Will the EBR Exemption Survive?

Time in Washington has taught the American Teleservices Association that once a politician finds a winning issue, he or she will refuse to let it go.

Accordingly, teleservices remains a popular focus of regulatory and legislative discussion. Recent visits to our nation’s capital have provided the ATA with insight regarding a possible target for new efforts: the existing business relationship (EBR) exemption to the national do-not-call rules.

As everyone knows, teleservices suffered a substantial setback from the national DNC registry. The one area of hope for firms was the right to continue to contact their current customers, preserved under the EBR rules. Up to 18 months after the relationship has concluded, firms still can contact their customers to try to recapture them as active clients. The EBR often is cited as the one area that gives the teleservices channel continued value as an outbound source of revenue.

But the EBR exemption is receiving particular scrutiny now because of consumers’ confusion about their rights under the registry. As consumer DNC complaints are sifted and categorized by the Federal Trade Commission, many are found to be legitimate EBR calls and therefore not subject to DNC rules. This means that even though the call was made legitimately to a telephone number based on the business relationship, the household mistakenly lodged a complaint with the FTC.

The FTC takes complaints seriously and often spends a lot of time pursuing erroneous complaints. Time spent pursuing “false-positive” EBR complaints takes away valuable time from other, potentially more useful enforcement activities.

Where does this confusion come from? Most consumers simply are unaware that the DNC registry does not apply to many types of calls, including charitable solicitations, political calling and, perhaps most importantly for the industry, EBR.

Adding to the confusion is that even though one person may have an EBR with a company, other members of that person’s household who answer the phone may be unaware of the relationship.

Finally, many consumers are unaware of how easy it is to put themselves on a company-specific (or in-house) DNC list for each of their current business relationships.

What is the risk to the industry? If the EBR is deemed too confusing in its current form, several remedies exist for the FTC.

First, the FTC could invest in consumer-oriented education to assist the teleservices industry in clarifying the EBR rules for consumers. As helpful as this solution might be, it is unlikely the FTC will use its budget in such a manner.

Second, the FTC can reopen its rulemaking and reduce the time for which the EBR applies from the current 18 months to as little as no time at all. Managing the duration of the EBR would be easiest for the FTC, and based on the record, the most palatable option available to Congress.

Third, the FTC can reopen its rulemaking and redefine EBR itself to try to eliminate the confusion. Redefining EBR, however, likely would be worse for the industry. In essence, to redefine EBR in most people’s minds means to change the time frame.

Fourth, the FTC can point to the registry’s success and learn to live with the annoying issue of false-positive complaints. Though this is possible, disregarding consumer complaints is not something the FTC is likely to do.

Finally, the FTC can encourage industry to try to address this problem before it becomes too great to dismiss.

Though the FTC has not asked for our help in this matter, it makes sense for the industry to be proactive in trying to resolve the issue before the agency or Congress decides to tackle it.

One suggestion voiced recently in ATA meetings is to provide more information to the consumer in the opening of the call. In addition to disclosures already required by law, the caller would include the source of the existing relationship and, therefore, the legitimacy of the call. Though this would add to the handle time, any efforts to decrease complaints should be welcomed by industry.

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