Purpose

To determine if the Department of State (Department) is fully implementing the enforcement and collection provisions of New York’s Do Not Call Law. The audit covers the period January 1, 2014 to April 20, 2018.

Background

The New York State Do Not Call law (Law) allows consumers to register their personal mobile and landline phone numbers on a central national registry to reduce unsolicited telemarketing calls. The Department’s Division of Consumer Protection (Division) is responsible for enforcing the Law, which took effect in 2001. Initially, New York consumers registered their phone numbers on a statewide registry. In 2003, the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) collaborated to create the National Do Not Call Registry (Registry), and consumers’ phone numbers that were previously on the New York registry were transferred to the national Registry. The Division uses the national Registry to retrieve New York complaints and also receives complaints by phone and email. The Law was amended in 2010 to include automated calls, known as robocalls, and again in 2016 to require telemarketers to reveal caller identification information so consumers know who is calling and can take steps to block unwanted calls.

The Division investigates complaints to determine if a violation of law has occurred, takes actions to enforce and resolve complaints, and provides information and outreach to consumers. Violators may be subject to penalties up to a maximum of $11,000 per violation. The number of Do Not Call complaints has been increasing, both in New York and nationally. According to the Registry, there were 454,100 New York Do Not Call complaints during the federal fiscal year ended September 30, 2017, up from 217,031 in 2014. As of December 31, 2017, the Registry contained more than 14 million New York phone numbers.

Key Findings

• Our review of the Division’s statistics shows that the number of cases referred for enforcement actions has declined in recent years. While Registry complaints by State residents have more than doubled since 2014, the number of cases referred to counsel for further action decreased in each of the two subsequent years, and just one case was referred to counsel in 2017. The decreases could be, in part, related to turnover and vacancies in key positions. For example, the Director of Investigations position, which was devoted nearly full time to Do Not Call, was vacant for approximately 18 months during our audit period.
• We also found that the data maintained by the Division to document its Do Not Call enforcement efforts was sometimes inaccurate, incomplete, or inconsistent with other information the Division maintained. These deficiencies reduce the data’s usefulness for enforcement, monitoring, and external reporting purposes.
• The Division may be able to use aspects of the FTC’s enforcement process (such as strategies to make the best use of Registry data) to enhance the effectiveness of its Do Not Call enforcement efforts.

Key Recommendations

• Assess current and planned Do Not Call enforcement activities to determine appropriate staffing levels, identify timing benchmarks for key enforcement efforts, and identify improvement opportunities.
• Develop, implement, and communicate written procedures to Division staff that address the accuracy, completeness, and comparability of internally maintained Do Not Call information.
• Evaluate the potential for using FTC resources and strategies (including expanded use of the FTC’s free investigative capabilities) and consumer-friendly alternatives to notarized affidavits to enhance the Division’s Do Not Call enforcement capabilities, and document the resulting decisions.

Other Related Audit/Report of Interest

Department of State: Monitoring of Not-for-Profit Cemeteries for Fiscal Stability and Adequate Facility Maintenance (2016-S-79)