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If your company places
phone calls to consumers to sell them anything, or if you sell office or
cleaning supplies to businesses, I urge you to read this entire column,
including the Q&A section that follows. I begin this article with a
disclaimer. You will likely want to use this column as a guide, however,
this is not designed to be a legal document nor a complete summary of the
amendment to the TSR legislation, otherwise known as the FTC Telemarketing
Sales Rule. I strongly urge you to consult legal counsel before making any
decisions on how to deal with these new regulations.
As of October 1, 2003,
new predictive dialing rules, which are part of the latest amendment to
the TSR, will take effect. We have been writing about the do-not-call list
portion of the legislation for over six months, but many people in the
industry feel the dialer rules are being overlooked altogether. This
article will help you understand how these rules will affect you and
highlight the controversy among dialer products vendors regarding their
ability to comply with these new rules.
I further urge you to
forward this column to as many people in the industry as possible. The
article can be accessed on the Web at www.cismag.com.
A link can be sent to everyone you know who will be affected by the
regulations.
The new predictive dialer
rules, which are part of the amended TSR, are as follows:
1)
You must allow each called consumer's telephone to ring for at
least 15 seconds or four rings before disconnecting.
2)
You must have a live agent on the call within two seconds after the
called party completes their greeting.
3)
If you fail to do that, it is considered an abandoned call.
4)
You must not have more than three percent of calls abandoned per
campaign, per day, where the denominator is completed calls, not attempted
calls.
5)
You must play a recording if you abandon a call.
6)
You must maintain records showing compliance with the requirements
for abandonment rate, ring time and recorded message.
As of January 9, 2004:
7)
You are required to transmit your telephone number to a
consumer's caller I.D. service.
8)
If your telecommunications carrier makes it possible to transmit
the calling company's name, the telemarketer will have to transmit this
information as well.
Perhaps one of the most
ironic aspects of the above is in stipulation number three. The definition
of an abandoned call is illogical and some in the industry say ridiculous.
They say this because it is possible to technically abandon a called party
and then connect them to a live agent, at which point they make a
purchase. This is definitely not your father's 'abandoned call.'
These rules are severe,
as they can dramatically reduce the productivity of an outbound calling
center, depending on how the center currently does business. There is no
doubt in my mind that the increased cost of complying with these rules
will exacerbate the push to hire offshore call center workers, especially
when the cost of complying with this rule is added to the cost of managing
the do-not-call list regulations.
There seems to be no
clear-cut penalty for breaking the dialer rules, but sources tell me the
FTC and FCC will likely force a company to sign a consent decree promising
not to repeat the rule-breaking action and promise to pay a fine if the
company repeats the violation. There are currently lists of consent
decrees on the FTC and FCC Web sites.
There is also an
interesting twist in that collection calls are exempt from the TSR
altogether, which means the dialer rules have no effect on collection
calls. This, however, may make it difficult for consumers and the
government to enforce the above rules and the do-not-call list. After all,
if a consumer on the do-not-call list receives a call that he or she
doesn't answer, and only the telephone number shows up on the
consumer's caller I.D. device, he or she will likely report this to the
FTC/FCC without being aware that it may be a collection call and thus
exempt from the DNC list rules. Expect much confusion on this issue. I
predict the general news media will finally pick up this story in the last
quarter of the year.
There is a great deal
more to the TSR than I have room to discuss in these pages, so I urge you
to read the details for yourself by visiting www.ftc.gov
and downloading the details. There are rules regarding keeping records on
transactions, keeping records on past employees and keeping records on
alias names past employees may have used on the phone. I believe the
anti-fraud laws in this document are excellent, but I still wholeheartedly
believe the government has crossed the line and is telling companies how
they can do business. I don't believe this should be the role of our
government. Furthermore, government intervention often increases
inefficiency quite dramatically. I have yet to hear of a government entity
that makes people exclaim, 'Oh my! How efficient' What a great job
that government of ours is doing!' I certainly don't hear this when
people call the IRS or go to renew their driver's licenses or passports.
I will get off my soapbox now because there are a great deal of important
topics to be discussed within these pages, including a company with which
some of you are familiar, Castel.
Who Is Castel Anyway?
