Ministry of Economics and Industry Seeks to Impose Restrictions on Telemarketing

The Ministry of Economics and Industry recently published a draft bill for an amendment to the Consumer Protection Law. This draft bill proposes placing restrictions on telemarketing.

The amendment to the Consumer Protection Law was developed based on two basic assumptions: (i) the majority of the public considers these telemarketing calls a nuisance; and (ii) the victims of exploitation by telemarketing are members of weak populations, such as the elderly, new immigrants, and people with disabilities. The Consumer Protection Law currently provides extra protection to this population, and allows them to cancel transactions they handled through remote marketing (internet, telephone, etc.) within a time frame significantly longer than the norm.

However, the current protections regarding telemarketing are inadequate. For instance, consumers are required to provide proof of the content of the telemarketing conversation in order to receive consumer protection, but, in most cases, consumers cannot obtain such proof. Furthermore, the current provision of the law enabling consumers to cancel telemarketing transactions does not resolve the problems at the pre-transaction stage. These include the use of misleading marketing tactics, marketing pressure, and the harassment of consumers. 

The draft bill proposes that the Consumer Protection and Fair Trade Authority enable consumers to ask for their phone numbers to be included in a “Don’t Contact Me” database to be established and maintained by the Authority. This is to ensure such consumers do not receive telemarketing calls. Any business that desires to conduct a telemarketing campaign would then be required to apply to the Consumer Protection Authority for the list of telephone numbers included in the “Don’t Contact Me” database. Essentially, the draft bill seeks to supplement the protection in the existing law, since there is also a need to protect consumers from aggressive marketing practices and unfair marketing tactics.

Additionally, the draft bill proposes enabling the Minister of Economics and Industry to define the instances, circumstances, and types of transactions that will be excluded from application of the arrangement. Under examination within this context is the need to exclude, inter alia, telephone calls pertaining to a continuous transaction between a business and its customers, such as offers to change the terms of the transaction.

The draft bill also proposes enabling the Minister to issue “administrative orders” against businesses that violate provisions of the proposed arrangement, as well as to define pecuniary sanctions in respect of telemarketing activities that are conducted in violation of the provisions of the arrangement or in respect of a violation of an “administrative order” issued by the Minister in this regard.

We mention in this context that the Communications Law (Telecommunications and Broadcasting) already prohibits the transmission of advertisements via email, text message, automatic dialing system, or facsimile, if the addressee has not given his express prior consent (opt in). On the other hand, according to the telemarketing arrangement proposed in the new draft bill, telemarketing is permitted unless a consumer objects to receiving such calls by actively registering in the database (opt out). We also note the Consumer Protection Authority published a proposal in June 2017 to define a more stringent arrangement that enables businesses to conduct telemarketing solely for those people who asked to include their phone numbers in a telemarketing database (the opt-in arrangement). However, as stated, the current draft bill proposes a more lenient arrangement based on the opt-out model, due to the significant potential adverse impact on businesses in the economy.