Michigan bills to crack down on telemarketing appeared before the state Senate Finance, Insurance, and Consumer Protection Committee on Wednesday.
The bipartisan bill package would largely ban telemarketers from reaching out to people on the federal do-not-call-list without consent. The package would also limit the use of technology to automatically call or send texts to people on the list.
State Senator and package sponsor Mary Cavanagh (D-Redford) said there are exceptions for things like business subscription texts.
“Customers can say, ‘Yes, you can reach out to us.’ ‘Yes, we want to be a loyal customer.’ Just know that you need to get that preauthorization,” Cavanagh told reporters after Wednesday’s meeting.
Other parts of the bills would require telemarketers to identify themselves up front and set quiet hours for calls.
Kathy Fitzgerald is with the Michigan Attorney General’s office. She said the state’s current patchwork of telemarketing laws falls short. For example, she said the Home Solicitation Sales Act doesn’t cover scam calls or texts.
“The proposed act would address (the) present telemarketing landscape and ongoing barrage of unwanted robocalls and texts that confront Michigan residents in addition to laying out a stronger regulatory regime to govern telephone solicitations in Michigan,” Fitzgerald said during committee testimony.
Under the bills, violators of the act could face lawsuits from both affected parties and the state Attorney General’s office.
When lawmakers asked about how the bills would handle out-of-state and out-of-country telemarketers, Fitzgerald pointed to parts of the bills that would ban helping telephone solicitors break the law too. Depending on circumstances, that could apply to voice over IP, or voIP, providers.
“If we’re able to hold the VoIP provider liable, which we would be, then we can stop the calls from reaching us. We can’t stop them from being made but we can stop them from reaching Michigan phones by basically suing the voIP provider and having an injunction against them carrying the calls from the offshore offender,” Fitzgerald said.
Business groups, however, opposed the measure during committee testimony. Many brought up the federal Telephone Consumer Protection Act, which has spawned several lawsuits.
Former Federal Communications Commissioner Michael O’Rielly said the legislation would invite what he called “shakedown lawsuits.”
“The bills’ enforcement mechanism, a private rate of action with statutory damages of $1,500 per violation, is a blueprint for litigation abuse,” O’Rielly said.
He recommended the bills do more to tighten up definitions and narrow what would count as an automatic dialing system. The U.S. Supreme Court waded into the matter in 2021 with the Facebook, Inc. v. Duguid case.
Ecommerce Innovation Alliance President David Carter echoed those definition concerns. He said he worried that inconsistencies in how the bills would draw exemptions could lead to frivolous lawsuits.
“Each of these laws that gets adopted that differs from the federal standard and differs from a state-to-state standard creates an opportunity for litigation,” Carter said.
Meanwhile, O’Rielly also recommended adding stronger language to clarify that someone would need an intent to break the law to be responsible for breaking it.
Bill sponsors, however, maintain that a newer version of the legislation adopted in committee Wednesday addresses most of those concerns and has sufficient carveouts to protect businesses and groups’ free speech rights.
The current package, which remains in committee, is a follow-up to similar legislation from last term that never made it out of committee.
