ERA Issues Telemarketing Guidelines

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The Electronic Retailing Association yesterday issued telemarketing guidelines that address issues such as billing practices, the disclosure of information to consumers, privacy and the use of certain technologies such as prerecorded outbound calling systems and devices that block caller-ID systems.


The guidelines were drafted with continuity clubs in mind, said Elissa Myers, president/CEO of the ERA, Arlington, VA.


The ERA -- which includes companies that sell their products through the Internet, direct response television and other electronic means -- crafted the guidelines during the past eight months under the leadership of its Telemarketing Task Force in order to promote consumer confidence through self-regulation.


The guidelines, which are the first that the association has issued regarding the use of telemarketing, come as federal and state legislators have taken an increasingly critical look at the telemarketing industry.


Myers cited the Federal Trade Commission's current review of the Telemarketing Sales Rule and the investigation by several state attorneys general into the use of telemarketing by the continuity club industry.


Such clubs sometimes piggyback on DRTV promotions to offer membership to consumers who phone in to order products. Many continuity clubs also allow customers to join online and enrollment is often consummated by phone.


"We have a significant number of members both online and using direct response TV who are either engaged in or touched by the use of continuity club up-sells," Myers said. "If you follow these guidelines, you are not likely to get in trouble with a club offer that you are making."


Some of the guidelines mirror what the association suggests for making product offers through DRTV, such as providing complete disclosure to the consumer about what is being marketed, the details of the offer and making sure the offer can be substantiated.


Members who violate the guidelines can be kicked out of the ERA and be reported to the FTC or Federal Communications Commission.


The guidelines -- available on the association's Web site, www.retailing.org -- require that customers be notified if they will be billed automatically or regularly. Included in that disclosure should be when the billing will begin, how often the charges will be billed, how much will be charged during each period and the total amount that will be billed when that is known.


The guidelines also require that several pieces of information, such as the marketer's refund policy, or lack thereof, should be disclosed before the consumer's credit card information is taken. The guidelines deal with allowing consumers to cancel their memberships in clubs that offer "free trials." Such offers should include clear disclosures regarding when the trial period begins, when it ends and how to cancel without being charged.
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