Vertical: Marketing

Subvertical: Direct Marketing

Article Style: Smart Biz Top Story

Title: Do-Not-Call Lists: The Telemarketer’s Dilemma

Subtitle: State-enacted do-not-call list may be federalism at work, but telemarketers don’t like them. Why would they? Complying with all of them demands time and money.

Quote: "This is federalism at work, states responding to the needs and the rights of their consumers and acting appropriately. If this creates a little more work for a business, I understand their concern. But this is what federalism is all about." Brett DeLange, Idaho Office of the Attorney General

Before there was legislation mandating do-not-call lists, there was Robert Bulmash. Bulmash was a part-time paralegal fed-up with the power and attitude of the direct marketing industry when he founded Private Citizen in 1988. His Naperville, Ill.-based consumer organization invited Americans to fight for their privacy, to take back the property—their phones and private time—that telemarketers had stolen from. Thousands accepted, and many must be glad that they dd.

By becoming Private Citizen members, consumers’ names are placed in the “Private Citizen Directory,” a do-not-call list distributed to more than 1,500 U.S. firms engaged in telemarketing activities. Their names on that list serves as notice to telemarketers: They don’t want unsolicited calls from salespeople, non-profits and survey takers; and they will not permit the distribution of their names and phone numbers. Being on that list also meant that they were extending an offer to telemarketers, a "for hire" contract. If businesses chose to take-up a member’s time and use that member’s phone to make their pitch, the contract requires that they pay $500 per call.

There is no pride in Bulmash's voice when he says he has helped Private Citizens members collect--via negotiations and lawsuits--more than $700,000 from telemarketers. "I'd rather report that members haven’t collected a penny. Nevertheless, our members report a 75 percent drop in telemarketing calls."

Bulmash's do-not-call list is formidable with its 6,800 members, but today it’s merely one out of more than dozen that telemarketers have to worry about, and that’s not counting the in-house list that the Telemarketing Sales Rule of 1995 requires them to keep. Making that outbound sales call couldn’t be tougher.

There's the Direct Marketing Association's (DMA) Telephone Preference Service (TPS). In July 1991, the DMA began requiring its members to be compliant with this national do-not-call list. With 3.5 million consumers having signed up, it’s a list to be reckoned with. Non-compliance can turn into a day in small claims court and compensating the consumer with $500 and $1,500.

Of greater concern to telemarketers are the do-not-call lists adopted by states. Twelve states have enacted do-not-call list legislation. Five states have legislation pending. How can telemarketers keep up?

Take Idaho. The Idaho No Call List goes into effect on May 2, 2001. Telemarketers that call Idahoans on the list will be in violation of the state’s Telephone Solicitation Act. Civil penalties will range between $500 and $5,000. That's easy enough to understand. So are the exemptions: Calls from charities seeking donations and calls from businesses (except telephone companies) that have established existing relationships with consumers.

The first Idaho No Call List, already 7,256 Idahoans strong, will be published in June and will be available to telemarketers in various formats, including CD-ROM, electronic and hard copy. Thereafter, the list will be updated and published quarterly. That sounds easy enough too. But it’s not, and telemarketers have complained. They've told the Idaho Office of the Attorney General, which is maintaining the list, that it will crimp their businesses. The retort from Brett DeLange, who heads the Consumer Protection Unit at the Office of the Attorney General: "We think this will help your business because these are people who don’t want to talk to you. You're going to know now, at least in Idaho, here are some people who have taken the time and put 10 bucks (to register) down because they don’t want you to call them."

It's a good point, but it doesn’t go far with Bill Miklas, vice-chairman of the D.C.-headquartered American Teleservices Association (ATA). He knows that not everyone will want to buy a product or service sold over the phone. "That's the same in a lot of different advertising media. Everybody that passes by a billboard doesn’t buy that particular product. However, (because there are) the people that do buy or are influenced by that billboard, it’s obviously a cost benefit to that particular company."

The heart of the problem, as Miklas sees it, is that there is no uniformity among the states that have adopted do-not-call lists. Lawmakers didn’t consult with each other before sending in their bills. The result: Formats, list layout and publication dates vary from state to state. And that, Miklas says, makes it difficult for small and large business to comply. Staying on the right side of the law requires diligence. This diligence costs both in time and money. And as far as the ATA is concern, state-maintained do-not-call lists are duplicative of the in-house lists telemarketing businesses have to keep. Thus, it’s resources wasted.

Imagine 50 states with do-not-call lists. Miklas says that would be three and half times the mess. Of course, the ATA, which was instrumental in the creation of the Telephone

Consumer Preference Act of 1991 and the Telemarketing Sales Rule, is doing all it can to thwart the spread of state lists. It's working with state and federal lawmakers to create legislation that addresses consumers' concerns.

DeLange has little sympathy for telemarketers. "This is federalism at work, states responding to the needs and the rights of their consumers and acting appropriately. If this creates a little more work for a business, I understand their concern. But this is what federalism is all about."

Sidebar

States with do-not-call list laws: Alabama, Alaska, Arkansas, Connecticut, Florida, Georgia, Idaho, Kentucky, Missouri, New York, Oregon and Tennessee.

States with legislation pending: California, Massachusetts, Mississippi, New Hampshire and New Jersey.

URLs:

http://www.privatecitizen.comhttp://www.the-dma.orghttp://www2.state.id.us/aghttp://www.ataconnect.org