MARKETERS GET MORE TIME TO SET UP DO-NOT-CALL CHANGES

FTC Also Details Cost of Buying Telemarketer Blocking List

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WASHINGTON (AdAge.com) -- The Federal Trade Commission is delaying the implementation of all but one of its rules changes governing telemarketing sales until Oct. 1, the same day the its national "do not call" list takes effect.

Two rules changes were scheduled to go into effect today. The decision to delay the one rule change comes after marketers said they could not comply in time with the new provision because of needed technology updates to their phone services, thus unfairly subjecting them to the sizable fines being imposed by the FTC.

$11,000 fine
Companies will be hit with an $11,000 fine

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for each call that violates the FTC's new provisions.

The FTC made its decision Friday, but announced the move today. Also on Friday, the FTC detailed how it would charge companies to access the national do-not-call lists, which carry the names of consumers who do not want to be contacted by telemarketers. (Consumers can begin to sign up for the list in July and it will be made available to companies in September.)

List's cost
Under the FTC's pricing plan, which was seen as a surprise by some, instead of charging telemarketers, marketers must buy the list and then telemarketers could use the marketers' licenses. Marketers would have to pay the fee -- $7,250 for a national list -- multiple times with separate payments due from "each separate division, subsidiary, or affiliate of a corporation."

Smaller marketers would pay nothing for up to five area codes and then $29 per area code after that up to $7, 250.

One of the rules that was to have taken effect today limits a common sales practice known as "predictive dialing," in which more phone calls are made than telemarketers have operators to handle. Many calls are expected many to go unanswered. Marketers say these "dropped calls" happen about 5% of the time, but under the new rules, the FTC requires no more than 3% of calls can by dropped.

Second sales pitch
But a second change is still effective today. Marketers who try to offer callers a second, unrelated product during a sales call are required tape the call and ask callers again for the last four digits of their credit card. That change applies to inbound as well as outbound calls.

Publishers argued that this change could cost their industry up to $870 million in lost subscription sales if alternative strategies can't be successfully implemented.

Rita D. Cohen, senior vice president of the Magazine Publishers of America, said the new rules would end marketers willingness to offer "free" trials of magazines as bonuses to customers because the requirement to ask for credit card numbers would lengthen calls, reduce response rates and necessitate taping calls.

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