Dire Predictions About Impact of FTC 'Do Not Call' Rules

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NEW YORK (AdAge.com) -- Telemarketers could lose as much as half their national calling audience as a result of new Federal Trade Commission "do not call" rules,
> See the Minnesota Web site at which half the households in the state have signed up for the 'Do Not Call' list.
> See the Direct Marketing Association's list of 27 states with 'Do Not Call' laws.
> Download ammended rule from the FTC Web site section for marketers.

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according to an industry spokesman appearing on Wednesday's edition of the NewsHour with Jim Lehrer.

Matt Mattingley, director of government affairs for the American Teleservices Association, pointed to the impact of do-not-call laws already enacted in the 27 states. He said that some states have had 50% of their households sign to be excluded from telemarketers calling lists. At least one state -- Minnesota -- has had nearly 60% of its households sign up in a do-not-call registry, according to the PBS show's host, senior correspondent Margaret Warner.

Sheer size frightens
"If you take 60% of the customer pool out of the marketplace, it can't help but have an adverse effect on the industry and that is what concerns our industry more than anything else -- the sheer size of such a [national] list," said Mr. Mattingley.

He also pointed out that those states that charged a $5 fee to sign up for their do-not-call registries had a much lower sign-up rate. He said fewer than 5% of households have signed up in states that charge a small fee. Under the new FTC national rules, consumers will be able to sign up for free because telemarketers will be required to underwrite the costs of maintaining and using the lists.

Mr. Mattingley said consumers already have a number of do-not-call options. They can already ask to be excluded from an individual company's telemarketing list at the same time they can sign up with state lists or pay $5 to sign up on the voluntary national list maintained by the Direct Marketing Association, another industry trade group lobbying against the new rules.

'How many lists?
"How many lists does it take to oversee an industry?" he asked, charging that "we are layering bureaucracy on an industry for what we can accomplish already with better enforcement and better education."

Eileen Harrington, associate director for marketing practices at the Federal Trade Commission's Bureau of Consumer Protection disagreed. "The system we have isn't working for consumers," she said. "The company-by-company opt-out in many instances doesn't result in fewer calls because often the telemarketers hang up before you can finish your sentence, 'Please put me on your do-not-call list.' "

Ms. Harrington said the FTC has received more than 64,000 written comments from individual consumers during the rule-making process. She called that level of consumer response "phenomenal" and said that "the overwhelming sentiment in these comments is that the existing system simply doesn't work for consumers."

Half the country
She also predicted that "we could have well over half of the residential phone subscribers" in America's 105 million households sign up for a national do-not-call registry.

She also noted that state lists would continue to be important because the new federal rules do not cover telemarketing activities that occur within a state and, thus, do not involve interstate commerce.

Mr. Mattingley warned that consumers "who sign up for a blanket do-not-call program deprive themselves of the choice of making a determination based on specific product information."

Ms. Harrington countered that "the issue here is who has the authority to decide whether a phone in my home is going to ring. Do I have the authority to make that decision? Or do telemarketers have the sole authority to decide whether my phone is going to ring?"

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