the Director within 30 calendar days of the change.

Proposed new rule N.J.A.C. 13:45D-3.5 requires the telemarketer to submit the annual registration fee specified in N.J.A.C. 13:45D-1.4 with their annual registration application.

Proposed new rule N.J.A.C. 13:45D-3.6 requires that a telemarketer must continue to provide any assistance or information, and to produce any records requested by the Director, as well as to cooperate in any inquiry, investigation or hearing conducted by the Director.

Proposed new rule N.J.A.C. 13:45D-3.7 lists the circumstances under which the Director may refuse to issue or renew, or suspend or revoke a telemarketer's registration. A telemarketer whose registration has not been issued or renewed or has been suspended or revoked will be given an opportunity to be heard on the matter before any discipline is imposed.

Proposed new rule N.J.A.C. 13:45D-3.8 provides that the registration number issued to a telemarketer remains the property of the State of New Jersey and is to be immediately returned to the Director upon the suspension, revocation, or upon the Director's refusal to renew the telemarketer's registration.

Proposed new rule N.J.A.C. 13:45D-3.9 requires telemarketers to maintain a list of existing customers who have requested not to receive telemarketing sales calls from the telemarketer. Telemarketers may no longer call existing customers who have requested to be placed on these lists. Telemarketers must remove a customer's number from its calling list within 30 days of the customer's request. Telemarketers are also to maintain a list of a specific seller's existing customers who have requested not to receive calls from the seller and are to provide this list to the seller. Sellers are required to maintain a list of customers who have elected not to receive telemarketing sales calls and are to cease telemarketing sales calls to the customer within 30 days of the customer's request. If a seller contracts with a telemarketer to make telemarketing sales calls on its behalf, the seller shall provide the telemarketer with a list of customers who have requested not to receive telemarketing sales calls from the seller.

Proposed new rule N.J.A.C. 13:45D-3.10 lists the records that telemarketers must retain: sales scripts and written materials used for telemarketing purposes; the name, including any fictitious name used, home address, telephone number and job title of all current and former employees; phone records associated with telephone lines used for telemarketing; policies and procedure manuals; records and evidence of employee training in compliance with the do not call requirements; tape recordings of all sales calls if any are made; a log which includes the phone number, date and time that the telemarketing sales call was placed; requests to be placed on the telemarketer specific no telemarketing call list; and the telemarketer specific no telemarketing call list.

Sellers who use a registered telemarketer to make telemarketing sales calls on their behalf must retain: a list of customers who have requested not to receive telemarketing sales calls; express written permission from customers to allow telemarketing sales calls; requests to be placed on the list of customers who have requested not to receive sales calls; and evidence that a customer is an existing customer or that a continuing service is being provided to the customer.

Sellers who make their own telemarketing sales calls are required to retain both the records that telemarketers and sellers are required to retain.

The Division is aware that telemarketing, while a valid means to market merchandise to those willing to accept calls, also has incidences of fraud associated with such marketing techniques. Maintenance of records for a three- year period will facilitate vigilant enforcement of all remedies available under the Consumer Fraud Act.

Proposed new rule N.J.A.C. 13:45D-3.11 requires that telemarketers train their employees in the provisions of the Act and the rules in this chapter in order to ensure their compliance with the do not call requirements. Telemarketers are required to establish and put in place written procedures related to the requirements of the telemarketing rules.

Subchapter 4 deals with prohibited activities and the penalties that telemarketers may be assessed for a violation of the provisions of this chapter. Proposed new rule N.J.A.C. 13:45D-4.1 prohibits unsolicited telemarketing sales calls to a customer: within three months after the customer's telephone number first appears on the no telemarketing call list; between the hours of 9:00 P.M. and 8:00 A.M., local time of the customer; intentionally blocking the customer's use of caller identification; and calling a commercial mobile service device, unless the telemarketer is the customer's mobile service provider and the customer is not being charged for the call.

The proposed new rule would also prohibit telemarketing sales calls made to an existing customer on behalf of a seller's affiliates or by a seller whose sole obligation is the extension of credit 18 months after the customer's last credit transaction; or upon satisfaction of the credit obligation, whichever is later; or immediately upon the cancellation or termination of the agreement to extend credit and satisfaction of the credit obligation.

Proposed new rule N.J.A.C. 13:45D-4.2 provides that telemarketing sales calls can be made to a customer listed on the no telemarketing call list in the following situations unless the customer has specifically requested pursuant to N.J.A.C. 13:45D-3.9 that he or she not receive telemarketing sales calls: to an existing customer; or to an existing customer to whom the seller's sole obligation is the extension of credit so long as the call is made within 18 months of the customer's last credit transaction or until the satisfaction of the credit obligation, whichever is later. Telemarketing sales calls can also be made to a customer on the no telemarketing call list if the telemarketer has the customer's permission to make a telemarketing sales call to them.

Proposed new rule N.J.A.C. 13:45D-4.3 requires a person making a telemarketing sales call to disclose within the first 30 seconds of the call: his or her name; the name of the telemarketing entity making the call; the name of the person or entity on whose behalf the call is being made; and the purpose of the call.

