Q: Should government protect your dinner hour from annoying telemarketers?
Posted Feb. 28, 2003 by Robert Bulmash - President: Private Citizen, Inc
Yes: A house is not a home when surveyors and telemarketers call.
To those who complain that a myriad of state and federal do-not-call lists will play havoc with the telemarketing industry, I say, "Cry me a river." Had it not been for your frantic and successful lobbying in 1991-92, when Congress and the Federal Communications Commission (FCC) were drafting the Telephone Consumer Protection Act (TCPA), a single national do-not-call list likely would exist now to obviate the current rush of legislation. The Direct Marketing Association (DMA) may remember its former chief executive officer, Jonah Gitlitz, saying, "The goal of the DMA is to discover and to thwart possible government regulation, and we have done it'' (DM News, Oct. 22, 1990). The American Telemarketing Association likely glowed as Mac Hansbrough, its former president, declared, "We have modified to our benefit or helped to defeat every piece of federal telemarketing legislation that has been introduced" (Teleprofessional Magazine, Jan. 1, 1994). Well, good for you! Now you're soaking in it.
Like a front door leading to the public way, a telephone is not an invitation to peddlers for use as an entry point. And when a sign is posted that says "No Trespassing,'' peddlers of ideas or products are prohibited from calling upon the resident therein. Those "outsiders" have a rainbow of means to contact us. Yet we have only one sanctuary, one place to enjoy our fundamental right to be left alone, free of those we wish to avoid. If that right does not exist at home it does not exist anywhere.
Currently the only federal "do-not-call" mechanism is the TCPA, which enables residents to limit only sales-solicitation calls, requiring that each such firm be given a resident's do-not-call request. And it has loopholes big enough for boiler rooms. With the Federal Trade Commission (FTC) amending its Telemarketing Sales Rule (TSR), it soon will roll out a national do-not-call list that will be of some value. While the FTC does not have jurisdiction over intrastate calls, banks, telephone companies and insurance firms, the FCC does, and it likely will establish its own national do-not-call list to harmonize with the FTC's and the 30 or so state lists now in effect. Following the FTC's lead, the FCC may enable residents to notify specific for-profit firms soliciting on behalf of nonprofits not to call. And it may ask Congress for additional powers to enable residents to restrict all types of solicitation calls.
Upon the release of the FTC's amended TSR on Jan. 29, 2002, FTC Commissioner Orson Swindle issued a statement that read in part: "From the perspective of consumers, the right to be left alone is invaded just as much by unwanted calls from exempt entities (e.g., banks, telephone companies or political fund-raisers) as it is by such calls from covered entities. Therefore, I believe that the entire spectrum of entities that make telemarketing calls to consumers should be subject to do-not-call requirements.''
That same day, in an effort to protect its residential telemarketing members, the DMA filed a lawsuit in U.S. District Court in Oklahoma City challenging the FTC's establishment of its do-not-call registry and other aspects of the amended TSR. In an effort to derail the FTC's do-not-call registry the DMA claims that the registry violates First Amendment free-speech rights -- that in creating the list the FTC exceeded its statutory authority and that government efforts may be duplicated if the FCC creates a do-not-call list as well.
Since 1980 federal courts have allowed restrictions on commercial speech under certain circumstances. The FTC can regulate abusive calls and since telemarketing calls are abusive to privacy, the FCC has regulatory authority. As for the duplication issue, that's up to the courts. But the net result of the lawsuit may be to delay the implementation of the FTC list.
Time magazine conducted an informal online survey asking visitors to rank the 100 worst ideas of the 20th century. With nearly a quarter-million responses, telemarketing ranked as the century's fourth-worst. Even Telemarketing Magazine (March 1991) featured a national survey that found 70 percent of residents considered telemarketing to be an invasion of privacy.
Yet a recent DMA press release states: "In 2001, consumers purchased $297 billion worth of goods and services via outbound telephone solicitations.'' Hmm. With 104 million households in the nation, that averages to $2,846 spent per household. One may wonder from whence the DMA pulls its numbers. As for the DMA's claim of 2.5 million employed in "consumer" telemarketing, with a turnover rate of about 200 percent it is less of a career than a means of receiving repeated insults from those they call.
Residents try to avoid junk calls by employing unlisted numbers, caller ID, unknown-caller-intercept services, answering machines, do-not-call lists and various devices. In response, the telemarketing industry has 1) fled its own name, 2) adopted a mantra and 3) fought back with an awesome technology. A close look at the industry's response underscores the need for a federal no-call list:
Most abandonment rates are set from 5 percent to 40 percent. At an FTC hearing, this writer learned of one political telemarketing outfit that set it at 75 percent. The higher the rate, the more folks answer "dead-air" calls that, in turn, lowers the cost per pitch. Nice, huh? If a prankster did this he could be arrested.
But wait, there's more. Because more than 70 percent of residents have answering machines, PDs attempt to discern when a "person" answers the phone. PDs err about 10 percent of the time, mistaking you for an answering machine, hanging up and calling back until you answer the way telemarketers want you to: a quick "Hello'' in a quiet room. Even then a PD may hold your line open after your "hello," while it analyzes your greeting. This may take as long as 4 seconds. If you hang up before that, the PD will call back until a pitch can be initiated.
Since the U.S. Constitution protects noncommercial speech to a greater extent than commercial (sales) speech, nonprofit, survey and political calls have to date escaped effective regulation. But the issue is our right to be left alone at home by unknown "outsiders." Why should any unwanted speech be tolerated? After all, it is the resident's forum, not the speaker's. And residents should determine who may knock on their doors or call their phones.
Telemarketing-research firms commonly random dial and speak to 75 or more residents before finding one who matches the profile for that survey and is willing to participate. Survey firms would be more productive and less offensive working at a table in a mall.
Most fund-raising calls are made by for-profit firms on behalf of charities. This year the U.S. Supreme Court will hear a case asking if such firms may solicit donations when only a small percentage will go to fund the programs for which the donations were given. On average, less than 33 percent of what is collected in this way actually gets to that charity. At times it is $0. To truly help a favorite charity, donations should be made directly to that charity's office.
Last year President George W. Bush's prerecorded voice was heard on millions of phones asking residents to vote Republican. Though the TCPA requires such messages to include the address or phone number of the principal, neither was included. If the president can't follow telemarketing laws, why should any entity be expected to respect them as they now are written?
We need a stiffer, more comprehensive and effective telemarketing law, one that allows residents to sue violators for an amount large enough to prevent others from violating it. As Lord Halifax said, "Men are not hanged for stealing horses, but that horses may not be stolen." Depending on one's view, abusive lawsuits may have resulted in warnings on coffee cups or the impeachment of a president. But there is nothing fanciful about privacy.
The FTC plans to include on the no-call list all residents placing themselves on their state's do-not-call list. The FCC likely will follow suit. In the end, there may be one master do-not-call list as the FTC and FCC work to achieve a common goal. One may hope that the more strident aspects of each list will prevail.
Bulmash is president of Private Citizen Inc., a pro-privacy membership organization based in Naperville, Ill., working to limit the abusive practices of the direct-marketing industry. He is commonly asked to assist state / federal bodies in formulating telemarketing legislation and regulation.