Justices give states OK to curb computerized phone soliciting

March 30, 1993|By Lyle Denniston and Kim Clark | Lyle Denniston and Kim Clark,Staff Writers

WASHINGTON -- High-tech telemarketing -- sales pitches by phone that can be done entirely by a machine with a computerized voice -- got a temporary disconnect as the Supreme Court made a silent bow to consumer privacy yesterday.

The court, in refusing to hear a major test case, gave Maryland and 41 other states temporary permission to go on enforcing laws that ban or strictly curb automated commercial messages aimed at private telephones. In the meantime, constitutional challenges will proceed in lower courts.

Consumer activists hailed the court's action. "We think it is great," said Mark Cooper, research director for the Washington-based Consumer Federation of America. "If you ask people what is the single largest source of annoyance with their telephones, sales calls comes in first by a mile."

Yesterday's case did not deal with other kinds of telemarketing, including calls made by a person making a sales pitch, because states have aimed their restrictions at automated calls, to which the public objects. The only kind of telemarketing at issue was the use of a computer to dial numbers at random and deliver a commercial with a recorded, artificial voice.

Anyone in Maryland who gets an unwanted computerized call may complain to the state Public Service Commission under a state law that is one of the toughest in the nation.

Under that law, it is a crime to aim an automated commercial message at a Maryland telephone customer who has not agreed to receive such calls. Telemarketers convicted under the law can be fined up to $1,000 for the first violation and up to $5,000 for each subsequent offense.

Over the past four years, the attorney general's Consumer Protection Division has received 31 complaints about automated telemarketers offering credit cards, pest control, sweepstakes and other prizes, tours and cruises, consumer loans, and home sales or repairs.

Other states' laws allow telemarketing using computerized messages if a live operator comes on the line first and gets permission. A law of that kind, now in effect in Minnesota, was the one the Supreme Court voted to leave intact yesterday.

In a brief order with no comment and apparently with no dissent, the court chose to bypass the first constitutional challenge to restrictions on automated calling used for peddling goods or services. As is usual when the court declines to hear a case, it offered no explanation.

The constitutional issue involved in such laws could return to the Supreme Court as other lawsuits arise.

The laws against computerized commercial calls generally are designed to protect the privacy of consumers at home, but the Minnesota case arose when state officials challenged a marketer of travel plans and credit cards who had a machine that repeatedly dialed the telephones of patients at their bedsides in a Minneapolis hospital.

The telemarketer, Larry J. Hall of St. Paul, challenged the constitutionality of the Minnesota law, arguing that it interferes with businesses' free speech rights. He also said that because it is so inexpensive, automated calling is the only way some small companies have to advertise.

Minnesota's law, passed in 1987, bars all automated commercial calls between 9 p.m. and 9 a.m. but does not forbid such calls during the day if the person called consents in advance or if the recorded message is preceded by a live operator asking for consent.

Many complaints about automated calling focus on the fact that the machine does not disconnect quickly, even if the person called hangs up. The Minnesota law requires a disconnect 10 seconds after the customer hangs up.

Maryland's law goes beyond Minnesota's. It bans automated commercial calls, including those offering gifts or prizes and those made to conduct polls related to commercial offers. It allows such calls only when the person called consents or has business ties to the caller.

The Maryland law requires a disconnect five seconds after the call is ended by either party.

Lucy Weisz, deputy chief of the Consumer Protection Division, said her agency often reacts to a complaint by first warning the telemarketer about the Maryland law. The division also has the authority to go after telemarketers under a separate anti-deception law if the calls are misleading.

Frank Fulton, spokesman for the state Public Service Commission, said consumers should take their complaints to the PSC first by calling (410) 333-6047.

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