TMCnet - World's Largest Communications and Technology Community



October 2008 | Volume 27 / Number 5
Compliance Desk

Do Not Call, Five Years Later

By Brendan B (News - Alert). Read
Senior Contributing Editor, Customer Interaction Solutions

October 2008 marks the fifth anniversary of the often controversial US federal Do Not Call (DNC) registry, though individual state had started DNC lists several years before and many continue to have them. DNC compliance is enforced by the Federal Communications Commission (FCC (News - Alert)) or by the Federal Trade Commission (FTC).

So we asked direct marketing and teleservices leaders what has been the impact of the DNC on compliance, complaints, operations, demand for teleservices, and on outbound campaign costs and effectiveness. We wanted to find out from them if they could change the legislation what aspects of it would they modify, and why. Finally we sought to find out where they saw the DNC going from here, going forward.

Here are their responses:

American Teleservices Association (www.ataconnect.org)
Tim Searcy, Chief Executive Officer

The impact of the DNC has been dramatic. Campaign costs have remained stable because of the increased costs of compliance. However, more campaigns have been deemed profitable because average conversion rates have improved by 20-30 percent on average. The DNC has clearly decreased the overall pool of available numbers, and the resulting decline in overall program size has resulted in a decrease of about 1.2 million jobs. It appears that the DNC is effective in cutting the consumer complaint pace, and we have seen a slowing of traditional complaints to the FTC (News - Alert). But fraudulent use of the channel and confusion about compliance requirements are still issues which need to be addressed through education and enforcement every day.

It is difficult to put the genie back in the bottle. The DNC legislation has a few flaws that over time are being worked out, but without a doubt, the issue of exclusive jurisdiction is the biggest problem. Currently states view teleservices regulation related to DNC and all other aspects of the channel to be fair game for legislative action. The reality is that the federal law should clearly pre-empt state laws so that the patchwork of laws is consistent.

I hope the DNC goes nowhere else, but my fear is that the political advantage of attacking this industry will trump common sense. Discussions have begun concerning expanding DNC provisions to inbound calls, in effect forcing companies to consider the DNC choice of a consumer prior to offering additional products on an inbound call. Some states would like to extend the provisions to included business to business calls, fundraising calls and political calls. None of these choices make sense, nor would they improve the customer experience.

Direct Marketing Association (www.the-dma.org) Jerry Cerasale, Senior Vice President, Government Affairs
The FCC has said that our members’ compliance with the Do Not Call list has been overwhelming. Law-abiding marketers are doing what they are supposed to under the law and this has dramatically decreased the number of consumer complaints fielded by regulatory agencies. At the same time, however, complaints about deceptive marketers – marketers who aren’t following the law – are on the rise. These marketers did not follow the law before and they are not following it now. Additionally, the Do Not Call list has virtually wiped out all outbound telemarketing to prospects — although the one notable exception to that are political outbound calls, since they are exempt from the list. There has been no change in effectiveness in terms of outbound calling of customers.

I would follow the Canadians’ lead in terms of what they have done with their Do Not Call list and require consumers to register every three years. That way, the U.S. list would be cleaner, more relevant and up-to-date. Additionally, I would eliminate consumers’ ability to sign up for the Do Not Call list via the Internet, as there is no way to verify a person’s identity when registration takes place online. Indeed, I was a victim of Do Not Call list fraud when a prankster put my phone number on the list a few years ago. Lastly, I would eliminate all business, fax and 800 numbers from the list, as well as cell phone numbers, because marketers are prohibited from calling cell numbers anyway.

The federal list is done, for all intents and purposes, and the fees are now capped. Our hope is that the federal government will clean up the Do Not Call list and that there will be one national list so that the state-by-state, patchwork quilt approach will no longer exist.

InfoCision Management Corporation (www.infocision.com) Steve Brubaker, Senior Vice President of Corporate Affairs
As far as InfoCision is concerned, we have grown our sales by more than 50 percent since the National Do Not Call Registry was implemented. The Registry left many commercial businesses to wade through a sea of new regulations and many Fortune 100 corporations turned to InfoCision to relieve them of the burden. InfoCision has always been focused on quality of service and has invested millions in customized proprietary compliance technology and staff resources—something many companies find almost impossible to do on their own. We have always taken the position that we, not our clients, are primarily responsible for ensuring the requirements of applicable state and federal laws are met.

One of the most important aspects of the DNC legislation that should be reconsidered is the ability of the FTC to verify that the person putting a phone number on the Do Not Call list is the appropriate and responsible party with the authority to add that number. As it stands now, anyone can add any phone number to the list without authentication. This was a misstep the government took in their rush to bring the list to market so quickly.

I really don’t see the Do Not Call Registry expanding any further in scope, now that the FTC has made it so that phone numbers are permanently on the list.

I can only hope that the FTC will begin a more diligent process in the hygiene of the list. However, if you look at where the industry is going, there’s quite a bit of movement, specifically in the area of self regulation. The American Teleservices Association’s Self- Regulatory Organization (SRO) promotes proactive dialogue inside our teleservices community as well as with government regulators. The SRO allows the industry to tackle issue and develop solutions that would otherwise face government scrutiny.