In the last 21 years of
covering the contact center/CRM space, I have come across no other company
that has stirred up more controversy than Castel, a Massachusetts-based
corporation specializing in CRM and dialing equipment.
I first encountered the
company when I learned they had announced a new product that bypasses the
Telezapper, which is a device that minimizes telemarketing calls by
playing a SIT or special information tone when the phone is answered. You
know these tones as the very annoying, three high-pitched tones you hear
when you dial a number that is not in service. While dialers can be
programmed to ignore these codes, the Telezapper has been shown to
minimize, if not eliminate, telemarketing calls.
I had been barraged with
complaints about this company as people were aghast that anyone would have
the audacity to manufacture a product that bypasses this device. Actually,
this premise is flawed as the credit/collection industry needs to get
around products like the Telezapper because people use them to avoid
receiving calls on debts that they owe.
I have recently come to
know the people at Castel and have had many hours of meetings with them to
get a handle on what their product does and doesn't do. As it turns out,
the Associated Press picked up the story about Castel from an article in a
direct marketing trade publication. The editor at the trade publication
happened upon a brochure targeting the collections industry. In that
article, Castel allegedly claimed their dialer could get around the
Telezapper. I don't believe Castel would really put out such a release
as I can't fathom what constructive purpose this would have served.
Castel explained to me
that their dialer, named DirectQuest, doesn't realize it is calling a
Telezapper-enhanced phone line as it doesn't use the same technology as
other dialers to discern when a phone is answered. In fact, using ISDN,
DirectQuest is able to use the D or data channel to ascertain when a phone
goes off-hook. Most other dialers use a DSP or digital signal processing
board to listen for a 'hello,' a SIT tone, a fax, etc.
Castel explained that
they invented DirectQuest and customers were using this technology prior
to the invention of the Telezapper. If that's all there was to the
controversy, this would be an open-and-shut case. (Castel presents a
logical case regarding the misunderstanding and there seems to be no
reason for them to intentionally seek so much negative press.)
The story, however, gets
more interesting. Castel states that by using their technology, on which
they have either patents or patents pending, users are able to comply with
the FTC dialing regulations because of the product's use of data channel
technology. They assert that there is no way a dialer that uses its DSP
for answer detection can match this claim because using DSPs will yield a
margin of error outside the three percent abandon rate stipulated by the
government. Of course, Castel says if you turn down the efficiency of
other dialers you can comply, but Castel believes only their technology
allows full compliance with the new rules with no loss in productivity.
Castel is working to
partner with dialer vendors so they can bolt on an upgrade that will make
all vendors compliant. They realize they can't be the world's sole
dialer vendor. If you are interested in more information on the topic,
visit www.castel.com.
This story got very
interesting when I spoke to other vendors in the industry, including SER, Stratasoft,
Concerto, TeleDirect International and Genesys. I have been told by some of
these vendors that Castel is not accurate in its claims and that their
technology is no different than anyone else's. Based on conversations
with some of these vendors, my sense is that most other dialer vendors
really don't fully understand what Castel is doing. I am not taking a
position on this topic as there is not enough supporting evidence for me
to make a decision I can back up with facts. So, instead, I decided to
present Castel's case objectively and ask a number of industry leaders
for their views on this topic through a question-and-answer section. I
hope you enjoy the following section and find it as entertaining as I have
done. In the event that you want to respond to this column, I ask you to
please post your comments to the new TMC Forums section by typing forums.tmcnet.com. Please look for the
Castel topic under FTC Rules. To be honest, I have received hundreds of
e-mails on the do-not-call list and I can't begin to do justice to them
all. Please respond in this public forum so we may all benefit from your
thoughts. With that, I bring you the most controversial
question-and-answer section I have ever seen in a publication that
doesn't focus on politics.
PS: We have been told
that Customer Inter@ction Solutions is the primary resource readers
turn to when looking for issues on complying with the latest government
regulations As such, you will see even more coverage on this topic as the
penalties for non-compliance are so severe, you may be shut down for
making a minor mistake!
Sincerely,
Rich Tehrani
Group Publisher,
Group Editor-In-Chief
[email protected]
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on this article in our forums!
