Do-Not-Call Lists, Predictive Dialers Causing Legislative Headaches for Marketers

WEST PALM BEACH, FL — Most states will have some type of do-not-call list within the next few years, and some states are taking a closer look at regulating the use of predictive dialers, said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association.

Leading a heavily attended roundtable discussion of legislative issues at the DMA Telephone Marketing Conference here last week, Cerasale said he expected that 30 to 35 states eventually would have their own do-not-call lists.

About a dozen states have laws creating such lists, which telemarketers must purchase to eliminate numbers from their own calling lists. Some of those states passed laws this year, but they will not take effect until next year.

Some roundtable attendees suggested that it could become a logistical headache for national telemarketers if more and more states keep adding lists that each use different formats and have different types of exemptions.

Some attendees suggested that a national do-not-call list might be a better alternative. Others suggested that some vendors might need to step forward and take responsibility for pooling all the state lists, then use that database to “scrub” telemarketers' lists for a fee. A system then could be worked out to compensate the states for compiling the lists in the first place.

The various state do-not-call lists are having different impacts in each state, according to Cerasale and other attendees. “There are some good things out there,” Cerasale said, citing Idaho's do-not-call law as an example of one that seemed fair and had reasonable exemptions. In Maine, where the state does not maintain a do-not-call list but instead requires telemarketers to use the DMA's Telephone Preference Service, the law also is benign, he said.

Some states, however, have been promoting their lists aggressively, spurring heavy consumer participation.

In Tennessee, for example, where the do-not-call list becomes effective July 1, about 330,000 people already have signed up for it because the state has promoted the list. Florida has only 130,000 names on its do-not-call list but is preparing to promote it aggressively for the first time, according to one roundtable attendee.

One problem arising from the state do-not-call lists is that consumers tend not to understand the nuances of the laws. For example, companies that have an existing business relationship with a consumer are exempt from using the lists.

“We have customers in Tennessee saying, 'Don't call me. If you call me again, I'm going to sue,' ” said Sheila Mushin, director of training and quality assurance at Grolier Books, a direct marketer of clubs. “And the law doesn't go into effect until July 1, and these are our own customers.”

Some attendees suggested that consumer education was necessary to get people to understand the exemptions from these do-not-call laws.

California also is considering a law that would ban the use of predictive dialers, the machines that call consumers and then connect them to live telephone agents after the consumer picks up the phone. Consumers have complained extensively about the machines, which sometimes hang up on people if no agent is immediately available to handle the call.

In Kansas, legislation is pending that would require agents to come on the line within five seconds, but Cerasale said the DMA would not oppose such laws because most predictive dialers either connect to an agent or hang up within two seconds.

Cerasale also said he did not expect to see “a big crush” of legislation surrounding predictive dialers, although some attendees expressed concern that states might begin to copy each other if one or two pass laws restricting the use of such machines.

In the meantime, the DMA is in the process of reviewing its guidelines for the use of the machines and is considering lowering the maximum “abandon rate,” or the percentage of calls in any campaign that are disconnected after a consumer answers the phone. The guidelines currently suggest an abandon rate of 5 percent, but the DMA is considering changing the rate to 2 percent or 2.5 percent.

“What can you do?” Cerasale said to the roundtable. “You can turn down your dialers. I know it screws up your productivity a little bit, but you've got to do it.”

Kathryn Barber, who chairs the DMA Teleservices Council, said a survey was mailed to DMA members last week asking for input on proposed changes to the guidelines for the use of predictive dialers. She said she wanted to make sure the DMA had adequate feedback before it made any changes to the guidelines.

In his opening remarks at the conference, DMA President/CEO H. Robert Wientzen also called the use of predictive dialers a contentious issue.

“And it's not going away,” he said. “The [Federal Trade Commission] is asking a lot of questions about this.”

Some attendees said that in the past year, the DMA has taken a much more aggressive stance on the legislative issues that affect telephone marketers.

“Teleservices used to be the red-haired stepchild of the direct marketing industry,” said Thomas Caprio, president of Meyer Associates, St. Cloud, MN. “They've really been doing a lot more with teleservices legislation than they used to.”

He said this has been especially important since the American Teleservices Association had so many difficulties last year, when the board resigned amid a financial scandal. Although he belongs to both associations, he said he is in a “wait and see mode” to determine if the new management team at the ATA will be able to revive that group.

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