Proposed new rule N.J.A.C. 13:45D-4.4 provides that a telemarketer may call an established customer to whom they have been providing a continuing service.

Proposed new rule N.J.A.C. 13:45D-4.5 sets forth defenses the telemarketer may assert to a charge that he or she made a telemarketing sales call to a customer who is on the Division's no telemarketing call list. The telemarketer will not be held liable for a violation of the Act or this chapter if: it possesses and has put into use a copy of the no telemarketing call list which is no more than three months old at the time the telemarketing call in question was made, and it has established and implemented written policies and procedures related to the requirements of the Act and this chapter; it has trained its personnel in the requirements of the Act and this chapter; it has records to show that they have complied with the above requirements; and any unsolicited telemarketing sales call made to a customer on the Division's no telemarketing call list is an isolated one made no more than one time in a 12- month period.

Proposed new rule N.J.A.C. 13:45D-4.6 provides that the penalties for a violation of the Act or this chapter are those contained in the "Consumer Fraud Act" at N.J.S.A. 56:8-13 and 14.3.

Subchapter 5 outlines the manner by which a customer may register for the no telemarketing call list. Proposed new rule N.J.A.C. 13:45D-5.1 states that a customer may register for the no telemarketing call list at the National Do Not Call Registry website, by calling the Federal government's toll-free registration number, by calling the Division's toll-free number which will transfer the caller to the Federal government's toll-free registration number or by using the link at the Division's website to the National Do Not Call Registry.

Proposed new rule N.J.A.C. 13:45D-5.2 provides a mechanism for a customer who wants to have his or her number removed from the no telemarketing call list. The customer may call the number provided by the National Do Not Call Registry number or call the Division's toll-free number which will transfer the caller to the Federal government's toll-free registration number and request that they be removed from the no telemarketing call list. The customer must call from the number they want to have removed from the no telemarketing call list.

As the Division has provided a 60-day comment period on this notice of proposal, this notice is exempted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3.

Social Impact

These proposed new rules will implement the law prohibiting unsolicited telemarketing sales calls to consumers who have signed up for the no telemarketing call list. The Legislature has found that public outrage increases along with the increased number of telemarketing calls. The increase in telemarketing calls has resulted in an increase in the number of interruptions to New Jersey citizens' privacy, family life and home sanctity at inconvenient times, such as after they have retired for the evening, are having a meal or are engaged in an activity in which an interruption would be unwanted. The proposed new rules will limit such unsolicited telemarketing sales calls while at the same time permit calls only to customers who are existing customers of the telemarketer or are receiving a continuing service from the telemarketer or seller on whose behalf the telemarketer is calling. The proposed new rules will also allow a customer to stop even these telemarketing calls by requesting that the telemarketer place them on the telemarketer's company specific do not call list.

The ban on calls to wireless telephones will benefit the consumers as they will no longer have to pay for unwanted calls or attempt to answer their wireless phone at inopportune or inconvenient times.

The Division is not yet able to estimate the number of telemarketers who solicit customers in New Jersey or the number of businesses who use telemarketers as part of their marketing, as the registration process has not yet been implemented. The proposed rules will impact telemarketers, the businesses that use their services and telephone companies, but this impact cannot be quantified as the number of telemarketers and businesses who use their services and the number of New Jersey residents who ultimately register for the no telemarketing call list are unknown. However, much of the impact has already been experienced as a result of the Federal telemarketing initiatives.

It is expected that the telemarketers and the businesses who use telemarketers may raise concerns about the proposed new rules. However, this expected reaction is more than balanced out by the expected positive reaction from the New Jersey resident who registers for the no telemarketing call list and who will experience the number of telemarketing calls they receive reduced. Moreover, the legislation has balanced the needs of the industry by including the ability to call existing customers or customers for whom they may have been providing a continuing service so as to ensure that businesses can communicate and customers may receive information about services they receive on an ongoing basis. These rules, ultimately, provide the choice to decide whether or not to receive telemarketing calls to the New Jersey citizen, not the telemarketer.

The proposed new rules will have a positive social impact by implementing the legislative objective to protect public privacy and the sanctity of homes and to protect families and individuals from unsolicited interruptions without unreasonably restricting telemarketing activity by providing customers with the option to participate in the no telemarketing call program.

Economic Impact

The proposed new rules will have an economic impact on telemarketers because they will be required to pay an annual registration fee in order to make telemarketing sales calls to New Jersey residents. This fee will be used to cover costs in administering the Act and these rules.

The Division also recognizes that the proposed new rules may have an additional economic impact on telemarketers as their pool of available customers will shrink as customers register for the no telemarketing call list. Revenues may decrease, but the amount is not quantifiable until the number of customers who register for the no telemarketing call list is known. However, this economic impact is already in play by virtue of the Federal telemarketing initiative. There will also be an impact on the businesses that use telemarketers to make sales calls for them. Their revenues may also decrease, but again the amount is not quantifiable until the number of customers who register for the no telemarketing call list is known. This decrease may depend on how many consumers eventually register for the no telemarketing call list. How many New Jersey consumers will ultimately sign up and what the economic impact that may have on telemarketers or the businesses for whom the call is difficult to estimate. As of the fourth week of November 2003, one and a half million New Jersey telephone numbers have been registered on the National Do Not Call Registry.