Question And Answer
Session
RT: Is it true that dialers
using DSPs for answer detection are incapable of complying with the latest
predictive dialing legislation?
SER: No. Our outbound dialers
use a combination of network signaling and digital signal processing (DSP)
and comply with the current legislation. Recently, however, some companies
that use only network signaling have claimed that systems that use DSP are
unable to detect a live voice and transfer a call to an agent within the
FTC and FCC two-second time frame. This is incorrect. In fact, outbound
dialing systems that use only network signaling are relying on pre-1989
technology and are the most expensive method to ensure regulatory
compliance. For example, outbound dialing systems that rely only on
network signaling from the telephone carrier cannot perform answering
machine detection, which is an essential feature required by today's
contact center operators. As a result, these types of systems force agents
to waste their valuable time handling answering machines, fax machines,
pagers, voice mail and operator intercepts. As you can imagine, the cost
to contact centers is tremendous with the drop in agent productivity.
Stratasoft: The most efficient
technologies used to identify an answering machine or a disconnected
number are DSP-based. It takes less than one second for a DSP device to
identify an answering machine and if the called party is a live voice,
connect the call to an agent. Under the new rule, those companies that
cannot detect an answering machine will lose productivity because the
pacing algorithm will be based on all connects, not just the live answers.
Concerto: No. Most dialing
solutions use open system DSP cards from companies like Dialogic or NMS.
These dialer manufacturers use DSP technology to be able to provide
solutions that can help customers to comply. The challenge is to get the
messaging information and operating modes to comply, which can be
time-consuming.
All Concerto Software
solutions have the option to use our own DSP, which alleviates the
dependency on an outside vendor. We use DSPs for call progress detection.
In fact, when a customer turns answer machine detect (AMD) on, we use DSP
to determine if it's an answering machine or not and then route to an
agent in under two seconds.
TeleDirect: No. This is a sweeping,
untrue statement being propagated by a particular vendor in an attempt to
drive their specific agenda. Unfortunately, it is causing a great deal of
confusion in the marketplace. Prior to answering your question, it is
imperative that we clarify what types of answer detection, including DSP,
exist in the market, and at what stage in the call-detection process DSP
is used by predictive dialers. When a call is placed to a contact,
there are two unique stages of call detection: pre-connect analysis and
post-connect analysis. To meet the FTC/FCC regulations, while at the same
time sustaining high levels of contact center productivity, it is critical
that both of these stages of answer detection occur:
Pre-connect
analysis. This is the analysis
that occurs after a number is dialed, but before the call is answered. During this stage, the dialer is
searching for a signal that a phone has gone 'off hook.' It is
critical to understand that DSP technology has nothing to with this stage
of call detection. The manner in which this initial signal is detected is
solely dependent upon the type of line (T1 or ISDN) that is being used to
deliver the call. ISDN lines will deliver this initial 'off hook'
signal slightly faster than calls placed via traditional T1 lines, but at
less than a few milliseconds faster, the difference is negligible. Types of
calls detected in pre-connect stage include: busy, no answer, operator
intercept (tri-tone, SIT), TeleBlocker, answer/off-hook (a person,
answering machine/voice mail, fax, etc.)
Post-connect
analysis. This is the analysis that
occurs after a call has been answered. It is during this post-connect
analysis stage that DSP technology is used to discern whether the call is
a live person, an answering machine, a fax machine, a Telezapper, or some
other device. If this key stage is not implemented by the predictive
dialer, all calls will be passed to the agent, regardless of whether they
are a live person or an answering machine, thus reducing the live contacts
per hour and negatively impacting call center productivity.
Now, back to your
question, 'Is it true that dialers using DSPs for answer
detection are incapable of complying with the latest predictive dialing
legislation?' Absolutely
not. Reputable predictive dialers:
-
Complete pre- and post- (DSP) connect detection and deliver live
contacts to agents in less than two seconds from the completed
greeting,
-
Play a prerecorded announcement to live contacts if there is no
agent available to take the call,
-
Provide users the ability to set the maximum
abandoned call rate not to exceed three
percent of contacts,
-
Provide users the ability to set the rings to at least 15
seconds or 4 rings before hanging up and determining that it was a
'no answer,' and
-
Send the name of the
company and phone number to the consumer's caller I.D. This can be
configurable by campaign by most reputable dialers if users are
calling on ISDN lines.
