BILL ANALYSIS
AB 2721
Page 1
ASSEMBLY THIRD READING
Ab 2721 (Wesson)
As Amended May 22, 2000
Majority vote
UTILITIES & COMMERCE 9-2 CONSUMER PROTECTION 6-0
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|Ayes:|Wright, Pescetti, |Ayes:|Davis, Correa, Lempert, |
| |Calderon, Cardenas, | |Machado, Maddox, Wesson |
| |Maddox, Mazzoni, Papan, | | |
| |Reyes, Wesson | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Campbell, Frusetta | | |
| | | | |
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APPROPRIATIONS 14-6
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|Ayes:|Migden, Alquist, Aroner, | | |
| |Cedillo, Corbett, Davis, | | |
| |Kuehl, Papan, Romero, | | |
| |Shelley, Thomson, Wesson, | | |
| |Wiggins, Wright | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Campbell, Ackerman, | | |
| |Ashburn, Brewer, Runner, | | |
| |Zettel | | |
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SUMMARY : Prohibits leaving a pre-recorded message without
receiving authorization from a live person, except in specified
situations. Specifically, this bill :
) Clarifies the time of use limitations relating to public
utilities to include their affiliates so long as the use is
related to the ongoing operation of facilities or services.
2)Clarifies that certain delineated situations are exempt from
the requirement that an automatic dialing announcement message
be preceded by an unrecorded natural voice message and add
fraud protection as one of those situations.
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3)Prohibits a pre-recorded message from being left on an
answering machine, voicemail, or other message-recording
device.
4)Prohibits the use of automatic calling equipment to make
telephone connections where no person or pre-recorded message
is available at the time contact is made with the person
called.
5)Clarifies that the exemption relating to use of automatic
dialing-announcing devices (ADADs) to contact persons having
an established business relationship does not include a
message pertaining to a new commercial transaction that is
unrelated to any product or service currently within the scope
of the established relationship.
6)Establishes as an additional exemption from the provisions of
this bill any calls that are made for noncommercial purposes.
EXISTING LAW :
1)Authorizes the California Public Utilities Commission (CPUC)
to control and regulate the use of ADADs and specifies the
hours during which the devices may not be operated.
2)Provides for exemptions from regulation and time of use
limitations in various situations, including having an
established relationship with the person using the ADAD.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, potential absorbable costs, offset by fine
revenue, to CPUC and/or the Attorney General (AG) for
enforcement.
COMMENTS : ADADs are prohibited for use in California unless a
live operator first identifies the calling party and obtains the
called party's consent to listen to the pre-recorded message.
Similar provisions are contained in both the California Public
Utilities Code (PU Code) which applies to all ADAD users and the
Civil Code that applies to commercial users. CPUC can enforce
its provisions with fines and disconnection of telephone
service. The AG is authorized to enforce fines and citizens
injured by violations of the civil statute may file suit for
damages.
AB 2721
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The use of ADADs without the added complement of the live person
announcing the recording is exempted for specific purposes
including parties with an existing relationship, calls from
schools, nonprofit organizations, utilities and public safety
officials. Additional exemptions are provided for calls made to
collect a debt, or any calls generated at the request of the
recipient. This bill expands those exemptions to include calls
related to fraud protection. Representatives from the finance
industry indicate that in an effort to address potential fraud
quickly ADADs are used to alert the customer as expeditiously as
possible. The exemption relating to calls for debt collection
and fraud protection currently only exist in the Civil Code.
This bill places similar provisions placed in the PU Code.
Additional clarification is also provided to allow affiliates of
publicly or privately owned utilities to make calls without a
live person. In a deregulated utility environment, for
example, installation is provided by the regulated telephone
company. Voice mail service, however, is provided by an
affiliate company. The proposed additional exemption allows use
of an ADAD by an affiliate company to alert customers of the
regulated public utility, of systems outages or other problems
with a customer's utility service. This bill also includes an
additional exemption relating to calls that are placed for
noncommercial purposes.
The author also clarifies an exemption for callers using ADADs
to contact persons with whom they have an existing business
relationship. This general exemption has resulted in companies
using an existing relationship to pitch additional products and
services that are not in furtherance of the existing
relationship via recorded messages without first receiving
consumer consent. The author has added clarifying language to
ensure that such calls are in furtherance of the existing
business relationship and not pertaining to a new commercial
transaction or unrelated products or services.
The author also seeks to address a growing problem in the
telemarketing field relating to the use of predictive dialers.
Predictive dialing is a form of automated dialing where a
computer dials phone numbers from a database while telemarketers
converse with potential customers. Predictive dialers use a
computer algorithm to establish a dialing rate based upon the
estimated time it takes to complete a call and the estimated
AB 2721
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percentage of busy signals, wrong numbers, answering machines
and other factors. Because predictive dialers dial more numbers
than telemarketers actually speak with in order to reduce
telemarketer down time, sometimes the connection is made and the
telemarketer or the pre-recorded message is not yet available.
Thus, when an individual answers the telephone, there is no one
on the other end.
Even some of the most sophisticated systems which "meet the most
stringent codes of dialing practices" have abandoned call rates
of 5% and call delay of up to five seconds. The author reports
that one predictive dialer may dial up to 1,600 telephone
numbers per hour resulting in up to 80 abandoned calls per hour.
This bill requires that after July 1, 2001, any automatic
equipment that incorporates a storage capability of telephone
numbers to be called may make telephone connections where no
person is available to contact the person called. The rate for
abandoned calls, predictive hang ups and call delays in
California after July 1, 2001 will be 0% rather than the current
industry standard of 5%.
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083
FN: 0004701