A federal requirement that telemarketers transmit their caller ID information is just weeks away from taking effect, and industry experts worry that some providers haven't made the expensive upgrades necessary.
The requirement was among the new rules instituted by the Federal Trade Commission in January 2003, but it delayed the caller ID implementation until Jan. 29, 2004. The rule requires outbound telemarketers to display a telephone number and, when possible, the name of the caller on consumer caller ID devices.
“The majority of the industry is ready,” said Helen Mac Murray, an attorney with Kegler, Brown, Hill & Ritter, Columbus, OH. “I think a fair share is not.”
Before the rulemaking, some telemarketers had argued that transmitting caller ID information over T-1 trunk lines was technically difficult or prohibitively expensive. However, in its rule the FTC found companies could invest in caller-ID-capable telephone equipment to meet the requirement at “minimal cost.”
Not everyone agrees with the FTC's cost estimate. Call center agency Influent finished upgrading its telephone technology to meet the rule two months ago and faced costs in “the high six figures,” said Hayley Weinper, senior vice president of sales and marketing at Influent, Columbus.
“This is a major investment for us,” Weinper said. “We'll be paying for this for years.”
Much of the cost comes from the need to set up inbound call capabilities to receive calls made by consumers responding to numbers left on their caller ID devices, Mac Murray said. When consumers call, telemarketers must provide them a way to enter a no-call request, either through an IVR or a live agent.
Another question is whether companies that use third-party telemarketers should display their own call-in numbers or use the number of their call center provider, which costs less but might be less effective marketing, Weinper said. No study data about the effect of this choice on customer relationships is available, she said.
Making caller ID mandatory for telemarketers helps regulators track phone fraud, said Mac Murray, who previously served as head of the consumer protection section in the Ohio attorney general's office.
Another silver lining for the industry is that some consumers who see a phone number on their caller ID will call back and perhaps even buy, thus capturing some consumers a telemarketing campaign otherwise may have missed.
Other regulatory items on the horizon for telemarketing this year include:
* The national no-call legal battle continues. Telemarketers await the decision of the U.S. 10th Circuit Court of Appeals, which suspended lower court rulings that overturned the no-call list while it considers the case. Though telemarketing legal experts are not optimistic about the outcome of the appeals ruling, a swift decision could let the industry appeal to the Supreme Court during the current term. If so, a final ruling on the issue could be reached by the end of the year.
* Fax marketers won a delay in new rules requiring them to receive written permission from consumers before sending them commercial faxes. The Federal Communications Commission pushed back implementation until Jan. 1, 2005, but has yet to indicate that it intends to soften the regulation. Faxers have the year to lobby the FCC to stop the rule.