TeleDirect has invested significant resources over
the years to perfect answer detection. When we combine our pre- and
post-connect analysis, we detect and deliver live contacts to agents in
less than a half a second and usually at the completion of the first
'hello' by the consumer.
Preview dialers use
pre-connect analysis exclusively and cannot distinguish the difference
between answering machines, live calls, fax machines, etc. Since they do
not detect the type of answered call, they pass all calls to the agent as
soon as an 'off-hook' signal is detected from the telephone network.
Predictive dialers use pre-connect analysis in conjunction with
post-connect analysis (DSP technology) to further identify calls prior to
routing them to the agents, while still meeting the latest legislative
initiatives. Outbound agents are accustomed to the productivity associated
with predictive dialers screening out most answering machines and other
non-productive calls.
Genesys:
It is not true that all DSPs are
incapable of complying with the latest predictive dialing legislation. Some
DSP technology allows companies to specify the accuracy of answering
machine detection. If the technology supports lowering the detection
threshold, thus shortening the detection time and allowing the flexibility
of sending uncertain answering machine calls to an agent, then the FTC
ruling can be met.
Also, it is important to note that DSP technologies
are not static and do improve with time. The FTC two-second delay
may, in fact, force the use of more powerful DSPs, which can run more
complicated algorithms for detecting answering machines faster and more
accurately.
RT:
How does your system deal with the new legislation? Can your dialer be
used legally with these new rules?
SER: As you know, SER (formerly EIS
International) has been a leader in outbound contact center systems for
the past 14 years ' delivering comprehensive solutions that
ensure compliance while maximizing productivity. Our outbound dialers use
a combination of network signaling and Digital Signal Processing (DSP) to
provide contact center operators with one of the most accurate answer
detection systems on the market today.
The instant SER's
switch detects a live answer, it connects the call to an available agent.
At the same time, SER's Call Manager displays database information about
the customer on the agent's terminal. The switch and Call Manager are
synchronized so the agent hears the customer saying 'hello' at the
same time the customer's information is displayed on the agent's
screen.
In addition, a key safe
harbor provision of the abandon rate legislation is that 'the seller or
telemarketer employs technology that ensures abandonment of no more than
three percent of all calls answered by a person, measured per day per
calling campaign.' Our dialers are precisely the technology required
because they allow our customers to set the applicable abandon rate. The
methods employed by our dialers for implementing, however, are
proprietary.
Stratasoft: Stratasoft has conscientiously
designed our solutions since their inception to ensure our products meet
or exceed compliancy requirements. In addition, through partnerships with
Gryphon Networks, Call Compliance and DNC Solutions we offer full,
comprehensive do-not-call services and our technology is plug-and-play
with those services. Our
StrataDial product can regulate the calls efficiently with a three
percent abandonment rate and our contact center platform already has the
ability to play a message if a live agent is not immediately available.
These have been standard features of our platform since 1997.
Concerto: Yes! We have many features within our
solutions to help customers to comply with new and emerging telemarketing
regulations. Under the laws, companies are required to get live calls
to live agents within two seconds, and a company can only have a
three percent rate of abandoned calls. If the call is not connected within
the mandated two-second timeframe, it is considered abandoned. AMD is a
critical part of detecting live connects and transferring them to live
agents within two seconds. Most dialers can detect some kind of an answer
within two seconds, but they will not be able to detect answering machines
and still comply with the two-second rule. Using open system cards from
external switches makes this even more difficult.
When Concerto Software solutions are
configured correctly, companies can comply with the two-second rule, even
with AMD on. In addition, we have various features --
such as caller I.D. transmission capability, preview dialing, verification
agents and sophisticated pacing algorithms --
to help customers manage their contact centers, maintain productivity and to
comply with FTC regulations. Customers should ask their dialer provider
about compliance with the various components of the new FTC regulation.
