Caller-ID Tactic May Have Found Legal Loophole

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A new telemarketing tactic -- using residential caller-ID devices instead of prerecorded messages to deliver marketing offers -- has caused consternation among privacy advocates but may not be covered under the federal telemarketing laws.

Some advocates have complained that telemarketers are calling their phones only to hang up after a few rings, intentionally avoiding voice contact with the consumer. Instead, the call leaves a short message on the consumer's caller ID box -- for example, "Free Vacation" -- along with a phone number.

The idea, privacy advocates say, is to get consumers to call back and circumvent federal prohibitions against unsolicited prerecorded commercial messages. Current federal regulations don't cover such practices, experts said.

"I think the current Telemarketing Sales Rule doesn't address this directly," said Allen Hile, assistant director of the Federal Trade Commission's division of marketing practices. "It's kind of a new thing."

The TSR does require telemarketers to identify themselves when they call consumers, but only when a call is completed, Hile said.

Hile said he had heard of the tactic before but was unaware of consumer complaints to the FTC about it. But, because the FTC's database of consumer complaints is so large, it's not possible to be sure.

One company reportedly using caller ID in its telemarketing campaign is Duncanville, TX-based Voice Mail Central. The company markets personal toll-free numbers and voice-mail services to consumers.

Consumers have reported that the company rings their phone long enough for the message "Free Pagers" and a phone number, not toll free, to be displayed on the screens of their caller ID boxes.

Upon calling the number displayed, consumers are greeted by a pitchman, who offers a personal toll-free number and voice mail service for $19.95 a month, plus a one-time $34.95 setup fee. As an incentive, the offer includes a free hotel certificate, good for three days and two nights, and $25 worth of long distance service each month for free.

Consumers enter all their personal information using the pad on their touchtone phone. Charges are included on their phone bills, so they never need speak to a live agent. They can even register for a do-not-call list.

However, consumers have reported trouble with the company in the past. The Better Business Bureau of Metropolitan Dallas reported that there have been 210 inquires about the company over the last three years and 21 consumer complaints, of which seven remain unanswered by Voice Mail Central.

According to the Better Business Bureau, the complaints mostly involved consumers who said they accepted the company's offer of a vacation certificate and voice mail services, but had trouble redeeming the certificates. The bureau said the complaints involved offers given by live telemarketing agents, not by prerecorded message or caller ID.

"It's definitely a pattern," said Jeannette Kopko, spokeswoman at the Dallas Better Business Bureau, said of the complaints lodged against Voice Mail Central. "The most problematic part is that there are seven unanswered complaints. That's the first thing we look at."

Voice Mail Central has no telephone listing in Duncanville, TX. An e-mail inquiry to the administrator of received no response.

Some marketers are skeptical that caller ID is useful in marketing. Randy Corke, vice president of marketing at SoundBite Communications, Burlington, MA, said his company, which specializes in delivering prerecorded message campaigns, has found that contacting a live consumer works better than depending on the consumer to respond. He also questioned if the screen on a caller ID could ever effectively deliver an offer.

"There's only so much information you can convey to caller ID," Corke said. "My caller ID at home can only display 10 digits at once."

Just because the practice is legal doesn't necessarily make it ethical. Whatever the law may be, calling consumers and intentionally hanging up is plain wrong, Hile said.

"It's an infringement on privacy to ring a consumer's phone, intending for the consumer to be aroused, but not picking up the phone," Hile said.


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