Do-Not-Call List a Success ... Even for Telemarketers

ByNils Kongshaug

Aug. 14, 2005 — -- Two years ago, Joe and Martha Russo, like many Americans, could not get through dinner without being interrupted by telemarketers.

Today, in their Maplewood, N.J., home, it's a different story.

"We have gone from two calls per dinner hour to absolutely no calls from telemarketers," says Joe. "It's an incredible relief."

That is the verdict of much of the nation. One survey by the Pew organization found 85 percent of Americans report getting fewer telemarketing calls, and 20 percent say they get none at all.

In 2003, Congress heard the chorus of angry complaints and overwhelmingly approved the National Do-Not-Call Registry. Response from the public was equally enthusiastic. It was estimated 60 million phone numbers would be registered. The figure today is 98 million; roughly half the households in the United States.

The telemarketing companies fought hard against the list, arguing it would mean the end of their industry and a loss of livelihood for thousands of workers.

In fact, says Tim Searcy of the American Teleservices Association, "The industry has been a lot more resilient than we originally expected."

Smart Reply in San Francisco is an example. It was founded just as the do-not-call list was taking effect. Its strategy was to call only the people who might actually like its pitch.

"We got into this business at a time when it seemed like everyone was panicking about if they would be surviving or not," says Eric Holmen, vice president of Smart Reply. The do-not-call legislation allows companies to call people who have done business with them in the past 18 months, even if they are on the list.

"At the same time everyone else was jumping off the ship, we found great success in just good communication," he says.

Smart Reply leaves recorded messages on answering machines where its research shows people are more tolerant of a sales pitch. It would rather not catch you at home. If it does, its machinery knows it, and sends out a shorter message.

"A lot of companies were not prepared for the do-not-call list," says Holmen. "I hope they took note. Because disruptive, intrusive calls … were not a good thing."

Not all of them did.

The Federal Trade Commission says compliance generally has been good. But it has gotten 900,000 complaints over these two years about businesses violating the list.

Because of limited resources, the FTC says it can investigate only when it gets multiple complaints about a single company. And only 12 companies so far have been fined. Those fines are large. At $11,000 per call, they have been in the hundreds of thousands of dollars.

But the telemarketing industry would like to see the government get even tougher.

"We are asking the federal government to do a better job of enforcing," says Searcy. "I want to remove from the marketplace anyone who is not abiding by the do-not-call list. Let's make sure that we have a level playing field for legitimate practitioners."

Five states have rules that are stronger than the national rule. Indiana, for example, does not allow companies to call recent customers. The telemarketing industry, along with a national bankers association, is now lobbying the federal government to make the national standard the only standard.

Indiana's attorney general, Steve Carter, says he will not allow Indiana's tougher do-not-call rule to be watered down.

"They want to make more calls," he says. "That's why they're spending money."

Americans outside those five states, however, are already looking beyond telemarketing calls to the next annoyance -- spam.

"Perhaps I'm being greedy," says Joe Russo, "but I would love to see it extended to spam. … About 40 percent of my e-mail currently is spam."

Holmen even predicts a do-not-spam list somewhere down the line.

But federal regulators admit e-mail is much harder to trace than phone calls, so don't hold your breath.

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