California Predictive-Dialer Bill Is Back

I have written about this subject before, but the passage of a bill last year in Kansas that placed restrictions on the use of predictive dialers — and the return of a similar bill in California this year — prompts a return to the topic.

As noted previously, public concern over abandonment rates has been around for several years. It reached a serious enough level in 1999 that the two major trade associations for the teleservices industry, the American Teleservices Association and the Direct Marketing Association, issued position papers regarding the use of predictive dialers. While the two associations differed in their approach to addressing these concerns, both sent a clear message to their members that the irresponsible use of dialers and technology was unacceptable.

While it was an important step for the industry leaders to take in showing their commitment to the responsible use of equipment, it is incumbent upon the industry as a whole to follow these associations’ leadership and do their part as well. Otherwise, the relative positions of the industry will be irrelevant. What has been a behind-the-scenes debate within the industry is poised to take center stage in statehouses around the country.

Kansas and California introduced legislation in 2000 aimed at eliminating abandonment by predictive dialers. The Kansas legislation, which passed and took effect June 1, 2000, requires either a live operator or a recorded message to be available within five seconds of the call’s connection with Kansas consumers.

Technically, this new statute prohibits abandoned calls. You cannot simply have the dialer disconnect a call when it is placed and connected and there are no available representatives.

The key here is that you may use a recorded message to inform consumers that the call will be answered by an available operator and to relay any other information that will make appropriate disclosures to consumers regarding the company on whose behalf the call is being made. Or the message may give the required disclosures and let consumers know that you will call them back or where they can call you back. Regardless of the message, it still allows some flexibility to use the dialer in a predictive environment.

Last year’s version of the legislation in California was much more troublesome. It would have required a live operator to be available for every call placed to California consumers. The use of a recorded message was available only if the call was for a limited number of noncommercial purposes. Otherwise, the company placing the call would have been required to provide a single operator for every single call placed by the dialer.

Such a requirement would negate the purpose of the “predictive” dialer, which would be rendered nothing more than an “automatic” dialer that only dials a number when prompted by an available telephone representative.

That version of the bill failed to pass the California Legislature on the final day of the 2000 session.

But a new version by the same sponsor has been winding its way through Sacramento again this year. The bill was recently approved by the California Assembly by a vote of 71-2, then was passed by the Senate Appropriations Committee and is headed for vote by the full Senate.

The new version mirrors the Kansas statute in that it requires either a live person or a recorded message to be available for every call that connects to a consumer. Like most regulatory issues affecting the industry, opinions on this issue are all over the map.

Some in the industry support the idea of a zero abandonment rate requirement. They argue that every contact is an important sales (or other) opportunity, and companies should not needlessly anger their potential customers by hanging up on them. Others think that an effective and efficient calling campaign must include some nominal number of disconnects.

The big question is, does this recorded message option remove the concerns of the industry? Does simply engaging a recording allow the dialer to continue to provide a more efficient calling environment?

There are, clearly, valid arguments for all points of view, except those that say an abandonment rate has no corresponding efficiency benefits.

Those of you who actively follow the legislative initiatives that are proposed at the state level should pay special attention to this one, as it is an idea that likely will be seen in greater numbers next year.

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