Telemarketing: DMA promises fight on FTC's do-not-call list

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The Federal Trade Commission is about to unveil what could be the most significant consumer initiative of Chairman Tim Muris' administration-a mandatory do-not-call list for telemarketers.

The national list would prohibit telemarketers from calling consumers who request their names be included on it. It's been nearly a year since the FTC first proposed a federal version of a do-not-call list, which 23 states already have enacted. The release of the final rules for the list, which will amend the FTC's Telephone Sales Rule, is expected before year's end.

Marketers-who in 2001 sold $274.2 billion in goods and services through telemarketing sales-are girding for a long fight.

"We think the impact will be sizable, not just in lost sales but in lost jobs. It will eliminate a lot of calls," warned H. Robert Wientzen, Direct Marketing Association president-CEO.

DMA's position is that the calls are legal and the government has no right to interfere in legal commercial transactions. "We are continuing to look at our options but won't have an announcement until a final rule is issued," Mr. Wientzen said.

The list is slated to take effect in 2004, though legal challenges will likely delay that. The possibility of an extensive legal challenge to the rule looms even as marketers and some non-profit agencies wait to see exactly how the FTC plans to implement the list. Questions range from who will pay for the list to what kind of "existing business relationships" will be exempted and under what circumstances companies must comply with the rules.

For marketers, the rules would affect attempts to reach consumers initially. Even if the FTC proposes an "existing business relationship" exemption, the rules could affect calls intended to "upsell" consumers to other products or add-ons to existing products and services. The FTC has not defined what would constitute an existing business relationship. Marketing groups do expect the final FTC rules to eliminate compliance by nonprofit groups.

Another group looking for exemption is realtors, who suggest that because home sales aren't completed over the phone, their telemarketing calls shouldn't have to comply. AARP wants them included and indications are that "lead generation" calls will be included.

unresolved issues

Other issues the agency is still wrestling with include how it will harmonize its national list with legislation in 23 states; and how the rules would apply to products appearing annually or magazine subscriptions ending years after an order is taken.

Also unclear is how often marketers would have to buy and check the list, what steps would be taken to remove phone numbers when consumers move, and what steps the FTC would take to ensure that consumers that want to be placed on a do-not-call list are in fact who they claim to be.

It's also unclear whether the FTC will require automated services to use the same list, or whether marketers will be forced to repeatedly buy multiple lists. Several states require marketers to buy their do-not-call lists, and the FTC is considering funding its program with a similar requirement. The FTC proposed charging telemarketers nothing for accessing one to five area codes, $12 per area code for more than five and $3,000 annually to access the whole list. Marketers would have to access the list monthly.

DMA argues the FTC's rules are unnecessary, illegal and that the government is trying to do something private industry does better, citing its own voluntary do-not-call list.

"We don't see this as a proper role of government to spend federal money to inhibit a marketing channel based on irritation," Mr. Wientzen said. "A lot of people don't find it irritating and a good way to shop and here the federal government is taking a position as an arbitrator of what is good marketing."

The DMA is concerned that the publicity attached to the list would lead a large number of people to sign up and that some would be people who aren't comfortable with the Internet and who buy from telemarketers, Mr. Wientzen said.

Some of the people who signed up for the state lists have bought from telemarketers, he noted. He also suggested that people signing up would become frustrated because calls from local telemarketers and from companies the FTC doesn't oversee would continue.

Consumer groups say a mandatory government list easily accessible through the Web or by calling a single phone number would be a major improvement.

"It would be an easy way for consumers to sign up and give them a convenient way to avoid unwanted sales calls," said Susan Grant, VP-public policy for the National Consumers League.

She called existing FTC rules, which allow consumers to ask marketers to place them on individual company do-not-call lists "burdensome."

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