The proposed new rules will have a financial impact on telemarketers as they will have to maintain the following records: sales scripts and written materials that are sent to consumers; name and last known address of each purchaser, name, including any fictitious name used, home address, telephone number and job title of all current and former employees; phone records associated with telephone lines used for telemarketing; policies and procedure manuals; records and evidence of employee training in compliance with the do not call requirements; tape recordings of all sales calls if any are made; a log which includes the phone number, date and time that the telemarketing sales call was placed; requests to be placed on the telemarketer specific no telemarketing call list; and the telemarketer specific no telemarketing call list.

Any cost imposed on the telemarketer for record storage is outweighed by the benefit to both the Division in having these records available for enforcement and the telemarketer in having these records available as a defense outweighs the cost to the telemarketer for storing such records.

The proposed new rules will also have a financial impact on telemarketers in that the telemarketer will be required to establish and implement written procedures to comply with the Act and these rules and train their employees in the telemarketing rules and procedures. There is no way to discern exactly what these costs may be.

The Division does not believe that the proposed new rules will have any economic impact on the public as the fees that will be collected from registering telemarketers will be used to offset the costs to enforce the provisions of the Act and this chapter. Therefore, it is necessary that the registration fee be set at a level sufficient to fund enforcement measures.

Federal Standards Statement

A Federal standards analysis is not required because the proposed new rules are not proposed under the authority of or in order to implement, comply with or participate in any program under Federal law. The rules are proposed under the authority of New Jersey law, P.L. 2003, c.76, which does not incorporate or refer to Federal law, standards or requirements, although the rules utilize the Federal Do Not Call Registry. To the extent that the rules promulgated by the Federal Trade Commission (FTC) at 47 C.F.R. Parts 64 and 68 and the rules promulgated by the Federal Communications Commission (FCC) at 16 C.F.R. Part 310 may be considered Federal standards, the following statements apply: this proposal imposes some requirements on telemarketers which supplement the standards imposed by Federal law. States are permitted to impose more stringent requirements on telemarketers as the "Federal rules constitute a floor, and, therefore, would supercede all less restrictive state do-not-call rules." (FCC Report and Order 03-153, ∂ 81). Further, the Report and Order states that the FCC ". . . recognizes that states may adopt more restrictive do-not-call laws governing intrastate telemarketing" (Ibid, ∂ 82).

The Legislature passed and the Governor signed legislation that provided for a different approach for identifying the type of relationship which will enable a business to call customers. Rather than use the Federal "established business relationship," through the definitions of "continuing services" and "existing customer" the Division is effectuating the Legislative intent to look at the nature of the relationship between the telemarketer and customer. The intent of the Act and these rules is to provide the broadest protections to New Jersey residents from telemarketing sales calls.

There are no Federal standards on the registration of telemarketers.

The Federal rules go further than those of this State in some regards. For example, the FTC rules make it a violation for a telemarketer to abandon an outbound telephone call, that is to allow more than two seconds to pass from when a customer answers the telephone and when a sales representative connects to the call. No specific State provision relates to this issue, but the Division is authorized by 16 C.F.R. ß 310.7 to enforce the Federal rules.

Whether any additional costs beyond the registration fee will be experienced by telemarketers is speculative, and even if there are additional costs, they are outweighed by the benefit to be received by New Jersey residents who will no longer be barraged by unwanted and unsolicited telemarketing calls.

The standards proposed herein are achievable by consumers and telemarketers under current technology. Consumers may register or remove their numbers from the do not call list by telephone or the Internet. Telemarketers will either utilize the National Do Not Call Registry database for New Jersey numbers or the Division will provide a list if one is maintained independently by the State. The need for professional services, if any, and the cost of compliance will vary among the telemarketers.

Jobs Impact

The proposed rules may result in the loss of telemarketing jobs as the pool of available customers who may be called will shrink as consumers register for the no telemarketing call list.

Agriculture Industry Impact

The proposed new rules will not have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (RFA), N.J.S.A. 52:14B-16 et seq., requires the Division to estimate the number of small businesses to which the proposed new rule will apply. If, for the purposes of the Act, telemarketers are "small businesses" within the meaning of the statute, the following analysis applies.

The RFA requires the Division to set forth the reporting, recordkeeping and other compliance requirements of the proposal, including the kinds of professional services likely to be needed to comply with its requirements. The RFA further requires the Division to estimate the initial and annual compliance costs of the proposal and set forth whether the rules establish differing compliance requirements for small businesses.

The proposed new rules do not impose any reporting requirements.

The proposed new rules do impose recordkeeping requirements. Proposed new rule N.J.A.C. 13:45D-3.10 requires telemarketers to retain the following records for a three-year period: the no telemarketing call list; documentation attesting to the date of receipt of the no telemarketing call list; sales scripts and written materials used in a telemarketing plan, program or campaign; name and last known address of each customer; the merchandise or services purchased, the shipping date and the amount paid for the merchandise or service; name, including any fictitious name used, home address, telephone number and job title of all current and former callers; phone records associated with telephone lines used for telemarketing; policies and procedure manuals related to employee training in compliance with the do not call requirements; records and evidence of employee training in compliance with the do not call requirements; tape recordings of all sales calls if recordings are made; a log which includes the phone number, date and time of each and every telemarketing sales call; and the telemarketer specific no telemarketing call list.

