The legislative declaration, found in CRS 6-1-301 states: "The widespread practice of fraudulent and deceptive commercial telephone solicitation has caused substantial financial losses to thousands of consumers and particularly elderly, homebound and otherwise vulnerable consumers."

The bill that passed in Colorado unfortunately mirrored telemarketing legislation passed in California, with a plethora of exemptions for specific types of businesses. Even that didn't satisfy some anti-consumer legislators, and HB 1144 had an expiration date of July l, 1996.

This was a straight repealer, and not a "sunset" review. If Rep. Morrison, or others want the law to continue, they will have to present a bill to do just that. Which brings us to the point of this column:

On August 16, 1994, the U.S. Congress adopted the "Telemarketing Consumer Fraud and Abuse Prevention Act." In the Act, Congress authorized the Federal Trade Commission (FTC) to promulgate rules.

The FTC has FINALLY come out with a reasonably strong Rule against abusive telemarketing practices which takes effect Dec. 31, 1995. Should the Colorado law be allowed to expire, continue with its present language, or be changed to reflect the federal approach?

Under the federal Rule, Attorney General Gale Norton will be able to use a federal court in Denver to seek a NATIONWIDE injunction against a company engaged in fraudulent telemarketing. Presently she can use either federal law or the Colorado Consumer Protection Act (CCPA) to seek an injunction, but only within Colorado. And you can't amend the CCPA to seek a national injunction.

The federal Rule allows the FTC to seek fines of up to $10,000 for each violation, as well as recovery of funds for victims of fraud. But a major problem with the Rule is, as with the Colorado law, in the exemptions. Obviously, if you have a strong Rule on what you can or cannot do but "exempt" too many types of businesses, the law becomes extremely difficult to enforce.

Most comments you may have read in the newspapers about the new FTC Rule were rewrites of "spin" press releases from the FTC. And one reason all the stories read alike is because while the Rule is only ten pages single spaced, the FTC "explanations" are seventy-one pages single spaced, and much of it difficult to understand if one is not "in the business."

One FTC commissioner, Mary Azcuenaga, had this to say: "The Commission has adopted an intricate scheme of exemptions relying primarily on its law enforcement experience to justify its selective application of the requirements of the Rule.

"The...act does not provide the Commission with the express authority to grant exemptions from the Rule...Although the exemptions may be reasonable as a matter of policy, the Commission does not have the authority to second-guess the Congress."

In addition to specific business exemptions, also exempt are calls from one business to another business (unless it involves the sale of office cleaning supplies) calls made to the consumer after a face-to-face sales presentation, or calls initiated by the consumer in response to some types of advertisement.

For the hapless elderly consumer at the other end of the "non-exempt" telemarketer's phone line, the FTC Rule concerning what has to be said up front when the call begins is strong. The consumer must be told:

"They are making a sales call. The nature of the product or service being offered. If it is a prize promotion, that no purchase is necessary to win, and the odds of winning. If there are costs, what the costs are, and the terms and conditions of a refund. Is there is a no-refund policy. If it is an investment, what are the risks and profitability."

There are also some strong disclosures under the CCPA. But the emphasis in the Colorado law is more on "registration" by telemarketers who are not exempt with the attorney general, and on written disclosures with the AG regarding the business. As of early September, 1995, there were sixty-nine registered telemarketers, and several hundred who had received "cease and desist" letters from the AG's office.

The Colorado law also emphasizes the right to cancel and the right to refunds, Class 1 Misdemeanor penalties for violations, and a tie-in with the civil damages sections of the CCPA. Civil damages allow for individual recovery of up to three times actual damages. (The federal law is only available for individual lawsuits if the actual damages are $50,000 or more.)

And the Colorado law provides: "The unlawful telemarketing practices listed...are in addition to and do not limit the types of unfair trade practices actionable at common law or under other civil or criminal statutes of this state."

So what should Rep. Morrison do in 1996? My suggestion is to keep the Colorado law. First, the new FTC Rule was the result of legislation passed in 1994, when the Democrats controlled Congress, and the Act and the Rule could be repealed by the present Congress.

Second, the Consumer Protection Committee of the National Association of Attorneys General on June 28th issued a really vicious condemnation of what the FTC had done up to that point:

"The original version of the Rule was strongly supported by 37 state attorneys general...Unfortunately, the latest version of the Rule does more than substantially retreat from the FTC's earlier version. It actually authorizes telemarketing conduct that may already be illegal under existing state and federal law.

"The commission may also have unwittingly threatened the viability of stronger state telemarketing laws. The bitter irony of all this is that consumers may end up worse off with the current version of the Rule than they were before the enactment of the...Act."

When the FTC commissioners read THAT, they swallowed hard and made sufficient changes in the Rule released Aug.16 to mollify some (but not all) attorneys general.

The Colorado law could go from a "registration" law to an all-inclusive law that covers the types of actions done, as opposed to exemptions for most businesses, regardless of how despicable their operation. And the Attorney General's office could glean the better sections from the FTC Rule and make them part of Colorado's law.

In any event, there are going to be many instances when it is more useful to go the Colorado route: Criminal penalties as opposed to fines only, and protection for consumers who have suffered less than $50,000 actual damages.

Any Colorado continuation law should provide for a Sunset review, rather than a simple repealer. This is an occupational "licensing" law, and a review of the law's success by an agency outside of the AG's office could help passage again in future years.

Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.