New (and Controversial) Telemarketing Sales Rules Amendments
The FTC has issued new amendments to the Telemarketing Sales Rule (TSR (News - Alert)) which appears to have resolved one issue, split the telemarketing industry over another, and may have made regulatory compliance even more challenging. The key features are:

• Pre-recorded telemarketing sales messages will not be allowed unless marketers have previously obtained recipients’ signed written consent. Prior to this companies that had existing business relationships (EBRs) could use this method to telemarket to their customers

• Predictive dialers cannot abandon more than three percent of calls over 30 days, from three percent per day

• Pre-recorded calls must provide automated interactive opt-out beginning Dec.1, 2008 while the signed consent is required as of Sept. 1, 2009. The abandonment rate change becomes effective Oct. 1, 2008

The telemarketing industry strongly supported the dialer abandonment calculation change as it harmonizes this TSR provision with that in the Telephone Consumer Protection Act (TCPA), administered by the FCC. The FCC uses the 30 day period.

The change will also make using predictive dialers more feasible for smaller campaigns and programs, such as for test markets and simplify managing outbound programs by avoiding having to find out which jurisdiction their clients fall under and adjusting their dialers accordingly.

"This [amendment] will be a plus for both consumers and marketers because it doesn’t penalize marketers for using more targeted call lists," says DMA Senior Vice President, Government Affairs Jerry Cerasale.

"Measuring the abandonment rate utilizing a three percent rate over a 30-day period will lower cost structures and significantly lessen compliance obstacles for contact center management," adds ATA CEO Tim Searcy.

The DMA is disappointed, though, with the FTC’s move on pre-recorded calls, which it says will lead to higher prices.

"[We] had hoped that the FTC would match the FCC’s position on this issue by enabling marketers to leave pre-recorded messages for consumers with whom they had a pre-established business relationship, "states Cerasale. "Instead, the FTC has essentially left their old rule intact, and in doing so will increase the administrative costs for marketers: a practice that will increase the price of goods for consumers."

The ATA is, however, lukewarm to the issue. CEO Tim Searcy said that while the association has supported the EBR for pre-recorded messages, and that consumers should decide to receive such calls, it has never aggressive in pursuing this policy. One reason is that consumers were finding it increasingly difficult to judge the difference between legitimate EBR and fraudulent pre-recorded message calls.

"This was a non-starter for policy makers, and the ATA Board of Directors felt and feel that the EBR exemption would have continued a harmful image of the industry," explains Searcy.

Dean Garfinkel, CEO, of Call Compliance (News - Alert), Inc, which provides telemarketing compliance services, strongly supports the FTC move on pre-recorded dialers.

This rule change eliminates the ambiguity that existed with the EBR exemption on teleselling with this method. It is now clear that any dialer that delivers a pre-recorded message aimed at making a sale without the consumer’s prior consent to receive such calls will be illegal.

He added that opting out of pre-recorded calls has proven difficult because of the nonexistence of either industry best practices or specific regulations for acknowledging the consumer wishes. In contrast to live calls where there is a reasonable expectation that when consumers tell an agent to put them on their do not call lists these wishes will be complied with.

"People are generally unnerved when they get calls from devices that they can’t engage in a human conversation with," explains Garfinkel. "And when you annoy people they won’t listen to you let alone buy from you." Joseph Sanscrainte, a teleservices law expert and attorney with Bryan Cave LLP who drafted standards for the soon-to-beunveiled ATA’s Self-Regulatory project, does not see the pre-recording change per se harming telemarketers.

If anything the industry will benefit from it overall. By barring delivery of certain prerecorded messages, rogue companies will move away from these much-derided tactics, allowing the industry to raise the standards for all calls.

"I don’t see that there will necessarily be an overall drop in telemarketing calls," says Sanscrainte. "The companies that send prerecorded calls to those consumers with whom they have EBRs will likely go to the next least expensive option, and that is to use live agents."

The TSR pre-recorded message change does pose, and points to, compliance hazards for telemarketers, the attorney points out. The FTC’s new regulation conflicts with the TCPA, which permits prerecorded telemarketing calls with EBR. Industries not under the FTC’s jurisdiction, therefore, may decide to follow the TCPA’s more lenient standard.

Complicating matters further, the FCC rule, as with many other federal regulations, can be superseded by state regulations if they are stricter. For example, Arizona does not provide an EBR exemption to its pre-recorded telemarketing prohibitions. The same entities that benefit from the FTC’s lack of jurisdiction over them would still have to avoid prerecorded calls in Arizona, even with an EBR.

There are also details in the FTC regulations that can be confusing to implement. If a pre-recorded call "could be" answered by a consumer the message must contain an automated means to opt-out, says Sanscrainte. Yet if it "could be" picked up by an answering device then the message must have a telephone number for consumers to use to assert a do not call request.

The issue lies in that there is no way to be absolutely certain how pre-recorded calls are being handled at the other end. The FTC creates what appears to be, he says, an "either-or rule", but in practice, he asks, how will telemarketer’s know ahead of time who or what ‘could be’ picking up the phone?

"Prerecorded telemarketing rules present a regulatory minefield because of all the jurisdictions that are out there and the ongoing changes in legislation that occur," explains Sanscrainte. "You have to tread very carefully in how you comply with them."

CIS Magazine Table of Contents

Technology Marketing Corporation

2 Trap Falls Road Suite 106, Shelton, CT 06484 USA
Ph: +1-203-852-6800, 800-243-6002

General comments: [email protected].
Comments about this site: [email protected].


© 2021 Technology Marketing Corporation. All rights reserved | Privacy Policy