Proposed new rule N.J.A.C. 13:45D-3.10 also imposes the following recordkeeping requirements on sellers who use a telemarketer to make telemarketing sales calls on their behalf: customer permission to allow telemarketing sales calls; a list of customers who have requested not to receive telemarketing sales calls from the seller; requests from customers who have asked not to receive telemarketing sales calls from the telemarketer; and evidence that a customer is an existing customer or that a continuing service is being provided. A seller who makes its own telemarketing sales calls must comply with both the recordkeeping requirements imposed on a seller and a telemarketer.

These recordkeeping requirements are necessary to ensure that the critical information in the possession of the telemarketer is retained so that the requirements of the Act and this chapter can be readily enforced by the Division.

The proposed new rules also impose the following compliance requirements. N.J.A.C. 13:45D-1.4 requires telemarketers to pay a registration fee to the Division. The fee schedule is graduated and is based on the number of telephone lines used to make telemarketing sales calls, which is an indication of business size.

N.J.A.C. 13:45D-3.1 requires telemarketers seeking to make residential telemarketing sales calls to register with the Division by submitting the registration application required by N.J.A.C. 13:45D-3.2, which is discussed above.

N.J.A.C. 13:45D-3.3 requires each applicant to file a disclosure statement, which is discussed above, with the Division.

N.J.A.C. 13:45D-3.4 requires the updating of the registration application and the disclosure statement within 30 calendar days of any changes.

N.J.A.C. 13:45D-3.5 requires the applicant to pay the registration fee required by N.J.A.C. 13:45D-1.4 when they submit their application. The registration fee is based on the number of telephone lines used for telemarketing, so as not to impose an undue impact on small businesses. The registration fee is further discussed in the Economic Impact statement.

N.J.A.C. 13:45D-3.6 imposes a continuing duty upon telemarketers to provide any assistance or information, and to produce any records requested by the Director, as well as requiring them to cooperate in any inquiry, investigation or hearing.

N.J.A.C. 13:45D-3.9 requires telemarketers and sellers to maintain a list of customers who have requested not to receive telemarketing calls from them. Sellers who contract with a telemarketer to make telemarketing sales calls on its behalf must provide the list to the telemarketer.

N.J.A.C. 13:45D-3.11 imposes training requirements upon telemarketers. Telemarketers are required to establish and maintain written procedures which address the requirements imposed upon them by the Act and this chapter and to train their employees in these rules and procedures.

The Division recognizes that telemarketers may incur costs in having to store the records required in N.J.A.C. 13:45D-3.10. The cost of complying with the recordkeeping and training requirements on telemarketers is discussed further in the Economic Impact statement above. The need for professional services, if any, and the cost of compliance, will vary among the telemarketers.

In order to ensure that the protections afforded by the Act and these proposed rules are available to all New Jersey residents, the provisions of these rules will be applied uniformly to all telemarketers without differentiation as to their size with the exception of the registration fee.

Smart Growth Impact

The proposed new rules will not have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Full text of the proposed new rules follows:

CHAPTER 45D
TELEMARKETING: DO NOT CALL

SUBCHAPTER 1. GENERAL PROVISIONS

<< NJ ADC 13:45D-1.1 >>

13:45D-1.1 Purpose

The rules in this chapter implement the provisions of the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. as amended by P.L. 2003, c.76 (N.J.S.A. 56:8- 119 et seq.) by providing procedures for the regulation of telemarketers and establishing standards to facilitate enforcement of the requirements of the Act. The rules establish the Division's no telemarketing call list by recognizing the telephone numbers of New Jersey customers on the National Do Not Call Registry established by the Federal Trade Commission or any other successive telemarketing registry created by the Federal government or any telemarketing registry established by the Division as the Division's no telemarketing call list.

<< NJ ADC 13:45D-1.2 >>

13:45D-1.2 Scope

These rules apply to telemarketers who make residential telemarketing sales calls to New Jersey customers and provide those who do not wish to receive unsolicited telemarketing sales calls a procedure to limit or eliminate such calls.

<< NJ ADC 13:45D-1.3 >>

13:45D-1.3 Definitions

The following words and terms, as used in this chapter, shall have the following meanings, unless their context clearly indicates otherwise:

"Act" means the Telemarketing Do Not Call law, N.J.S.A. 56:8-119 et seq.

"Applicant" means the entity which will be making telemarketing sales calls and each officer, director, principal and owner of the entity.

"Commercial mobile service" means a telephone that operates without a physical, wireline connection to the provider's equipment. The term includes, without limitation, cellular and wireless telephones.

"Continuing services" means the performance of work, the provision of medical care or other professional services or the affording of access to a utility, typically provided to an established customer on a recurring basis.

