Fraudulent telemarketing needs regulation

Until just a couple of years ago, telemarketing was a major sales tool. Calling potential customers to solicit orders for goods ranging from aluminum siding to credit cards to magazine subscriptions proved to be an effective method of boosting sales. Most U.S. daily newspapers, including the Southeast Missourian, had busy telemarketing departments.

But the ability to effectively use the telephone to promote sales has slowly been eroded by regulation, most of which is the result of pressure from annoyed individuals who don't like having their dinners or their favorite television shows interrupted by a sales call.

At first, laws were passed allowing private telephone users to request that their phone number be placed on a no-call list maintained by each company engaged in telemarketing. Companies who were sloppy about maintaining this list were subject to penalties.

More recently, two other developments have lessened the impact of telemarketing. The first is the widespread use of caller-ID and privacy-manager options offered by phone companies for a monthly fee. With either of these services, it's easy to decide if you want to answer your ringing phone. The second development was the statewide no-call list maintained and enforced by the attorney general. Missouri has such a list, and Attorney General Jay Nixon has aggressively promoted this buffer between telemarketers and telephone customers.

Even these services, however, don't cut off every unwanted call. For example, politicians, companies that provide telephone services and any business with which you have a business relationship are exempt from the attorney general's no-call list in Missouri.

Another aspect of telemarketing currently faces a crucial U.S. Supreme Court decision: the fraudulent use of the phone to solicit funds for charities. A number of states would like to be able to prosecute those operations, which keep most of the money they raise and give only a small portion to the charities for which they are collecting, while telling unsuspecting donors untruths about the scheme.

But courts have generally protected this practice as a free-speech issue. Indeed, many charities are completely satisfied with such an arrangement. They are happy with getting only 10 percent or 15 percent of what a professional telemarketing company can raise in contributions.

But what officials in some states, including Illinois, worry about is the deception in getting folks to send money to charities, thinking most or all of what they are contributing will actually be used to help the needy, the sick or the unfortunate.

Officials say they should be able to prosecute telemarketers who rely on outright fraud to get charitable donations. The issue here isn't the exorbitant fees telemarketers charge their charitable clients. It's the outright lies they tell prospective donors on the other end of the line. The Supreme Court would be justified in putting legal brakes on such deception.