HS HCS HB 1172, 1501, 1633, 1440, 1634, 1177 & 1430 --
TELECOMMUNICATIONS MERCHANDISING (Davis, 122)

This substitute establishes telemarketing regulations and a no
call database and regulates electronic mail (e-mail)
solicitation.  In its main provisions, the substitute:

(1)  Exempts state-regulated credit unions from current law
prohibiting certain unlawful merchandising practices.  Current
law exempts companies or institutions under the regulation of
the Department of Insurance or the Division of Finance;

(2)  Changes the words "goods or services" to the defined term
"merchandise" in a section of current law authorizing civil
action by persons suffering ascertainable loss of money or
property as a result of unlawful merchandising acts or practices;

(3)  Modifies the definition of the term "merchandise" to
exclude services, goods, or memberships given to a contributor
when an entity organized under Internal Revenue Service Code
501(c)(3) is engaged in fund-raising to support the charitable
purpose for which it was organized and to exclude securities as
currently defined in statute or financial or insurance contracts
or services;

(4)  Requires telemarketers to disclose certain information when
selling merchandise or promoting prizes, including the purpose
of the call, the name of the telemarketer and seller, and the
total cost of merchandise prior to payment;

(5)  Prohibits certain acts, including requesting a fee to
remove derogatory information from a person's credit record,
knowingly calling persons who have previously stated that they
do not want to receive telemarketing calls from that seller, and
misrepresenting material aspects about the merchandise being
offered for sale;

(6)  Prohibits abusive conduct such as the use of obscene
language, intimidation, and harassment;

(7)  Allows a consumer to give certain forms of written or oral
authorization for payment from his or her checking or savings
account;

(8)  Requires telemarketers to keep specified records for 24
months from the date the record is produced;

(9)  Makes violation of some of the telemarketing provisions a
class A misdemeanor and violation of others a class D felony.
Second and subsequent class D felony convictions will be class D
felonies punishable by the term of years and a fine of up to
$5,000 or a fine equal to triple the gain, with no limit on the
amount recoverable;

(10)  Allows consumers who have suffered a loss or harm due to
violations of the telemarketing provisions to recover actual and
punitive damages, attorney's fees, court costs, and other lawful
remedies;

(11)  Exempts the following from the telemarketing requirements:

(a)  telephone calls where the sale of goods or services is not
completed and payment is not required until after a face-to-face
sales presentation by the telemarketer;

(b)  telephone calls initiated by the consumer that are not the
result of any advertisement by a seller or telemarketer, are in
response to media advertisements other than direct mail or
telemarketing, and are in response to direct mail solicitations
and catalog mailings.  Also excluded are calls initiated by the
consumer when further solicitation of any item is stopped when
the consumer states that he or she does not wish further
solicitation; and

(c)  telephone calls or messages to persons who have given prior
express permission, to persons with whom the caller has an
established business relationship as defined in the substitute,
or by or on behalf of any entity over which either a state or
federal agency has regulatory authority with respect to
telemarketing practices, as long as the agency has promulgated
rules regulating telemarketing practices;

(12)  Requires the Attorney General to receive telemarketing
complaints and to forward complaints against entities regulated
by state or federal agencies with respect to telemarketing
practices to the respective agencies for investigation.  All
other complaints will be resolved by the Attorney General;

(13)  Establishes a statewide no call database for residential
subscribers operated by the Attorney General to be operational
by February 1, 2001;

(14)  Authorizes the Attorney General to make rules, including
specifying methods by which residential subscribers can give or
revoke notice to the Attorney General regarding their objections
to receiving telephone solicitations and methods by which
persons wanting to make telephone solicitations will obtain
access to the database, and establishing a fee not to exceed
$100 per year per person or entity for such access;

(15)  Requires the Attorney General to include the Missouri
database in any national database, if established as authorized
by federal law;

(16)  Prohibits making telephone solicitations to any
residential subscriber who has given notice to the Attorney
General that he or she objects to receiving telephone
solicitations;

(17)  Creates the Telemarketing Database Revolving Fund in the
state treasury to be used exclusively by the Attorney General to
promote, develop, and maintain a no call database;

(18)  Authorizes the Attorney General to initiate proceedings
for any knowing violation or threatened knowing violation of the
no call provisions;