"Customer" means an individual who is a resident of New Jersey and a prospective recipient of a telemarketing sales call to a New Jersey telephone number.

"Director" means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.

"Established customer" means a customer for whom a seller has previously provided continuing services where the relationship has not been affirmatively or constructively terminated.

"Existing customer" means:

1. A person who is obligated to make payments to a seller on merchandise purchased; or

2. A person who has entered into a written contract with a seller where there is an obligation to perform, either by the customer, seller, or both.

"Isolated call" means one unsolicited telemarketing sales call made to a single customer in a 12-month period.

"Merchandise" means any object, ware, good, commodity, service or anything offered, directly or indirectly, to the public for sale, including an extension of credit.

"No telemarketing call list" means the telephone numbers of New Jersey customers who have registered for the National Do Not Call Registry created and maintained by the Federal Trade Commission pursuant to the Telemarketing Sales Rule (16 CFR 310) or any other successive telemarketing registry created by the Federal government or any telemarketing registry established by the State.

"Plan, program or campaign" means any coordinated telemarketing solicitation.

"Seller" means any person who, in connection with a telemarketing transaction, provides or offers to provide merchandise to the customer in exchange for consideration.

"Telemarketer" means any entity who makes residential telemarketing sales calls to a customer when the customer is in New Jersey, whether the entity is an individual proprietor, corporation, partnership, limited liability corporation or any other form of business organization, or if not formally organized, any person who directly controls or supervises the making of residential telemarketing sales calls whether on behalf of itself or others.

"Telemarketing" means any plan, program or campaign which is conducted by telephone to encourage the purchase or rental of, or investment in, merchandise, but does not include the solicitation of sales through media other than a telephone call.

"Telemarketing sales call" means a telephone call made by a telemarketer to a customer as part of a plan, program or campaign to encourage the purchase or rental of, or investment in, merchandise, except for continuing services. A telephone call made to an existing customer for the sole purpose of collecting on accounts or following up on contractual obligations shall not be deemed a telemarketing sales call.

"Unsolicited telemarketing sales call" means any telemarketing sales call other than a call made:

1. In response to an express written request of the customer called; or

2. To an existing customer.

<< NJ ADC 13:45D-1.4 >>

13:45D-1.4 Fees; no telemarketing call list

(a) The Division shall charge the following telemarketer registration fees:

1. One to five telephone numbers in use for telemarketing sales calls .............................................................. $150.00;

2. Six to 15 telephone numbers in use for telemarketing sales calls .. $500.00;

3. Sixteen and more telephone numbers in use for telemarketing sales calls ......................................................... $2,000.

(b) If the Division does not use the Federal Do Not Call Registry and establishes its own no telemarketing call list, the list shall be distributed to registered telemarketers quarterly as part of their registration fee.

SUBCHAPTER 2. BIDDER QUALIFICATIONS; NO TELEMARKETING CALL LIST

<< NJ ADC 13:45D-2.2 >>

13:45D-2.1 (Reserved)

13:45D-2.2 No telemarketing call list

The New Jersey no telemarketing call list is that list which contains the telephone numbers of New Jersey customers who are on the do-not-call registry created, maintained and made available by the Federal government or any telemarketing registry established by the State.

SUBCHAPTER 3. TELEMARKETER REGISTRATION

<< NJ ADC 13:45D-3.1 >>

13:45D-3.1 Requirement for a telemarketer to register

A telemarketer shall not engage in telemarketing to a customer unless the telemarketer is registered with the Division pursuant to the requirements of this chapter.

<< NJ ADC 13:45D-3.2 >>

13:45D-3.2 Application

(a) Each telemarketer shall annually register with the Division by submitting the following, on forms provided by the Director:

1. The name and street address of each location at which telemarketing is to be conducted from and any fictitious or trade name to be used by the telemarketer;

2. The type of business organization;

3. The name and residence and business street address of each officer, director, and principal;

4. The name, residence and business street address, and business telephone number of each person with an ownership interest of 10 percent or more in the telemarketing business and the percentage of ownership held;

5. The name, residence and business address, and business telephone number of each person who is a managing agent of the telemarketing business; or, if the managing agent is a corporation, association or other company, its name, street address and telephone number and the names and addresses of its officers and directors;

6. The telephone number or numbers that the telemarketer will be using to make telemarketing sales calls and the name of its telephone service provider;

7. Whether the entity, each officer, director, principal or owner of a telemarketing business has been adjudged liable in an administrative or civil action involving theft, fraud or deceptive business practices. For the purposes of this paragraph, a judgment of liability in an administrative or civil action shall include, but not be limited to, any finding or admission that the entity, officer, director, principal or owner of a telemarketing business engaged in an unlawful practice or practices related to fraud, deceptive trade practices, relating to the license to do business or practice an occupation or trade regardless of whether that finding was made in the context of an injunction, a proceeding resulting in the denial, suspension or revocation of an organization's registration, consented to in an assurance of voluntary compliance or any similar order or legal agreement with any State or Federal agency;

8. The name and address of an agent in the State of New Jersey for service of process; and

9. The name and address of any seller(s) with whom or on whose behalf the telemarketer has contracted to make any telemarketing calls.

