Rep Moran:
I have
recently relocated back to
While in
The Denver judge (Edward Nottingham, Mainstream Marketing Services Inc. v.
Federal Trade Commission) would imply that if a do-not-call list is to be
applied, it should apply to all entities, commercial or not. It seems to me
that the best way to draw the line is to allow calls to individuals who have
somehow expressed an interest in the organization that is calling them. Going
to the opera would then allow an arts organization to make one unsolicited call
to a prospect for contributions (and once or twice a year afterwards for
renewals). Supporting political organizations (which I do) would allow
fundraisers to call within reason. However, no entity should call an individual
blind, when there is no basis for believing that the individual or family would
have any interest. For example, I get calls from debt consolidation services
even though I do not have overdue credit card balances. This is offensive.
I am certainly concerned about the effect of this controversy on employment.
Telemarketing sometimes appeals to people as a way into the job market, and has
been used (as in
Thank you for your attention.
Notes:
The
insult to telemarketing workers and to the industry arguably results from the
public abuses by some but not all companies. Generally, most charities had
restricted their calling to persons that have somehow indicated some at least
distant interest in the issue at hand. The enforcement of do-not-call is now in
a confused status because of the Notitngham ruling;
the reader may follow this day-to-day at major news sites. (On
However,
parties may be prohibited within reason from delivering their speech to
unwilling or possibly vulnerable recipients. The extent to which technology
makes this possible is still a subject of COPA litigation. And so it may be
with telemarketing. The underlying question, apart from the content of the
speech (commercial or not), is the accountability of the speaker for
monitoring, auditing or authenticating how it is delivered and whom it reaches.
The
logical conclusion is that a “do not” call list purchase and use could be
required of all telemarketers and all telefunders.
This might harm the telemarketing industry and harm persons employed in the
direct marketing business, even those raising funds for arts or for charities
and individually conducting their work responsibly. So, one asks, should
organizations that can show that they do not “cold call” unwilling recipients
be excused from using the “do not call” lists? If so, the public credibility of
direct marketing as a business (and of its employees) might be restored,
although a somewhat lower levels of business and employment. The relevant concept is called target
marketing. But technology has, in different areas, encouraged low-cost gang
marketing even when the sales percentage or “conversion rate” is very low.
Jonathan Krim provides a good overview in the
How
could this targeting be done? For one thing, even smaller in-house calling
operations might have to be heavily automated and consolidated for compliance
audits. (Most larger operations are heavily automated with dialers already.)
Another measure would be to require calling operations to achieve reasonable
conversion ratios: say 5% for new acquisitions and 60% for renewals. Such
requirements could be applied to individual employees. Such measures would tend
to show that direct telephone marketing or fund-raising operations are not
calling disinterested persons excessively or abusing the public. The conversion
ratio rule might minimize the effect on employees, because typically employees
in this industry only make enough to live reasonably on if they do close a
sufficient percentage of their calls, according to different lead groups;
success in this business tends to require a certain “naturalness” in connecting
with people and a certain enthusiasm, and these are good work traits. Actually, for the industry to hire and retain
only people who maintain a certain level of sales performance (quotas and
conversion ratios) and discipline (attendance, punctuality, regimentation) is a
way to guarantee that the direct marketing activities are good-faith,
legitimate and of value to the public rather than an annoyance or intrusion.
Sales culture has its own norms of success, and these sometimes include notions
like “transaction oriented rather than relationship oriented,” and one-call
closing or one-contact closes. Within these parameters, “guerilla marketing”
(or is it “gorilla marketing”) can make some sense.
It
may be reasonable, given the nature of a specific line of business, to require
that the operation only call persons whose actions have indicated a reasonable
likelihood of interest. So an orchestra could reasonably consider anyone who
has attended at least three concerts as a legitimate prospect for donations
(only one call per year). Maybe a long distance telecommunications company or
Marketing
services may well turn more attention to inbound call center
telemarketing, such as when a travel reservations agent sells packages on
inbound calls or a computer company sells maintenance plans. These would not
have any real public objection.
Also,
around
This
particular application of Free Speech must, of course, be balanced against the
“fundamental right” of people to be left alone in their own homes (most of the
time, at least); plenty of commentators discuss this. And it is also
interesting to compare the First Amendment arguments here with those in the
campaign finance reform laws and litigations.
