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November 2008 | Volume 27 / Number 6
On The Line

H.R. 1776 on Location Disclosure and Contact Center Certification

By Tim Searcy

I was recently asked to testify in Washington D.C. to discuss House Resolution 1776. Because it is difficult to understand the nature of the legislative process unless you are in the heart of it, let me give a primer. A Representative or Senator in need of political capital in their own district or state crafts legislation to solve a perceived or real problem. The legislation is assigned to a committee and often then a subcommittee to consider and change prior to moving up in the food chain to where it is ultimately voted upon. This legislation was created to address the issue of jobs going overseas by forcing all contacts with consumers by phone to begin with a full disclosure of geographic location. Additionally, the bill requires contact centers register with the FTC and certify that they are in compliance with the disclosure requirement.




Below are excerpts from my testimony on September 11. To see the full testimony, please go to our website at www.ataconnect.org for a video link to the hearing or a copy of the complete printed remarks. “Mr. Chairman, and members of the committee, thank you for the opportunity to attend and testify at this hearing on economic and security concerns in tourism and commerce. The mission of the ATA is to assist in balancing the interests of consumers and legitimate businesses using contact centers to promote the public interest.

Consumer protection is of paramount interest to the members of the ATA. For this reason, ATA members are advised and required to conform to a strict code of ethics including compliance with federal and state laws. The ATA has also worked to create an accreditation process for contact centers including third-party audits to insure that firms are complying with these laws and to promote best practices in compliance and consumer protection. The ATA’s Self-Regulatory Organization has received early praise from both the Federal Trade Commission (FTC) and the Federal Communication Commission
( FCC (News - Alert) ) in their public comments regarding the direction of the teleservices channel and its alignment to meet consumer needs…

Disclosures to comply with these current federal and state laws require identification of the caller, the entity engaged in the call, the purpose of the call, and the nature of the goods or services. Additionally, there is a requirement to transmit the calling party number and the company name to be retrieved by a customer using caller identification technology.

The particular type of disclosure contemplated by H.R. 1776 is a burdensome additional disclosure without clear benefit to the consumer. Each time additional disclosures or compliance requirements are added to the call, call lengths are increased, and the cost of doing business by phone increases and the quality of the interaction with the consumer declines. The rising costs of compliance and regulation are causing many firms to contemplate automation only, or offshore solutions to stay cost competitive…

A term of the industry which has appeared frequently in print is “rightsourcing”. In short, the concept is that the customer type, type of call for sales or service, and location of the personnel are intertwined with profitability and longterm customer satisfaction. It is with no small irony, that we are beginning to see companies from Spain, France, and Australia choose U.S. contact centers to handle calls on their behalf because of both expertise and labor costs.

There are a number of options to requiring location disclosure at the beginning of the call. The ATA believes that a reduction in overall compliance costs could be a means to make domestic contact centers even more affordable. Exclusive federal jurisdiction alone could reduce the costs to industry by an estimated $200 million or more per year and make onshore solutions more desirable. By creating one set of laws, firms would no longer have to manage to an impossible patchwork of overlapping and sometimes contradictory rules.

A second option would be to conduct a more comprehensive study of the costs and benefits of creating location disclosure. No substantive information is available to determine what trends exist, and it is quite possible this legislation is unwarranted and unneeded.

Finally, consumers should have a choice to know of the location of a company’s contact center if they are interested. No federal law currently exists, which mandates that an entity disclose a contact center’s location upon request. The American Teleservices Association Self- Regulatory Organization requires firms that seek accreditation as best practices providers to disclose their location when asked. The ATA would be very supportive of turning this practice into law.

ATA believes the current disclosures required by the TSR (News - Alert) and TCPA are adequate for contact centers to conduct business effectively while keeping consumers informed of their rights. However, the consumer has the right to know, upon request, the location of a call center.”

Tim Searcy serves as the CEO of the American Teleservices Association (ATA).

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