TeleDirect: Yes, TeleDirect's solution, called
Liberation 6000, can absolutely be used legally within the boundaries set
by the new regulations. Liberation 6000 includes a number of standard
features to ensure compliance with all FTC/FCC telemarketing regulations,
including flexible and accurate DNC list management, campaign selectable
abandonment rate and variable, a minimum of 15 seconds (four rings), call
detection and connection within two seconds of completed greeting,
automated pre-disconnect recorded announcement, campaign configurable ANI/caller
I.D. and a compliance reporting package.
Genesys: Genesys is a member of the Direct Marketing
Association (DMA), which allows us to receive updated information on new
FTC regulations and anticipate necessary product updates. Genesys Outbound
Contact version 6.5.1 meets the FTC's new Telemarketing Sales Rule
amendments and can be used legally within the new rules.
Specifically:
- National do-not-call
registry. Genesys Outbound Contact allows contact center managers to
import existing DNC registries from any source.
- Call abandonment
restriction. Genesys Outbound Contact enables companies to meet the
two-second maximum delay to connect an answered call to a live agent.
- Transmission of caller
I.D. information. Genesys Outbound Contact supports full transmission
of telemarketer's identifying information.
Genesys recommends the following to businesses
running telemarketing campaigns: subscribe to the national DNC registry
and pay any associated fees to obtain the registry information, download
the national registry database and update calling lists every three
months, train personnel and establish a written process to maintain and
record DNC lists and archive calling lists with corresponding dial results
and DNC list used after each campaign.
RT:
If your dialer does comply, is there any loss of productivity that will be
experienced in order to be compliant? If so, exactly what amount of
productivity will be lost in an average call center?
SER: SER has always been sensitive to the
issue of call abandon. For example, CPS provides the capability to change
the abandon rate by campaign, as needed, to conform to specific calling
requirements. Other dialer technologies may require an abandon rate of up
to 15 percent or 25 percent to reach the same level of productivity as the
CPS system. In fact, we have many customers who have always configured
their SER system at a three percent or less abandon rate, even before the
new abandon rate legislation. Complying with the new FTC/FCC mandates will
have no effect on their contact center's productivity.
For
other customers who have historically operated at higher abandon rate
percentages, SER has developed several new and innovative solutions that
allow contact center operators to recoup the compliance-related
productivity losses they may experience. This includes SERmonitor and
SERvalidate, automated quality monitoring and call validation solutions
which enable contact center operators to dramatically reduce the costs and
resources associated with manually monitoring agent activities such as
script adherence and order validation. In addition, we are introducing a
new outbound dialing switch, which allows users to dramatically reduce
operating costs and, because it uses our patented dialing algorithm, to
increase the number of connects per hour.
Stratasoft: If you measure productivity by the
quality of the contacts, then there should be an increase. If you measure
productivity based upon the number of contacts per hour, then the quality
of the list becomes part of the equation. Our customers should see an
increase in productivity only because our superior technology will allow
them to outpace the competition.
Concerto: Not usually. Using ethical
dialing practices and under standard operating conditions, there should
not be a loss in agent productivity. In fact, quite the opposite. There
are two ways to look at productivity ' the number of calls an agent handles
and how effective each call is. Agent productivity can be positively
impacted due to the fact that under the do-not-call law, only those
customers who wish to be contacted will be contacted. That alone will
achieve several things: it will improve overall agent effectiveness by the
simple fact that the people and technology resources are not investing
time and energy into consumers who do not want to be contacted, and
abandonment rates go down due to the fact that those being called have
theoretically agreed to remain on the call list and the contact center can
dial at lower ratios.
Concerto uses advanced pacing
algorithms to determine how fast or slow the solution dials. We provide
our users with the tools that, when configured correctly, can help
minimize agent idle time and improve agent productivity within the
boundaries of the new and emerging regulations.
TeleDirect: To minimize the impact of these new
regulations on call center productivity, TeleDirect invested significant
time and resources over the past year to optimize our pacing algorithm for
this new outbound calling environment. The primary reason for concern
over the loss of productivity has resulted from the definition of
'abandoned calls' by most predictive dialers, which measured abandoned
calls as a percentage of total dials, not as a percentage of live
connects. For example, if 100 calls were abandoned out of 3,000 dials,
this would result in a three percent abandonment rate under the
'traditional' method of measurement. However, of those 3,000
dials, if only 1,000 consumers actually answered their phones, the
abandoned calls would actually be 10 percent using the FTC/FCC's
definition.