<< NJ ADC 13:45D-3.3 >>

13:45D-3.3 Disclosure statement

(a) Each applicant shall file a disclosure statement with the Director stating whether the applicant has been convicted of any violations of the following provisions of the "New Jersey Code of Criminal Justice," Title 2C of the New Jersey Statutes, or the equivalent under the laws of any other jurisdiction:

1. Any crime of the first degree;

2. Any crime which is a second or third degree crime and is a violation of Chapter 20 or 21 of Title 2C of the New Jersey Statutes; or

3. Any other crime which is a violation of N.J.S.A. 2C:5-1 and 2C:5-2 (conspiracy), N.J.S.A. 2C:12-3 (terroristic threats), N.J.S.A. 2C:15-1 (robbery), N.J.S.A. 2C:18-2 (burglary), N.J.S.A. 2C:20-4 (theft by deception), N.J.S.A. 2C:20-5 (theft by extortion), N.J.S.A. 2C:20-7 (receiving stolen property), N.J.S.A. 2C:20-9 (theft by failure to make required disposition of property received), N.J.S.A. 2C:21-1 (forgery and other related offenses), N.J.S.A. 2C:21-2 (criminal simulation), N.J.S.A. 2C:21-2.1 (fraud relating to driver's license or other document issued by governmental agency to verify identity or age; simulation), N.J.S.A. 2C:21-2.3 (fraud relating to motor vehicle insurance identification card; production or sale), N.J.S.A. 2C:21-3 (frauds relating to public records and recordable instruments), N.J.S.A. 2C:21-4 (falsifying or tampering with records), N.J.S.A. 2C:21-5 (bad checks), N.J.S.A. 2C:21-6 (fraud relating to credit cards), N.J.S.A. 2C:21-7 (deceptive business practices), N.J.S.A. 2C:21-9 (misconduct by corporate official), N.J.S.A. 2C:21-10 (commercial bribery and breach of duty to act disinterestedly), N.J.S.A. 2C:21-11 (rigging publicly exhibited contest), N.J.S.A. 2C:21-12 (defrauding secured creditors), N.J.S.A. 2C:21-13 (fraud in insolvency), N.J.S.A. 2C:21-14 (receiving deposits in a failing financial institution), N.J.S.A. 2C:21-15 (misapplication of entrusted property and property of government of financial institution), N.J.S.A. 2C:21-16 (securing execution of documents by deception), N.J.S.A. 2C:21-17 (impersonation; theft of identity), N.J.S.A. 2C:21-19 (wrongful credit practices and related offenses), N.J.S.A. 2C:21-25 (money laundering and illegal investment), N.J.S.A. 2C:27-2 (bribery in official and political matters), N.J.S.A. 2C:27-3 (threats and other improper influence in official and political matters), N.J.S.A. 2C:27-4 (compensation for past official action), N.J.S.A. 2C:27-5 (retaliation for past official action), N.J.S.A. 2C:27-6 (gifts to public servants), N.J.S.A. 2C:27-9 (public servant transacting business with certain persons), N.J.S.A. 2C:28-1 (perjury), N.J.S.A. 2C:28-2 (false swearing), N.J.S.A. 2C:28-3 (unsworn falsification to authorities), N.J.S.A. 2C:28-4 (false reports to law enforcement officials), N.J.S.A. 2C:28-5 (tampering with witnesses and informants; retaliation against them), N.J.S.A. 2C:28-6 (tampering with or fabricating physical evidence), N.J.S.A. 2C:28-7 (tampering with public records or information), N.J.S.A. 2C:28-8 (impersonating a public servant or law enforcement officer), N.J.S.A. 2C:30-2 (official misconduct), or N.J.S.A. 2C:30-3 (speculating or wagering on official action or information).

(b) The disclosure statement required to be filed pursuant to this section may be used by the Director as grounds for denying, suspending or revoking registration. An applicant whose registration is denied or a telemarketer whose registration is suspended or revoked pursuant to this section shall be afforded an opportunity to be heard pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1, upon written request to the Director within 30 days of the notice of denial, suspension or revocation. In any matter in which the provisions of the Rehabilitated Convicted Offenders Act, N.J.S.A. 2A:168A-1 et seq., apply, the Director shall comply with the requirements of that Act.

<< NJ ADC 13:45D-3.4 >>

13:45D-3.4 Duty to update information

Whenever any information set forth in any registration application or disclosure statement has changed, the telemarketer shall file with the Director within 30 calendar days a notice in writing of such change.

<< NJ ADC 13:45D-3.5 >>

13:45D-3.5 Registration fee

A telemarketer shall submit with its annual registration application the fee specified in N.J.A.C. 13:45D-1.4(a).

<< NJ ADC 13:45D-3.6 >>

13:45D-3.6 Requirement to cooperate

A telemarketer applicant seeking to register with the Division shall have the continuing duty to provide any assistance or information, and to produce any records requested by the Director, and to cooperate in any inquiry, investigation or hearing conducted by the Director.