(19)  Authorizes any residential subscriber listed in the
database who receives more than one telephone solicitation in
any 12-month period from the same person or entity in violation
of the no call provisions to bring an action to enjoin the
violation and to recover actual or monetary loss from the
violation or up to $5,000 in damages for each violation,
whichever is greater;

(20)  Provides a defense in any action or proceeding when the
defendant has with due care established and implemented
reasonable practices and procedures to effectively prevent such
violations;

(21)  Limits the time within which an action may be brought to 2
years after the violation occurred or after more than 2 years
after the termination of any proceeding or action by the state,
whichever is later;

(22)  Authorizes a Missouri court to exercise personal
jurisdiction over any nonresident as to an action related to a
violation;

(23)  Exempts communications:

(a)  To residential subscribers who have given prior express
invitation;

(b)  By any person or entity with whom the residential
subscriber has had a business contact within the past 60 days or
a current business or personal relationship; and

(c)  By or on behalf of any entity over which a state or federal
agency has regulatory authority with respect to business
practices and which maintains a no call list;

(24)  Prohibits transmitting unsolicited commercial e-mail
messages from a computer located in Missouri to an e-mail
address held by a Missouri resident and e-mailing advertising
material without a toll-free telephone number or valid sender--
operated e-mail address where the recipient can notify the
sender not to e-mail further unsolicited documents;

(25)  Makes a violation of the e-mail solicitation provisions an
unlawful merchandising practice under current merchandising
practices law a class D felony.  Damages to the recipient of
unsolicited e-mail in violation of these provisions are $500 or
actual damages, whichever is greater.  Damages to an interactive
computer service resulting from a violation are $1,000 or actual
damages, whichever is greater;

(26)  Authorizes interactive computer services to block the
transmission through their services of any commercial e-mail
that they reasonably believe is in violation of the provisions
and releases from liability any interactive computer service for
any action voluntarily taken in good faith to block such
transmissions; and

(27)  Requires the e-mail solicitation provisions to expire on
the date that federal law prohibits or otherwise regulates the
transmission of unsolicited commercial e-mail messages.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of less
than $100,000 in FY 2001, FY 2002, and FY 2003.  Estimated Net
Effect on Telemarketing Database Revolving Fund of $0 in FY
2001, FY 2002, and FY 2003.

HCS HB 1172, 1501, 1633, 1440, 1634, 1177 & 1430 --
TELECOMMUNICATIONS MERCHANDISING PRACTICES

SPONSOR:  Schilling (Davis, 122)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Consumer
Protection and Housing by a vote of 19 to 1.

This substitute establishes telemarketing regulations and a no
call database and regulates electronic mail (e-mail)
solicitation.  In its main provisions, the substitute:

(1)  Exempts state-regulated credit unions from current law
prohibiting certain unlawful merchandising practices.  Current
law exempts companies or institutions under the regulation of
the Department of Insurance or the Division of Finance;

(2)  Requires telemarketers to disclose certain information when
selling merchandise or promoting prizes, including the purpose
of the call, the name of the telemarketer and seller, and the
total cost of merchandise prior to payment;

(3)  Prohibits certain acts, including requesting a fee to
remove derogatory information from a person's credit record,
knowingly calling persons who have previously stated that they
do not want to receive telemarketing calls from that seller, and
misrepresenting material aspects about the merchandise being
offered for sale;

(4)  Prohibits abusive conduct such as the use of obscene
language, intimidation, and harassment;

(5)  Allows a consumer to give certain forms of written or oral
authorization for payment from his or her checking or savings
account;

(6)  Requires telemarketers to keep specified records for 24
months from the date the record is produced;

(7)  Makes violation of some of the telemarketing provisions a
class A misdemeanor and violation of others a class D felony.
Second and subsequent class D felony convictions will be class D
felonies punishable by the term of years and a fine of up to
$5,000 or a fine equal to triple the gain, with no limit on the
amount recoverable;

(8)  Allows consumers who have suffered a loss or harm due to
violations of the telemarketing provisions to recover actual and
punitive damages, attorney's fees, court costs, and other lawful
remedies;

(9)  Exempts the following from the telemarketing requirements:

(a)  telephone calls where the sale of goods or services is not
completed and payment is not required until after a face-to-face
sales presentation by the telemarketer;

(b)  telephone calls initiated by the consumer that are not the
result of any advertisement by a seller or telemarketer, are in
response to media advertisements other than direct mail or
telemarketing, and are in response to direct mail solicitations
and catalog mailings;

(c)  telephone calls or messages to persons who have given prior
express permission, persons with whom the caller has an
established business relationship as defined in the substitute,
or by or behalf of any entity over which either a state or
federal agency has regulatory authority with respect to
telemarketing practices, as long as the agency has promulgated
rules regulating telemarketing practices;

(10)  Requires the Attorney General to receive telemarketing
complaints and to forward complaints against entities regulated
by state or federal agencies with respect to telemarketing
practices to the respective agencies for investigation.  All
other complaints will be resolved by the Attorney General.

(11)  Establishes a statewide no call database for residential
subscribers operated by the Attorney General to be operational
by February 1, 2001;

(12)  Authorizes the Attorney General to make rules, including
specifying methods by which residential subscribers can give or
revoke notice to the Attorney General regarding their objections
to receiving telephone solicitations, methods by which persons
wanting to make telephone solicitations will obtain access to
the database, and establishing a fee not to exceed $100 per year
per person or entity for such access;

(13)  Requires the Attorney General to include the Missouri
database in any national database, if established as authorized
by federal law;

(14)  Prohibits making telephone solicitations to any
residential subscriber who has given notice to the Attorney
General that he or she objects to receiving telephone
solicitations;

(15)  Creates the Telemarketing Database Revolving Fund in the
state treasury to be used exclusively by the Attorney General to
promote, develop, and maintain a no call database;

(16)  Authorizes the Attorney General to initiate proceedings
for any knowing violation or threatened knowing violation of the
no call provisions;

(17)  Authorizes any residential subscriber listed in the
database who receives more than one telephone solicitation in
any 12-month period from the same person or entity in violation
of the no call provisions to bring an action to enjoin the
violation and to recover actual or monetary loss from the
violation or up to $5,000 in damages for each violation,
whichever is greater;

(18)  Provides a defense in any action or proceeding when the
defendant has with due care established and implemented
reasonable practices and procedures to effectively prevent such
violations;

(19)  Limits the time within which an action may be brought to 2
years after the violation occurred or after more than 2 years
after the termination of any proceeding or action by the state,
whichever is later;

(20)  Authorizes a Missouri court to exercise personal
jurisdiction over any nonresident as to an action related to a
violation;

(21)  Exempts communications:

(a)  To residential subscribers that have given prior express
invitation;

(b)  By any person or entity with whom the residential
subscriber has had a business contact within the past 60 days or
a current business or personal relationship; or

(c)  By or on behalf of any entity over which a state or federal
agency has regulatory authority with respect to business
practices and which maintains a no call list;

(22)  Prohibits transmitting unsolicited commercial e-mail
messages from a computer located in Missouri to an e-mail
address held by a Missouri resident and e-mailing advertising
material without a toll-free telephone number or valid sender--
operated e-mail address where the recipient can notify the
sender not to e-mail further unsolicited documents;

(23)  Makes a violation of the e-mail solicitation provisions an
unlawful merchandising practice under current merchandising
practices law, a class D felony.  Damages to the recipient of
unsolicited e-mail in violation of these provisions are $500 or
actual damages, whichever is greater.  Damages to an interactive
computer service resulting from a violation are $1,000 or actual
damages, whichever is greater;

(24)  Authorizes interactive computer services to block the
transmission through their services of any commercial e-mail
that they reasonably believe is in violation of the provisions
and releases from liability any interactive computer service for
any action voluntarily taken in good faith to block such
transmissions; and

(25)  Requires the e-mail solicitation provisions to expire on
the date that federal law prohibits or otherwise regulates the
transmission of unsolicited commercial e-mail messages.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of less
than $100,000 in FY 2001, FY 2002, and FY 2003.  Estimated Net
Effect on Telemarketing Database Revolving Fund of $0 in FY
2001, FY 2002, and FY 2003.