With the recently released version of
our 'Performance Without Annoyance' solution, our customers are able
to ensure compliance with all FTC/FCC regulations while maintaining their
high levels of productivity that accompany the use of a predictive dialer
solution.
Genesys: Because the law is not yet
implemented, it is somewhat difficult to predict the overall impact on
telemarketers and agent productivity. That said, Genesys expects agent
productivity to be negatively impacted in two regards. First, because
the number of calls in queue must be reduced, there is a greater chance
that agents will have to wait for a live connection. Secondly,
complying with the two-second rule means that some answering machine calls
will be connected to the agent. However,
Genesys also believes there will be a positive impact on telemarketing
companies. As the do-not-call lists remove those consumers unlikely
to purchase products and services over the phone, agents' success in
closing sales may be increased. Further, as telemarketers focus more
on expanding existing relationships with receptive customers, the negative
perception associated with telesales will be significantly reduced, if not
eliminated.
As a result, productivity should not be
measured by the number of outbound calls answered by an agent, but rather
on the ratio of sales closed to calls completed.
RT:
What do your current customers need to do to their systems to become fully
compliant with the latest dialing regulations?
SER: Ensure their systems are
operating with our most current release of our software and that their
systems are properly configured to meet or exceed the FTC/FCC regulatory
mandates.
Stratasoft: Our
customers need only to call our help desk and ask for the call compliant
reports. Because not all industries are required to meet the FTC
regulations, customers also may request a feature that allows the system
to only default to and run settings based upon the FTC regulations. As a
manufacturer of contact center products, it is our responsibility to
ensure that our products comply with the most current legislation and
offer the latest technology and features. Our customers are protected from
obsolescence because all our new enhancements and capabilities are
incorporated in new software updates, which our company releases at least
twice a year. All customers who have a Stratasoft maintenance program are
eligible to receive the updates at no additional charge.
Concerto:
Companies need to put processes and technology in place that will help
them be successful within the parameters of the regulations. The right
contact center solution can help automate much of the work that is
required to demonstrate compliance. By understanding the law, companies
will know what technology feature-functionality they will need to comply.
Concerto Software has developed a detailed white paper
describing the specific features within our solutions that can be
configured to help customers to comply. For example, companies will need
to pull certain reports to demonstrate compliance and Concerto Software
has created standard reports to accomplish this. Therefore, companies
simply need to add these new standard reports to their reporting package.
TeleDirect: In order to comply,
current TeleDirect Liberation 6000 customers will need to set their call
abandonment rate to not exceed three percent of live connects, set the
number of rings to be 15 seconds or four rings before determining the call
is a 'no answer' and disconnecting, and activate the
'pre-disconnect' message feature and pre-record a message that states
the company name and phone number. Once this feature is activated,
the pre-recorded message will play whenever a consumer answers the phone
and no agent is available to take the call. Customers must also purchase
and import the national do-not-call list into the dialer's database. Once
imported, this list/registry is checked prior to every dial attempt to
ensure that no one on the list is called unless it is an exception
campaign such as calling existing customers, surveys, collections,
charitable solicitations, etc.
Genesys:
Genesys Outbound Contact 6.5.1, our current version, supports compliance
with the regulations. Genesys customers using predictive dial mode will
need to observe the regulation by setting the over-dial rate with less
than or equal to three percent so that all answered calls are transferred
to the agent in time. Outbound Contact 6.5.1 also supports full
compliance for customers using other dialing modes, such as preview or
progressive.
Genesys is in the process of providing a product
advisory to our existing Outbound Contact customers to explain the
regulation and provide best practices and recommended guidelines on using
the Genesys software to be in compliance with the new FTC regulations.
Special thanks to:
Doug Smith, Vice
President of Sales, Castel
Lawrence P. Mark, Chief Technology Officer, SER Solutions, Inc.
Jean-Marc Mezin, Product Marketing Manager, Genesys
William R. Hennessy, President
and Chief Executive Officer, Stratasoft, Inc.
Jim Mitchell, Founder and Fellow,
Concerto Software
Kathleen Kelly, CEO, TeleDirect International, Inc.
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