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F I S C A L I M P A C T R E P O R T

SPONSOR:	Rawson		DATE TYPED:	01/31/03		HB
SHORT TITLE:		Unfair Trade Practices				SB	118
					ANALYST:		Martinez

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY03	FY04	FY03	FY04
			NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General

Public Regulation Commission

SUMMARY

Synopsis of Bill

Senate Bill 118 amends the Unfair Practices Act prohibiting seller-initiated telephone sales utilizing automatic dialing equipment that engages the telephone numbers of more than one person at a time and prohibits such equipment that requests credit card numbers prior to the potential customer communicating the desire to use a credit card to pay for a purchase.

Significant Issues

Telemarketing practices are currently regulated pursuant to the Unfair Practices Act (Sections 57-5A-1 to 57-5A-5 NMSA 1978), and Trade Practices and Regulations, specifically Section 57-12-22 NMSA 1978 which sets out procedures, times, required disclosures regarding telephone solicitation sales. The Attorney General is charged with the duty of enforcing Trade Practices and Regulations and is given statutory authority to bring actions, seek injunctions, negotiate settlements and restitution, and seek civil penalties.

The use of the telephone to market goods and services to the home and to other businesses is now pervasive due to the increased use of cost-effective telemarketing techniques. Unrestricted telemarketing, however, can be an intrusive invasion of privacy. Many consumers are outraged over the proliferation of intrusive and sometimes confusing calls to their homes from telemarketers.

The consumer protection policy implicated by this legislation provides how to balance an individuals’ privacy rights and commercial freedom of speech in a way that protects the privacy of individuals and permits legitimate telemarketing practices. While many consumers enjoy and benefit from unsolicited telemarketing contacts from legitimate telemarketers, many other consumers object to these contacts as an invasion of privacy and have expressed an intention to refuse to respond to such telemarketing contacts.

Legitimate telemarketers have no further legitimate interest in continuing to participate in unlawful trade practices and to invade the privacy of those consumers who have affirmatively expressed their objections to such contact. Moreover, legitimate telemarketers can make their telemarketing efforts even more cost-effective by avoiding calling those consumers who have affirmatively expressed an objection to any telemarketing contact.

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