Statement of Administration Policy: H.R. 3203 - Consumer Protection Telemarketing Act

(House)
(Swift (D) Washington)

The Administration strongly opposes House passage of H.R. 3203 in its current form. The Administration would have no objection to enactment of H.R. 3203 if it were amended to:

—   Delete or modify sections 4 and 5 of the bill to avoid violating the Appointments Clause of the Constitution. State attorneys general and private citizens are not officers of the United States appointed pursuant to the Appointments Clause. Therefore, they may not constitutionally enforce Federal law by bringing civil actions solely "to enforce compliance with [a] rule of the [Federal Trade] Commission" unless the rule has been enacted into State law.

— Eliminate the possibility that the United States would be bound by decisions in cases that it did not choose to institute. Sections 4(b) and 5(b) allow State attorneys general and private persons to institute cases without any prior consultation with or approval from the Federal Trade Commission (FTC) in certain cases.

—   Distinguish between "cold" calling by strangers and calling by a representative of a company with which the individual has an established business relationship. Rules designed for cold calling should not unreasonably limit the ability of long-distance phone companies, credit card companies, and similar concerns to market new services or products to existing customers.

—   Exclude securities sales from telemarketing regulation. The Securities and Exchange Commission already has statutory authority to regulate "cold" calling. For example, the Commission has issued rules regarding "cold" calling in penny stocks. Further regulation of securities telemarketing could interfere with the operation of the securities business and the capital markets. For example, customers might abuse FTC rules by rescinding recent trades, simply because the market had moved against them.