<< NJ ADC 13:45D-3.7 >>

13:45D-3.7 Refusal to issue, suspension or revocation of registration; hearing; other sanctions

(a) The Director may refuse to issue or renew, or suspend or revoke any registration issued by the Division for:

1. Failure to comply with, or for a violation of, N.J.S.A. 56:8-119 et seq. or any provision of this chapter; or

2. Any entity, officer, director, principal or owner of a telemarketing business having been adjudged liable in an administrative or civil action involving theft, fraud or deceptive business practices. For the purposes of this paragraph, a judgment of liability in an administrative or civil action shall include, but not be limited to, any finding or admission that the entity, officer, director, principal or owner engaged in an unlawful practice or practices related to fraud, deceptive trade practices, relating to the license to do business or practice an occupation or trade regardless of whether that finding was made in the context of an injunction, a proceeding resulting in the denial, suspension or revocation of an organization's registration, consented to in an assurance of voluntary compliance or any similar order or legal agreement with any State or Federal agency.

(b) Prior to refusing to issue or renew or suspending or revoking a telemarketing registration or assessing a penalty, the Director shall notify the applicant or registrant and provide an opportunity to be heard.

(c) The Director may, in lieu of revoking a registration, suspend the registration for a reasonable period of time dependent upon the seriousness of the violation, or assess a penalty in lieu of suspension, or both.

(d) Notwithstanding the revocation of a registration, the Director may issue a new registration upon submission of a new application and compliance with this chapter.

<< NJ ADC 13:45D-3.8 >>

13:45D-3.8 Registration number property of State

Each registration number issued by the Director to a telemarketer remains the property of the State of New Jersey. If the Director suspends, fails to renew, or revokes a registration, the telemarketer shall immediately return the registration number to the Director.

<< NJ ADC 13:45D-3.9 >>

13:45D-3.9 Telemarketer specific no telemarketing call list

(a) Each telemarketer shall maintain a list of the names and telephone numbers of existing customers who have requested not to receive telemarketing sales calls from that telemarketer which notes the date the customer made the request.

(b) A telemarketer that receives a request from an existing customer not to receive telemarketing sales calls shall remove the customer from its calling list and take other necessary affirmative steps to cease telemarketing sales calls to the customer within 30 days of the customer's request.

(c) A telemarketer shall maintain a list of a specific seller's existing customers who have requested not to receive calls from the seller and provide this list to the seller at least once every quarter.

(d) Sellers shall maintain a list of names and telephone numbers of customers who have requested not to receive telemarketing sales calls. A seller that receives, either directly from the customer or indirectly from a telemarketer or other source, a request from an existing customer not to receive telemarketing sales calls from that seller, shall remove the customer from its calling list and take other necessary affirmative steps to cease telemarketing sales calls to the customer by or on behalf of the seller within 30 days of the customer's request.

(e) A seller who contracts with a telemarketer to make telemarketing sales calls on its behalf shall provide the telemarketer with the list of existing customers who have requested not to receive telemarketing sales calls from the seller.

<< NJ ADC 13:45D-3.10 >>

13:45D-3.10 Recordkeeping requirements

(a) Each registered telemarketer shall maintain the following information:

1. The no telemarketing call list;

2. Documentation attesting to the date of receipt of the no telemarketing call list;

3. Sales scripts and written materials used for telemarketing purposes;

4. Name, any fictitious name used, last known home address and telephone number, and job title of all current and former individuals making telemarketing sales calls on behalf of the applicant;

5. All phone records associated with the telephone lines used for telemarketing;

6. Policies and procedures manuals relating to training and compliance with the Act and rules;

7. Records and evidence of employee training in the requirements of telemarketing regulation;

8. If telemarketing sales calls are recorded, the tape recordings of the telemarketing sales calls;

9. A log which includes the phone number, date, and time of each and every telemarketing sales call;

10. Requests to be placed on the telemarketer specific no telemarketing call list; and

11. The telemarketer specific no telemarketing call list.

(b) A seller that uses a registered telemarketer to make telemarketer sales calls and does not do its own telemarketing shall maintain the following information:

1. A customer's express written permission to allow telemarketing sales calls;

2. The list maintained by the seller of customers who have requested not to receive telemarketing sales calls from the seller;

3. Requests from customers who have asked not to receive telemarketing sales calls from the seller; and

4. Evidence that a customer is an existing customer or that a continuing service is being provided to the customer.

(c) A seller that makes its own telemarketing sales calls shall comply with both (a) and (b) above.

(d) The information and records required by (a) and (b) above shall be retained by the registered telemarketer or seller for a period of at least three years and shall be provided on request in a readily available format for inspection by the Director or the Director's authorized representative.

