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Outbound Focus      
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Article 3
'An Overview of
Do-Not-Call Sytems'
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Any market where outbound calling has established itself, has also had to consider what to do for consumers who don't wish to be called. This has not always been a fashionable topic, and still isn't in some quarters, with some telemarketers still asserting their right to call anyone whose phone number is obtainable, by whatever means, in the public domain. We think (hope) that we are right in suggesting that this is very much a minority view, even in the US. We strongly believe that a necessary feature of a healthy outbound (any) market, is one where buyers, as well as sellers, can effectively withdraw from it.

Different countries are responding to this in different ways. In this issue, we turn the spotlight on the following countries:

1)   United States
2)   Australia
3)   Sweden
4)   United Kingdom

1)       United States                       < TOP >

The US has an interesting mix of laws and self regulation, as follows:

  1. The first federal law on Do-Not-Call was the Telephone Consumer Protection Act (TCPA) of 1991, regulated by the Federal Communications Commission (FCC). This law applies to calling lists maintained for individual companies. So, for example, an outsourcer who is asked to strike a name from a list they used for Company A, may still call that number in respect of Company B. The maximum fine for persistent violation is $1500. As well as taking direct action themselves, consumers can also request that their state attorney general or the FCC itself take out a prosecution.
     
  2. There is another federal law on unsolicited sales calls, the Telemarketing Sales Rule (TSR), which is part of the Telemarketing and Consumer Fraud Abuse Prevention Act. Again, this applies just to individual companies. See the Federal Trade Commission (FTC) and the American Teleservices Association (ATA) websites for detailed comparison of both this law and the TCPA.
     
  3. In recent years, states have been passing their own laws to set up Do-Not-Call systems. These systems look to be all-encompassing, in that anyone making outbound calls in the US is obliged to comply. For example, a telemarketer in Florida calling into Tennessee must clean his list against the local Tennessee list. Willful failure to do so is subject to penalty.
     
  4. And, on the self regulatory front, the US Direct Marketing Association (US DMA) have maintained a Do-Not-Call list for some years. This list, which comprises several million names is for both member and non-member companies. The DMA says it is taking a tougher line than hitherto on member compliance with its list. As in the case of the State laws, the DMA's list is intended to give protection against calls from any member, rather than just individual companies. Compliance is expected from DMA members, and the list is also available to non-members.

There is a plethora of riches here. Here is our assessment:

The Federal laws are quite encompassing, but probably not widely known about, among consumers. Several commentators have also suggested that it is difficult for consumers to take action in respect of them. But the major objection to them, and this is very much our view, is simply that they apply at a very limited level, namely to companies, and not to all calls. On an annual basis, many consumers in the US receive calls on behalf of hundreds of organisations. Getting all these organisations (or the outsourcers calling on their behalf) to register Do-Not-Call requests effectively is a tall order, especially when the call is not a good one.

So partly in response to this, individual states began taking their own action, by setting up their own Do-Not-Call lists. No need to get your details passed on by a telemarketer, and effective for any company planning to call you, whether in that state, or in most(?) cases anywhere else in the US.

Direct Newsline reported on Jan 4 2001 that the number of states with Do-Not-Call lists is going to grow to 33 this year. When two thirds of the states have got a Do-Not-Call system in place, the pressure upon other states to follow suit may well be irresistible, whether or not they may have defeated legislation for this in the past. Let's have a look at what the ATA have to say on this issue:

"A mandated do-not-call list for each and every state, in addition to the company specific do-not-call list, places an unnecessary burden on the teleservices industry that would become increasingly costly and time consuming...

On the state level... statutes differ widely in how they define exemptions... The list of exemptions to this 'do-not-call' legislation can be broad or narrow. Generally states will exempt 'free speech' teleservices, such as those fundraising for political or charitable purposes and those making calls for survey research purposes...

ATA believes the current TSR Do-Not-Call list requirement is adequate to protect consumers from unwanted telemarketing sales calls. The ATA opposes state do-not-call lists but supports the TSR company specific list. If the choice becomes one of a myriad of state lists versus a single federal list, ATA supports the latter option."

These extracts reprinted with the kind permission of the ATA. Click here for the full text.

The ATA's comments about preferring a national Do-Not-Call list to a myriad of state run ones, strikes us as being slightly prophetic. If consumers really want their 'opt outs' to be effective, in the sense that the call center industry will ensure their compliance, then we understand the ATA to be saying that a national list is a lot easier to work with, than a collection of state lists, all with differing compliance requirements. The US DMA also appears to have come out in favour of a national list. Joe Daniels, a lobbyist for the DMA is quoted in Direct Newsline on 31 Jan 2001 saying that the DMA would like to see all state Do-Not-Call lists merged with a national list that could be accessed and used by all telemarketers. (Note: We have not managed to have Joe's quote confirmed at the time of going to press.)

We can probably expect much debate by politicians over federalism versus states rights. But the real issue at stake is efficiency. Without that, widespread compliance with Do-Not-Call is a pipedream. So, let's hope that the lawmakers consider the respective merits of state and national systems very carefully, and what is required to get telemarketers' compliance.

