Handling The Next Telemarketing Regulations

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Handling The Next Telemarketing Regulations

Telemarketing is rarely in the news these days, and that's a good thing. The advent and acceptance of Do Not Call (DNC) and predictive dialer abandonment regulations in the U.S. and Canada appear to have had the intended effects. That is they have lowered--but not eliminated--annoying calls that had turned off more customers and had prompted them to spend their money elsewhere that they had attracted and revenue generated.

In doing so the DNC legislation also saved the telemarketing industry and the jobs it creates. So ticked off were lawmakers who were being bombarded with consumer complaints that they didn't care about the risk of employment losses. And that's unusual for politicians.

Tom Cardella, founder of Thomas M. Cardella Associates, and one of the teleservices industry's leading lights, called it right in a recent article on TMCnet:

"There has been much hand-wringing about the effects of the national Do Not Call list. It has been blamed by some as the cause of huge job losses in the teleservices industry."
"I don't agree. Those jobs would have been gone anyway because consumers were getting annoyed with unwanted calls and were hanging up, not answering, and otherwise not buying, which was making outbound teleservices more costly and less profitable."

Concerns about annoying telemarketing calls appear to have been superseded by more pressing worries: like keeping jobs including in teleservices, hence the interest in preventing more them from going offshore and bringing those back that have left.

That does not mean that telemarketing is finally free of hassles, and resulting attention of lawmakers. Because there continues to be other aggravating and costly-to-consumer telemarketing practices which are on their radar screens. Once the big targets of the economy and employment have been knocked off it is a safe bet that they will turn their sights to these issues such as:

1. Random calling and DNC list abuse. Fraudsters and greedy, irresponsible if lawful businesses are or are paying teleservices companies to make random calls even to individuals who put their names on DNC lists. Some have used the DNC lists to make calls

2. Continuing stupid telemarketing/outbound practices. High on the list: not having their names show up and 'Number Unavailables' on called parties' Caller ID

Yes, stupid. Many consumers use Caller ID to screen calls. If they don't know who the caller is they don't answer. And consumers are getting ticked off at the dumb firms who don't let them know who they are. Many would no doubt love to see those practices banned or deploy a ready tech fix that blocks all unidentified calls with the option of programming from phones or computers lists of acceptable numbers.

3. Calling to wireless numbers. Prohibited except for emergencies and or if there is prior express consent, this issue is much more problematic as more people are using, forwarding calls to, and increasingly ripping out their landlines (like the infamous definitely don't-do this-at home T-Mobile ad with the woman chainsawing telephone [actually 3-phase power, no phone lines] poles) for wireless.

The FCC is looking at, in response to a petition filed by Paul D.S. Edwards, whether creditors can place autodialed or prerecorded message calls to a telephone number associated with wireless service that was provided to the creditor initially as a telephone number associated with landlines.

It will be interesting to see how the FCC rules on this issue. Requiring express consent for all wireless calls including ported will accelerate wireless adoption--and be a boon to cell firms.

Yet regulators are usually loath to let rules stand in the way of legitimate activity such as collecting debts, and to let those who have such obligations to hide behind regulatory language to avoid meeting them.

There is also the issue of fairness to businesses who in good faith call landlines only to have the transmissions answered on cellphones.

Does the FCC open the gates to wireless users, who pay for their inbound calls, to receive many more calls on their devices at their expense by providing such 'safe harbors' for creditors and others e.g. telemarketers making lawful calls via autodialers?

Or does it decide to go beyond the Do Not Call list and make all outbound calls opt-in with express consent because such calls, wanted, undesired but lawful and proper i.e. collections, and unwanted cost consumers money?

Steve Brubaker, senior vice president, corporate affairs of InfoCision, a leading teleservices firm, pointed out in a recent blog and had informed the FCC that "it is ludicrous to think that a consumer would want to abolish all existing business relationship pertaining to a phone number just because he or she moved the number from their home phone to their cell phone.  Think about it... if the petition goes through, then every consumer that wants to retain its existing business relationships, and allow those companies to call it using that same phone number would have to contact those companies to give them express consent to do so.  What a waste of consumers' time!

"And we're not just talking about collection and solicitation calls, but also notifications of credit card fraud, interruptions in telecommunication service, and many other issues of which the consumer typically wants to be notified. 

"In addition, the detailed lists that teleservices companies like InfoCision have painstakingly built over time would be rendered useless, unless we contacted each of the consumers on the lists by some other method to reestablish consent to be contacted by their recently ported cell phone number.  It would be nearly impossible and terribly expensive to undertake such a task."

There has been a powerful call for industry self-regulation to handle issues such as these. It can and has been argued that had there been an effective self-regulatory regime 10-15 years ago the present DNC and other rules could have been avoided.

The advocates of this viewpoint are correct in one sense: developing best practices standards, educating the industry on them, and backing them with penalties such as expulsion from trade organizations that adopt these standards can and will reduce violations. There has been excellent work in this area by the American Teleservices Association through its SRO (Self-Regulatory Organization) and by the Canadian Marketing Association (CMA).

There is certainly a need to get and keep the legitimate players on their toes. Witness the recent regulatory actions involving certain cable and satellite entertainment firms, whose names need not be repeated here.

The CMA has one of the most stringent set of telemarketing best practices/self-regulation there is. The CMA, unlike its U.S. counterparts, has taken a smarter, more politically astute approach to regulations. Instead of confrontation and foot dragging it took an accurate reading of the situation and chose to work with elected officials and departments. It got what it wanted including the canning of a proposal to include B2B in Canada's DNCL.

Yet not even the CMA was able to forestall regulations or prevent ongoing telemarketing problems. That's because of the biggest weakness of self-regulation in this industry which is the lack of barriers to entry. Anyone can set up a telemarketing business and many do, and they don't have to join a trade organization and many don't. Their clientele could care less, especially those that don't mind them working the gray areas in boosting results.

The CMA has shown one way forward and that is to create or set the basis for doable legislation. Most of the CMA's best practices, including calling hours got adopted into Canada's revamped telemarketing laws.

In doing so the CMA has followed the route of many other organizations in creating consensus rules and standards that have become accepted and enforceable regulations. For example the offices that we work in have been wired in accordance with legally mandated electrical codes and government workplace safety regulations that have their origin in private consensus standards such as ANSI in the U.S. and the CSA in Canada.

To ensure that the next set of regulations that will be coming down the pipeline from legislators are fair and effective the telemarketing industry needs to devise some solutions of their own, use their self-regulatory mechanisms to test them and build consensus and at the same time sit down with lawmakers to go over these issues. That the industry is already taking proactive steps to come up with answers that could offer them guidance acknowledges the pain the lawmakers are getting from their constituents, which gets them onside.

In that fashion, by working together the industry and government will have a fair set of future rules that address needs which everyone can live with.


The Canadian government has introduced Bill C-27, Electronic Commerce Protection Act (ECPA) designed to deter spam but which also repeals the Canadian Do Not Call List, which has been criticized by privacy advocates for not doing enough to stop unwanted phone calls.

One important difference that could shape telemarketing as the legislation winds itself through Parliament: the ECPA is opt-in wheras DNCL is opt-out, as pointed out in Michael Geist's article in today's Toronto Star. I wouldn't be surprise to see telemarketing made opt-in to get rid of both the DNCL and the issue of reaching cellphones.

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1 Comment

Random calling and DNC list abuse. Fraudsters and greedy, irresponsible if lawful businesses are or are paying teleservices companies to make random calls even to individuals who put their names on DNC lists. Some have used the DNC lists to make calls
It is really a good view.
Thanks for this.

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