If you sign up for the Do Not Call registry, you probably
think you've put a stop to telemarketing calls. Not necessarily.
Businesses can still phone if you are one of their
customers, whether you're on the list or not. (The government's
definition of a customer is anyone who has made a purchase or done
business with a company in the last 18 months or made an application
or inquiry within three months.) And your phone could be ringing
a little more often in the near future.
The Federal Trade Commission is currently reviewing
an application to allow companies to use pre-recorded messages for
telemarketing. Consumers unhappy about the proposed change have
until Jan. 10, 2005, to protest.
If a company "calls you now, it has to use a
live person," says Allen Hile, assistant director in the division
of marketing practice for the FTC. "If the change goes through,
the company can use a pre-recorded message."
With automated messages, telemarketing companies can
place a much greater volume of calls for much less money than they
can with live callers.
"This is an exemption that will allow [pre-recorded
telemarketing] to occur on a much larger basis," says Chris
Hoofnagle, associate director of the Electronic
Privacy Information Center, a nonprofit privacy research group.
Here's the skinny. Two federal agencies, the FTC and
the Federal Communications Commission, oversee the no-call list.
While both groups agree that businesses should be able to call current
customers (regardless of no-call list status), they disagree on
how that can be done.
The FCC allows pre-recorded calls. The FTC limits
pre-recorded messages to 3 percent of a company's total telemarketing
calls. When the FCC had the opportunity to bring its rules into
line with the more restrictive FTC last year, it declined. The agency
stated that it had no proof that its rules placed a burden on consumers,
Recently, a telemarketing company asked the FTC how
to comply with the seemingly contradictory policies of the two agencies.
The commission decided to treat the question as a request to match
its regulations to those of the FCC, according to documents posted
on the FTC
But one consumer group believes it's a move in the
wrong direction. "That's what's so bad," says Hoofnagle.
"An agency that's supposed to protect consumers is harmonizing
its regulation downward."
He also worries that consumers would get many more
calls as new companies jumped onto the automated bandwagon. "If
the exemption is created," Hoofnagle says, "it will cause
other people to move into the field."
What could change?
When it comes to reaching out and touching customers,
automated messages let businesses reach millions of people in a
fraction of the time and for a fraction of the money of a live caller.
With prerecorded messages, Voice Mail Broadcasting
Corp., the company petitioning for the FTC rule-change, makes 2.5
million to 3.5 million calls each day, according to company president
A prerecorded message costs about 5 cents, while a
live call runs about 60 cents, Crowe estimates. Delivering the volume
of outgoing calls that Voice Mail Broadcasting averages in a day
without prerecorded messages would require approximately 3,000 people,
he says. With an automated system and prerecorded messages, the
same work can be done with less than 100.