Bill HR 3180 from the last US Congress is now back in the current Congress as HR 232. It includes a provision for a national Do-Not-Call list and proposes using the DMA's list. The DMA might welcome this from a cost standpoint, since if this bill gets enacted, it would presumably mean that administration costs would no longer fall on them.

If a national system were to be implemented in the US, one industry acquaintance of ours wondered at how it might cope, given the potential size of the Do-Not-Call list. In IT terms the application is a simple one, and with the right kind of planning, we don't see anything standing in the way of a low cost service to subscribers (i.e. telemarketers and those offering clean up services to them), which together with ease of input for consumers, are probably the key criteria for success.

2)        Australia                               < TOP >

The Australian Direct Marketing Association (ADMA) runs a Do-Not-Call database which is available to all consumers and also to all call center operators, whether they are members or not. In an announcement on the McCann Relationship Marketing web site on October 27, 2000, the ADMA CEO, Rob Edwards said:

"By making the service universally available, we are demonstrating that all organizations that use lists or databases to contact consumers are able to respect an individual's right to limit the number of mail and telephone contacts they receive in their homes."

Registration is permanent and updates of the Do-Not-Call file are provided monthly. Click here for more details.

This sounds similar to the scheme that the US DMA have operated for a number of years. Given that the scale of outbound activities in Australia is a long way behind the US, this looks like a good first step. But it still obliges consumers to register their wish not to be called, to every sales call they get.

With its go-getting approach to business, it will be interesting to see if Australia manages to remain on the self-regulatory road.

Europe

The countries in the European Community are divided between 'opt in' and 'opt out'. In the 'opt in' group, you may only call a consumer with their express consent. Under 'opt out', if consumers don't wish to be called, the onus is on them to get their details into a national Do-Not-Call list. There are only six countries in the 'opt in' group, notably Germany and Italy. We haven't checked to see that all 'opt out' countries have set up Do-Not-Call lists yet, but both of the two countries that follow have one in place.

3)        Sweden                                < TOP >

Consumers may not be called when their details are recorded in the national Telephone Preference Service (TPS). This service was initiated and is financed by nine trade organisations. Consumers remain on the TPS for 3 years only, but can renew to stay on it.

Prospects:
Consumer requests for information can be followed up by a phone call if the prospect has agreed this, whether or not their details are on the TPS.

Customers:
A consumer remains a customer for a limited length of time after a purchase (the length depending on the duration of the customer relationship); thereafter he reverts to being a prospect. It is permissible to call any consumer who is a current customer without checking the TPS (unless they have asked you not to call them, for which purpose you must have an internal Do-Not-Call list).

What happens if companies fail to use the TPS? Under Swedish marketing law it is a requirement that all marketing activities follow 'good practice'. The use of TPS is obligatory when cold calling. This has been agreed between the Consumer Authority and a consortium representing major trade associations (the major users of the phone for calling consumers, e.g. Insurers Association, Swedish DMA).

Non-compliance can lead to court proceedings with a fine and/or punitive damages. However, cases of non-compliance are in the first place expected to be referred to the Committee for Ethical Direct Marketing. This committee, set up and funded by business, has existed for over 10 years and handles complaints about unethical direct marketing, of which telemarketing is deemed a part.

The committee has both public and government acceptance, and its findings are made available widely including in the courts, and in legislative proposals. If a company is found to have breached 'good practice' by the Committee, the details of the case, including the company's name, are published in a press release.

This Committee has proved to be a successful means of 'keeping the doorstep clean' without needing to involve the formal judicial process of courts. Fear of such sanction is expected to be sufficient to keep most Swedish companies on the straight and narrow.

4)        United Kingdom                  < TOP >

The UK national Telephone Preference Service (TPS) has now been in operation for almost two years, and follows an earlier one run for DMA members only. Around 1.2 million consumers have signed up so far for TPS Mark 2. Sources in the UK DMA reckon that, apart from ad hoc calling, 50% of all lists are being cleaned, amounting to around 75% of all numbers in business to consumer calling. An honest admission, with some way to go.

So what happens to persistent offenders?

Well there haven't been any prosecutions yet, but call centers that can't be bothered to clean their lists can expect trouble. The Office of the Data Protection Commissioner is responsible for enforcement, and currently has several enforcement notices outstanding. Failure to comply with these notices leads to fines of 5000 for each breach.

No one has been fined so far, but once there is clear evidence of willful breach, after an enforcement notice has been issued, then the Office of the Data Protection Commissioner has made it clear that fines will follow.

There are some mutterings that the authorities are being slow to pursue non-compliance. But the UK outbound market, although active, is nothing like the size of the US one, and the extent of non compliance is still patchy. We stick to the view we gave in Issue 02 of Outbound Focus that the potential financial penalties, as well as the clear intent to exercise them, will be sufficient to lead to general compliance.


Thanks go to the both the UK DMA and the US DMA, the ATA in the US and FEDMA in Brussels for discussion and input, as well as permission to quote from published sources. Also, thanks are due to a number of individuals in the call center business, especially Philip Cohen (Sweden) and Carl Adkins of TP Technologies (UK) for their inputs.

Outbound Focus has made every attempt to quote correctly from published sources and from other material supplied to it. All opinions set out in this article are solely its own.
 

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