WASHINGTON -- Securities firms are skirting a telemarketing law, according to a key member of Congress.
Rep. Edward J. Markey, chairman of the House Energy and Commerce subcommittee on telecommunications and finance, gave the securities industry a grade of "C/C-plus" for compliance with the Telephone Consumer Protection Act of 1991, which is designed to curb unwanted telephone solicitations.
Banks should be concerned with the study because they do a lot of direct marketing by telephone and the law clearly covers them, said James Rockett, a lawyer with Ropers, Majeski, Kohn, Bently, Wagner & Kane in San Francisco.
"The securities industry has actually been more sophisticated in this area," Mr. Rockett said. "If they aren't doing it right, I wouldn't think banks are either."
The law requires firms to keep lists of people who don't want to be called, to have a written policy for maintaining those lists, and to train personnel to comply. In addition, telemarketers may make calls only only between 8 a.m. and 9 p.m.
In a survey of the top 50 retail broker-dealers, Rep. Markey found that many firms fail to train employees to keep the "do not call" lists. When asked to submit training materials, a majority of those surveyed either didn't have anything to offer or sent inadequate materials.
The study also found that many firms use nonregistered telemarketers who are not authorized to place people on the list even if requested.
The way to solve this problem, said Rep. Markey, is to create a national data base of people who don't want to be solicited. The list would be compiled by the Federal Communications Commission and then turned over to the private sector, he said.
"The privacy rights of consumers have yet to be recognized by high-tech peddlers," said the Massachusetts Democrat.
The report also suggested that securities firms should think of this issue as a way to improve customer relations. Unfortunately, the study said, "many citizens feel that the presence of a telephone in their homes leaves them victims to any marketer dialing their number to make a solicitation."
The survey found that a household has a one-in-five chance of being cold-called by a broker at least once a year.
About 75,000 stockbrokers make 1.5 million telemarketing calls a year. That's an average of 80 calls a day for each broker.
