I am not a technology expert, so the advances in international telephone connection speed (and decreased cost) are incredible to me. How can it be that a service call to my credit card company can be answered halfway around the globe and that the company may be able to save money on that call (and ultimately may offer me a lower rate or other better terms)? Obviously, the cost of international calls would make this idea impossible 20, 10 or even five years ago.
Besides potential savings, however, this movement also is affecting the legislative field. Two types of telemarketing legislation, one a new type of law and the other a new application of existing law to the booming international telemarketing business, have potential effects on international teleservices companies. Obviously, other restrictions like corporate governance laws or tax laws can affect these services as well.
The new area of concern in some states has been dubbed “right to know” laws – i.e., that consumers have a right to know where the teleservices center calling them is located. At least three legislatures are considering bills purporting to grant a “right to know”: Hawaii (H.R. 107), New Jersey (A.B. 3529) and North Carolina (S.B. 991).
Hawaii has adopted its proposal, which states that “… telecommunications and call centers are respectfully urged to initiate customer right-to-know procedures regarding all inbound and outbound communications. …” The other two bills take “respectful urging” a step further.
New Jersey’s proposal would require that a call center employee state within the first 30 seconds various information, including the state and country where he or she is located. Call center employees in foreign countries are further prohibited from asking for any personal information on an inbound call unless it is disclosed that providing such information is optional and the consumer consents to provide the information. The call also is required to be recorded.
North Carolina’s bill would apply a similar requirement to inbound and outbound calls. All call center workers would be required to disclose the city, state and country where their center is located.
It also provides that a consumer does not have to give financial information to be sent to any foreign country without express written consent.
Bills that implement their “right to know” with a required disclosure of this information by the telemarketer to the consumer, even during inbound calls, may lead to invocation of another right. Forced speech is where the “right to know” may run afoul of the more recognized right to free speech.
Any time anyone, including a business, is forced to alter its speech – such as through a required disclosure within the first 30 seconds of the call – the First Amendment requires that the government have a legitimate reason to force this speech.
This reason is entirely lacking in this instance, especially regarding inbound calls. What possible difference to a consumer could it make if Bank X used a call center in North Carolina, North Dakota or North Scotland? The bank would require its call centers, in-house or third-party vendors, to ensure the security of data and good business practices, or the call center would not be in operation. Any concern with data security is further ameliorated by the fact that misuse of such data is likely a crime.
Forcing speech to prevent a future, speculative crime is usually unconstitutional. When a legitimate motive for forced speech is absent, it is likely that the intent is to discriminate against some speakers vis a vis others, contrary to the protections guaranteed speakers by the First Amendment.
Though these bills are being considered in only a few states, it is important that your business address the issue now through appropriate lobbying and other action if it could harm your business. In our system of government, state legislatures often consider issues before those issues are addressed on a national scale. It can take decades for an issue to gain momentum in the states sufficient for a national agency to take notice and regulate a given area.
An example is do-not-call lists, which were adopted by three states in the early 1980s, growing at the rate of about two states a year in the 1990s, then becoming a national, federal, issue this year.
The second type of law is on the books in several states and requires disclosure of the true name of the employee making an outbound call. With international call centers, however, some true names are unfamiliar and/or difficult to pronounce to some consumers in the United States. The “true name” statutes are a burden on legitimate businesses, and on some individual employees in particular, with no relation to consumer benefit. Consumers would get more benefit if businesses were allowed to use unique, non-deceptive pseudonyms and required to keep appropriate records such that any call from any pseudonym could be traced to the actual employee making the call.
This issue is an example of how states could, and some have, take a page from how the federal government regulates this issue. The Telemarketing Sales Rule requires that records of all fictitious names used be maintained for at least 24 months from the date of creation. The TSR, of course, requires disclosure of the identity of the business making the call and other relevant information.
Businesses faced with an adverse piece of legislation, or legislative movement, should not ignore any tool at their disposal to change the effect the law may have on their business. I suggest lobbying legislators to show how consumers could be better served, and business harmed less, even if I knew that the law was unconstitutional and would be struck down by a court if challenged. Lobbying can be faster, cheaper and more certain – seldom, if ever, can one know with certainty the results of a future lawsuit.