There
is a telling story on telemarketing as a job in The Washington Post Magazine,
Persons
and businesses involved in telemarketing and telefunding
would do well to review a few of the FTC documents relating to the issue. For
example:
· Telemarketing Sales Rule
from the Federal Register (PDF)
· Complying with
the Telemarketing Sales Rule
· Simplified
discussion of Telemarketing Sales Rule for consumers
· Simplified
discussion of national Do Not Call List (Q&A) for businesses
· Simplified
discussion of national Do Not Call List (Q&A) for consumers
A
few potential controversies in the rules need to be addressed. First, any
for-profit business engaged anyway in making unsolicited sales telephone calls
must purchase and use the national registry (which could be very expensive for
a small service business); however a business that does not make unsolicited
calls at all (mine does not) apparently need not purchase it (although small
portions of it are free or inexpensive; see the FTC quote below).
There
is some controversy over non-profits. Non-profit organizations that do their
own marketing are not covered by FTC rules at all, although they are covered by
FCC rules. This generally means “common sense” and maintaining their own do not
call lists but exemption from the national ones. When for-profit companies call
in their behalf, however, all of the rules apply except that for-profit
companies need not use the registry when calling for donations for non-profits,
charities, political organizations, etc although they must honor specific
do-not-call requests for these, must use the national list when actually making
sales calls (as opposed to contributions rewarded by complimentary gifts) and
must follow all other rules (such as the
Here
is an important quote: (from the second link above):
“Some types of businesses
are not covered by the (Telemarketing Sales) Rule even though
they conduct telemarketing campaigns that may involve some interstate telephone
calls to sell goods or services. These three types of entities are not subject
to the FTC’s jurisdiction, and not covered by the Rule:
1.
banks,
federal credit unions, and federal savings and loans.
2.
common
carriers – such as long-distance telephone companies and airlines – when they
are engaging in common carrier activity.
3.
non-profit organizations – those entities that are not organized to carry on
business for their own, or their members’, profit.
“These types of entities are not covered by the Rule because
they are specifically exempt from the FTC’s jurisdiction. Nevertheless, any
other individual or company that contracts with one of these three types of
entities to provide telemarketing services must comply with the Rule. Examples:
1.
A
nonbank company that contracts with a bank to provide
telemarketing services on the bank’s behalf is covered.
2.
A
non-airline company that contracts with an airline to provide telemarketing
services on behalf of the airline is covered.
3.
A company that is acting for profit is covered by the Rule if it
solicits charitable contributions on behalf of a non-profit organization.
“Keep in mind that a company soliciting a charitable
contribution is not required to comply with the Rule’s National Do Not Call
Registry provisions.”
(however the third party for-profit
marketing company would be required with these registry provisions if selling a product or service having
commercial value for the charitable organization, whereas the non-profit would
not be held to the DNC registry even when making sales calls if it made them
in-house; a third-party also might be
exempt if itself had non-profit status – interpretation mine)
Here
is the comment by the FTC from that file on how home-based businesses may or
may not be affected:
“How does the National Registry impact small, home-based direct sellers? FTC staff does not contemplate enforcing the National Do Not Call Registry provisions against individuals who make a sales calls out of their own homes to personal friends, family members, or small numbers of personal referrals. In fact, most of the calls made by such small direct sellers probably would be local or “intrastate” calls, and therefore not covered by the TSR. The TSR applies to telemarketing campaigns that involve more than one interstate call.
“Nevertheless, small
home-based direct sellers should be aware that the Do Not Call regulations of
the Federal Communications Commission (FCC) cover intrastate calls. The FCC
regulations exempt "personal relationship” calls – where the party called
is a family member, friend, or acquaintance of the telemarketer making the
call.
”As a matter of good will, small direct sellers may want to avoid contacting a
person whose number is on the Registry. The National Do Not Call Registry has a
free, single number lookup feature to enable small direct sellers to verify
whether an individual number is in the Registry database.”
Up to five areas codes
from the DNC registry may be accessed for free, with $25 per area code
thereafter.
The Wall Street
Journal
published an article, “Brokers Put Freeze on Cold Calls, Use Shoe Leather to
Add Clients,” by Lingling Wei,
ãCopyright 2003 by
Related
blog entry on Internet “do not track” proposal.
For
comments, email me at Jboushka@aol.com
and indicate if I may post your comment.
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