Newsletter Twelve

Dear Reader,

Welcome to Issue 12 of Outbound Focus, a free email publication of Sytel Limited.

This is a Special Edition, looking at what the California Legislature has been doing with regard to outbound dialing. Where this US state leads, other states (and countries) often follow.

We have taken the liberty of adding legislators in both the Assembly and the Senate in California to our distribution list for this issue. We look forward to publishing any comments that any of them may care to make.

Do you have strong views on any outbound issues? Our Champagne Challenge gives you an opportunity to be heard!

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Jamie Stewart

California says “Enough!” to Bad Dialing Practices

What Ralph Nader did for automobile safety, Herb Wesson Jr. aims to do for outbound telemarketing in California. Long a champion of consumers’ rights, the bill he has just sponsored through the Californian Legislature may well be seen as a turning point towards more responsible outbound dialing in the US.

The Californian Senate, with Mr. Wesson as the lower house sponsor, has just passed Bill AB870, which ostensibly obliges telemarketers to tune their outbound dialers to zero abandoned calls. Here is an extract from the bill:

  1. On and after July 1, 2002, no person operating any automatic equipment that incorporates a storage capability of telephone numbers to be called or a random or sequential number generator capable of producing numbers to be called may make a telephone connection for which no person, acting as an agent or telemarketer, or prerecorded message is available for the person called.
  2. Notwithstanding subdivision (a), the (Public Utilities) commission shall establish an acceptable error rate for telephone connections made in violation of subdivision (a). The commission shall determine the error rate, if any, before July 1, 2002.

Readers of this newsletter will know that we have a lot of sympathy with Mr. Wesson’s diagnosis that dialing habits need to be curbed, but it looks like the prescription might exacerbate rather than solve matters. How so?

The Prescription

If the bill is intended to curb what predictive dialers do, it might have precisely the opposite effect.

A compromise was struck during the bill’s passage allowing messages to be played to any consumer who had answered an outbound call, but for whom no agent was available. The idea behind this was that it would avoid any abandonment of such calls. But seemingly, no one thought to put a restriction on how many messages might be played per campaign. In the absence of this, some outbound vendors might well target California, with promises of talk time in the hour for agents in the high 50s, well above what most outbound call centers achieve. Why is this?

Well, predictive dialers wouldn’t rule any more. All that would be required is a crude dialing engine that just keeps launching lots (and lots) of calls. As soon as they finish one call, agents can expect to move straight on to another one, and all other answered calls have to be content with just a message. The law says it is OK, so anyone not competing in this space by ramping up their dialing rate and playing lots of messages, just ain’t competing!

This provision, however, flies in the face of the ban on the playing of messages enacted by the US Congress in the Telephone Consumer Protection Act (TCPA), as long ago as 1991. So despite its retention in Bill AB870, this may well explain a last minute amendment allowing for some abandoned calls, with the decision on how many being left up to the California Public Utilities Commission.

In pre-Wesson days, consumers often got short shrift from telemarketers, and it is still happening. Now that the politicians have got the bit firmly between their teeth, let’s hope for some intelligent and reasoned assessment so that the baby doesn’t get thrown out with the bath water, in response.

How might this happen in the context of Bill AB870?

  1. We wouldn’t be surprised to see the provision on playing messages rolled back to comply with the TCPA; if not, expect chaos in the Californian outbound market if there is no limit on how many messages may be played.
  2. We think the legislators must consider working more closely with the US DMA to enforce the guidelines this body drew up a couple of years ago. These guidelines are tough (albeit still with minor scope for tightening up in several areas). If followed, they would decimate nuisance calls caused by dialers to a mere trickle of what is being experienced in California today. In particular, compliance with them would eliminate the lengthy silences, which have upset the privacy groups there. It would also enable the legislators to take a view on early hang-ups (on numbers that are ringing before a called party is given a reasonable time to answer, because there are no free agents). This issue has been completely overlooked in the bill, and is a major loophole in it.
  3. If we are right on (1) and (2) then that leaves the Public Utility Commission with the unenviable job of deciding a maximum rate for dropped calls. The US DMA guidelines set a maximum of 5% of live (i.e. connected to people) calls, not total calls. Sounds a high figure, doesn’t it? – especially if you are a user and your call center manager tells you that he works well within this limit. But this is subtle stuff. If all the US DMA guidelines are adhered to, then even at a 5% level, the reduction in nuisance calls made by dialers in the US will be totally swingeing. Our estimate is that there will be at least a tenfold reduction. Remember we are not just talking about reducing calls abandoned by dialers, but completely banning other practices that dialers use to generate their productivity. So the danger in going substantially below 5% of live calls (too quickly) is that users of those dialers whose design has past their ‘sell by date’, and there are probably a lot more of them than the industry is willing to admit to, may simply ignore guidelines and/or legislation.
  4. If the legislators get to grips with the US DMA guidelines but are not convinced that self regulation can be made to work, then user (i.e. call center user) compliance may indeed become a legal requirement. Or perhaps better still, legislators may require that vendors operating in this market govern their equipment such that it cannot exceed whatever limits are chosen to work within. It is not such an outrageous idea. Sytel’s dialer, for one, has been compliant with the DMA guidelines since May 1999, and there is nothing intrinsic in dialer design that prevents other vendors from following this lead.

For an up-to-date assessment on the guidelines, with some European perspective, download Article 4 (PDF format). This was written by our MD for a leading European call center magazine, and is being published around the world.

The Diagnosis

It seems odd that the diagnosis should come after the prescription. Well, the fact is we are not entirely sure what lay in the minds of Mr. Wesson and others when this bill (and its precursor, Bill 2721 in 2000) was launched. Our prescription has been written very much with predictive dialers in mind, but with the hope that all forms of outbound dialing will get caught in whatever regulatory net is proposed.

There are undoubtedly rogue predictive dialers on the loose in California and in other states as well. Controls on them are well overdue. For example, a lot of dialer design is predicated on the idea that it is OK to keep called parties waiting, if an agent isn’t free. These design ideas will need to change but that is not the point.

Based on the frequent enquiries that we as a vendor get from the US, we think that it is highly likely that the majority of nuisance calls don’t come from the mainstream predictive users, most of whom act pretty responsibly, but from small users of dialing equipment, say at the 5-10 agent level. Because of the laws of math, these users can only realize decent performance gains by working well outside the US DMA guidelines, and many of them may not be easily induced to work within a regulatory net.

Vendors and users at this end of the marketplace are often beyond the reach of responsible marketing organizations and have few incentives to pay heed to responsible dialing practices, even if they are aware of standards such as the DMA’s.

The real success of Bill AB870 may well lie in how it can be made effective at this end of the market.

On a final note, it is interesting to see that Bill AB870 contains no exclusions, for example in respect of non-profit organizations, political parties and collections agencies. Such exclusions have tended to neuter related legislation in the past. Let’s hope that the example set in this bill will stick.

We are back to our usual format next issue, and still keen to receive entries for our Champagne Challenge!


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