DSC Tech Library
Telemarketing Related Information
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The following is an article relating to the telemarketing industry including products and services in our business areas.
Are You Compliant with the Telephone Sales Rule
By Joan Mullen
Now that 2004 is behind us, we have been living with the revised TSR (Telephone Sales Rule) for more than a year. Has compliance affected your business? Is your call center in compliance with all of the components of the TSR? What about applicable state laws? This might be a good time to review the state of compliance for your call center specialists whether they work for in-house or service agencies. The TSR has several components that directly affect the call center industry. Here are the key components:
National Do Not Call Registry - Enforcement of the Do Not Call (DNC) law has had a significant effect on business in that it shrinks the universe of potential consumers to be called. Well over sixty million people signed up for it. For the most part, businesses got the message. Even so, there was a significant fee increase from:
The first five area codes are still free, which should help some call centers. As of January 1, 2005, we will be required to update our calling databases monthly.
- $25 to $40 per area code, or
- $7,375 to $11,000.00 annually (for the entire list).
In addition to the national list and various state fees, there are a few more lists that we need to use for scrubbing:
Predictive Dialers: If you use a predictive dialer, you must connect the call to a live representative within two seconds of the consumer’s completed greeting. If you don’t, the call is considered abandoned even if it’s answered by a live representative after the two seconds. You must meet Safe Harbor requirements for abandoned calls, which are:
- Wireless Block Identifier List: Lists all telephone numbers that either are or have been set aside for wireless service. It is updated monthly and costs $895 per year except for service agencies who are charged $2,195 per year; it is available through the Direct Marketing Association (DMA).
- Wireless Ported List: Updated weekly, this list reflects all numbers that have changed from landlines to wireless. It costs $895 per year and is also available through the DMA.
- Telephone Preference Service List (TPS): The DMA updates this monthly and offers it monthly or quarterly with a minimum cost of $700 per year. DMA members are required to subscribe to this list.
The FTC is considering a revision so that their Safe Harbor requirements are in concert with the FCC’s per month across all campaigns.
- Allow 15 seconds or four rings before disconnecting an unanswered call.
- Set abandoned rates not to exceed three percent per day per calling campaign – if your business is under the jurisdiction of the FTC; per month across all campaigns if the FCC has jurisdiction over your company.
- Play a pre-recorded message that includes the company name and telephone number. This message may not include a sales or marketing message but must state that the call is to sell goods or services and the nature of those goods and services.
- Retain appropriate records.
- The “call-back” number must be one for the consumer to request that his or her number be put on your company-specific DNC list.
Caller ID: The third “big” component of the revised TSR is “Caller ID.” Enforcement of Caller ID has uncovered many problems. Some of them are technological in nature, but most are due to a lack of understanding or an education deficit on the part of some marketers and most consumers. For example, consumers do not always understand the fact that calls listed on their Caller IDs are not completed calls. Also, they often do not understand the concept or meaning of Existing Business Relationships (EBR). Plus, marketers don’t seem to understand that even though the call isn’t completed, if it is listed too frequently on a Caller ID and the consumer complains there is a chance of harassment charges.
To be in compliance with the Caller ID component of the revised TSR, a marketer may not block Caller ID and must list a company name and telephone number that can be called by the consumer for company DNC requests. The callback number must be answered with the same company name as is listed on the Caller ID. It does not have to be a toll free number and it does not even have to be answered by a live agent. Record keeping is a requirement and is critical to verify compliance.
Reviewing the three major components of the revised TSR does not even begin to touch on disclosure and payment requirements or the various complexities of state laws relating to consumer calls and how these fit with federal regulations. The states do not like to be told what to do and definitely do not want to reduce or lose revenue. Therefore, they have been busy revising their existing state laws so that they are more stringent than federal regulations. Some of the more recent state issues that we need to be aware of include:
- Twenty-four states have registration laws but there are exemptions. You should consult legal counsel regarding your call center’s responsibilities and liabilities. For example, in Arizona, all companies that are exempt from registering must complete a limited registration.
- Michigan, Montana, New Jersey, New Mexico, Pennsylvania, and South Dakota all use the National DNC list but have stricter EBR (Existing Business Relationship) requirements than the FTC. The individual state requirement applies when calling intrastate.
- California uses the National DNC list and has revised part of their EBR exemption to be in concert with the federal exemption: 18 months as a customer but California does not recognize the three-month inquiry provision.
- Recently, Connecticut passed legislation to use the National DNC list instead of the DMA’s Telephone Preference Service. Hawaii and Idaho have passed laws implementing the National DNC list. Vermont now also uses the National DNC list.
- Indiana, Louisiana, Mississippi, Missouri, Tennessee, and Wisconsin use their own state DNC list and also have more restrictive EBR requirements, again applicable when calling intrastate.
- New Jersey and South Dakota both have DNC registration laws that include a state fee even though they both use the National DNC List.
- Alaska passed a law (HB 15) to use the Federal DNC list, but they continue to enforce their Black Dot laws. For Alaska, this can be cumbersome because the Black Dot laws relate to directories and even though Alaska isn’t the most populous state, they have several state directories. In addition, Alaska is now a “No Rebuttal” state.
- Massachusetts requires the name of the seller (client) and service bureau on a consumer sales or marketing call.
- In Nevada to qualify for the EBR exemption, consumers must be provided with an annual notice of how to put their number on the company specific DNC list as well as the Attorney General’s contact information.
- New York has raised the fine for violation of the DNC law to $11,000 per violation. Wisconsin continues to charge $75 per line (up to $20,000 per year) used to call into that state.
It is anticipated that states will look at inbound calls, Business-to-Business, elimination of established business relationship calls, and additional disclosure requirements for future telemarketing legislation.
If you need help, there are resources available for everything from systems support, DNC list subscriptions, compliance recommendations, audits, and/or scripting. Always consult your internal legal counsel regarding how legislation and regulations may affect your company.
Predictions for 2005:
Some of the areas where we can expect state attempts at regulation include:
Joan Mullen is the legislative chair of the DMA’s Teleservices Council’s Opcom and the Vice President of Special Projects and Industry Relations for ORC ProTel, Inc., a full service customer contact agency. She can be reached at 916-683-8153 or email@example.com.
- Business-to-business Do Not Call.
- Removal of exemptions for Not for Profit and Political calling.
- More stringent day and hours of calling regulations.
- More stringent EBR regulations.
- More disclosures especially for up-selling.
- Requirement of a signed contract for all sales.