PROPONENTS:  Supporters say that while there are not a lot of
fraudulent telemarketers, they defraud people out of billions of
dollars each year.  They point out that the requirements in the
telemarketing provisions are modeled on current federal
regulations.  They also say that a statewide no call list would
prevent people from getting unwanted telephone solicitations and
noted that several other states have such no call lists.

Testifying for HB 1172 were Representative Davis (122); AARP;
Office of the Attorney General; and Direct Marketing Association.

Testifying for HB 1501 was Speaker Gaw.

Testifying for HB 1633 were Representative Kissell; and Office
of the Attorney General.

Testifying for HB 1440 were Representative Crump; and Direct
Marketing Association.

Testifying for HB 1634 was Representative Kissell.

Testifying for HB 1177 were Representative Alter; and Chris Jais.

Testifying for HB 1430 were Representative Schwab; and Office of
the Attorney General.

OPPONENTS:  Those who oppose the bill say that certain
industries are already regulated at the federal and state
levels, where licensing remedies are currently available for
doing fraudulent business and that federal regulations are in
place already.  They also say that the no call list is redundant
with current FCC requirements for telephone carriers to maintain
no call lists.

Testifying against HB 1172 were Securities Industry Association;
Missouri Securities Industry Association; Prudential; Missouri
Insurance Coalition; Sprint; Southwestern Bell; GTE; AllTel;
AT&T; MCI Worldcom; and Missouri Small Telephone Group.

Testifying against HB 1501 were Direct Marketing Association;
American Teleservices Association; Missouri Securities Industry
Association; Securities Industry Association; Sprint;
Southwestern Bell; GTE; AllTel; AT&T; MCI Worldcom; and Missouri
Small Telephone Group.

Testifying against HB 1633 were Direct Marketing Association;
Sprint; Southwestern Bell; GTE; AllTel; AT&T; MCI Worldcom; and
Missouri Small Telephone Group.

Testifying against HB 1440 were Securities Industry Association
and Missouri Securities Industry Association.

Testifying against HB 1634 were Direct Marketing Association;
Sprint; Southwestern Bell; GTE; AllTel; AT&T; MCI Worldcom; and
Missouri Small Telephone Group.

There was no opposition voiced to the committee against HB 1177
and HB 1430.

Donna Schlosser, Legislative Analyst

HB 1172 -- Telemarketing Practices

Co-Sponsors:  Davis (122), Selby, Relford

This bill establishes telemarketing regulations.  In its main
provisions, the bill:

(1)  Exempts state-regulated credit unions from current law
prohibiting certain unlawful merchandising practices.  Current
law exempts companies or institutions under the regulation of
the Department of Insurance or the Division of Finance;

(2)  Requires telemarketers to disclose certain information when
selling merchandise or promoting prizes, including the purpose
of the call, the name of the telemarketer and seller, and the
total cost of merchandise prior to payment;

(3)  Prohibits certain acts, including requesting a fee to
remove derogatory information from a person's credit record,
knowingly calling persons who have previously stated that they
do not want to receive telemarketing calls from that seller, and
misrepresenting material aspects about the merchandise being
offered for sale;

(4)  Prohibits abusive conduct such as the use of obscene
language, intimidation, and harassment;

(5)  Allows a consumer to give certain forms of written or oral
authorization for payment from his or her checking or savings
account;

(6)  Requires telemarketers to keep specified records for 24
months from the date the record is produced, such as verifiable
authorizations, brochures, and the names and addresses of
recipients of prizes with a value of $25 or more;

(7)  Makes violation of the bill's provisions a class D felony;

(8)  Allows consumers who have suffered a loss or harm due to
violations of the bill's provisions to recover actual and
punitive damages, attorney's fees, court costs, and other lawful
remedies; and

(9)  Exempts the following from the requirements of the bill:

(a)  telephone calls where the sale of goods or services is not
completed and payment is not required until after a face-to-face
sales presentation by the telemarketer;

(b)  telephone calls initiated by the customer that are not the
result of any advertisement by a seller or telemarketer, are in
response to media advertisements other than direct mail or
telemarketing, and are in response to direct mail solicitations
and catalog mailings; and

(c)  telephone calls or messages to persons who have given prior
express permission, persons with whom the caller has an
established business relationship as defined in the bill, or
calls made by a tax-exempt nonprofit organization.