<< NJ ADC 13:45D-3.11 >>

13:45D-3.11 Training

(a) A telemarketer shall:

1. Establish and implement written procedures to comply with the requirements of the Act and this chapter; and

2. Train employees in telemarketing rules and procedures.

SUBCHAPTER 4. PROHIBITED ACTIVITIES; PERMITTED CALLS; PENALTIES

<< NJ ADC 13:45D-4.1 >>

13:45D-4.1 Prohibited activities

(a) No telemarketer shall make or cause to be made any unsolicited telemarketing sales calls to a customer:

1. Within three months of the date the customer's telephone number first appears on the no telemarketing call list; and

2. Between the hours of 9:00 P.M. and 8:00 A.M., local time of the customer.

(b) No telemarketer shall make or cause to be made any telemarketing sales calls to a customer:

1. Using a blocking device or a service which intentionally blocks the customer's use of a caller identification service or device; or

2. Whose telephone number has been identified as belonging to a commercial mobile service device, except that a telemarketer that is a commercial mobile services company may call its customer using its commercial mobile services if its customer will not incur telecommunication charges or a usage allocation deduction as a result of such call and the call is directly related to the commercial mobile services of the commercial mobile services company, unless the customer has stated to the commercial mobile services company that the customer no longer desires to receive these calls.

(c) No telemarketer shall make or cause to be made any telemarketing sales calls to an existing customer on behalf of:

1. A seller's affiliates; or

2. A seller whose sole obligation to the customer is the extension of credit;

i. Eighteen months after the date of the customer's last credit transaction;

ii. Upon satisfaction of the credit obligation, whichever is later; or

iii. Upon cancellation or termination of the agreement to extend credit and satisfaction of the credit obligation.

<< NJ ADC 13:45D-4.2 >>

13:45D-4.2 Exempt telemarketing sales calls

(a) Telemarketers may make the following telemarketing sales calls even if the customer is on the no telemarketing call list unless the customer has requested not to receive telemarketing sales calls under N.J.A.C. 13:45D-3.9:

1. Calls made to an existing customer; or

2. Calls made to an existing customer to whom a seller's sole obligation is the extension of credit which are made within 18 months of the date of the customer's last credit transaction or until the satisfaction of the credit obligation, whichever is later.

(b) Telemarketers may make telemarketing sales calls to customer numbers on the no telemarketing call list with the express agreement of the customer. Any requests for a customer's permission to make a telemarketing sales call shall be made in a clear and conspicuous manner in which the customer provides affirmative consent. A pre-checked box or other form of consent that has been completed by any person other than the customer shall not be deemed to be affirmative consent. The telemarketer shall first obtain the customer's express agreement in writing which includes the number to which telemarketing sales calls may be made and the customer's signature. If this agreement is reached online, the signature of the customer may be an electronic signature.

<< NJ ADC 13:45D-4.3 >>

13:45D-4.3 Call requirements

(a) All telemarketers making any telemarketing sales call to a New Jersey customer shall, within the first 30 seconds of such call, disclose all of the following information:

1. The name of the person making the call;

2. The name of the telemarketing entity making the call;

3. The name of the person or entity on whose behalf the call is being made; and

4. The purpose of the call.

<< NJ ADC 13:45D-4.4 >>

13:45D-4.4 Continuing services

A telemarketer may call an established customer on the no telemarketing call list or telemarketer specific no call list provided that the call is limited to the provision of continuing services and does not relate to expanded services, upgrades, products or other services unless directly related to the particular service or services previously provided.

<< NJ ADC 13:45D-4.5 >>

13:45D-4.5 Defenses to liability

(a) A registered telemarketer shall not be held liable for violating the Act or this chapter if the telemarketer can demonstrate that:

1. The telemarketer has obtained and put into use a copy of the no telemarketing call list which is no older than three months at the time the telemarketing call in question was made and the telemarketer has established and implemented written policies and procedures related to the requirements of the Act and these rules;

2. The telemarketer has trained all personnel in making telemarketing sales calls and the requirements of the Act and these rules;

3. The telemarketer maintains records which demonstrate compliance with (a)1 and 2 above and the Act; and

4. Any unsolicited telemarketing sales call made to a customer on the no telemarketing call list is an isolated call made no more than one time in a 12-month period.

<< NJ ADC 13:45D-4.6 >>

13:45D-4.6 Penalties

Any violation of the Act or this chapter shall be subject to the penalty provisions of N.J.S.A. 56:8-13 and 56:8-14.3

SUBCHAPTER 5. CUSTOMER REGISTRATION FOR NO TELEMARKETING CALL LIST

<< NJ ADC 13:45D-5.1 >>

13:45D-5.1 Customer registration

(a) A customer who wishes to be placed on the no telemarketing call list shall register by:

1. Calling the Federal toll-free registration number, 1-888-382-1222 (TTY 1- 866-290-4236) from the telephone number the customer wishes to add to the no telemarketing call list;

2. Registering on-line at the National Do Not Call Registry website at http://www.donotcall.gov/;

3. Registering on-line by using the Division website which link to the National Do Not Call Registry, www.njnocall.org or www.njnocall.net; or

4. Calling the Division's toll-free number, 1-888 NJNOCALL.

<< NJ ADC 13:45D-5.2 >>

13:45D-5.2 Removal from list

A customer may be removed from the no telemarketing call list by calling the National Do Not Call Registry at 1-888-382-1222 (TTY 1-866-290-4236) or the Division at 1-888 NJNOCALL. In order to be removed from the list the customer must call from the telephone number that he or she wishes to be removed from the no telemarketing call list.

 

  

  

  

  

  

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