FCC regulations toughen telemarketing business

Folio: The Magazine for Magazine Management, Dec 1, 1992 by Lambeth Hochwald

Ever since Congress passed the Telephone Consumer Protection Act a year ago, intending to shield consumers from unwanted telephone solicitations, telemarketers and publishers have awaited the bill's impact on their day-to-day operations. In mid-October, the wait was over when the Federal Communications Commission issued its 16-point ruling to enforce the congressional act. Although amendments are under consideration, the proposals will become law at the end of this month.

The biggest impact on publishers, it seems, will be the mandated maintenance of lists of consumers who have asked not to be called--appropriately known as "do-not-call" lists. Each company will be required to have a written policy on maintaining these lists, to obtain a consumer's consent to forward or share a telephone number with a party other than a telemarketer, and to place that consumer's name on the do-not-call lists of any affiliate company or division of the telemarketer.

Other points in the FCC's ruling will regulate the use of auto-dialing systems and facsimile machines, and will also narrow the allowed calling hours to between 8 a.m. and 9 p.m. Although telemarketing companies may or may not comply with the FCC rules, the bottom-line responsibility falls to the publishers to see that their telemarketer brokers conform.

The FCC's ruling will enable consumers to sue publishers whose telemarketers contact them after they have asked not to be called. The fine would be up to $500 per offense.

Although some telemarketers rushed to petition the FCC for changes, other telemarketers and magazine professionals applauded the guidelines, saying the ruling will force businesses to "clean up their telephone act," according to Alan Bayersdorfer, subscription manager of Rodale's American Woodworker.

Some publishing professionals say the ruling only codifies their own house rules about not annoying consumers with excessive calling, especially with offers for several products from a multitude of telemarketing vendors.

Bayersdorfer says the policy of the Emmaus, Pennsylvania-based publisher is to consider a no-call request for one product equivalent to a no-call request for any product, company-wide.

"The new regulations have forced us to look more carefully at telemarketing and make it better," he says. "It will be our responsibility to collect and merge the no-calls from the half-dozen vendors we work with. Rodale makes no bones that it's an aggressive marketer, but issues of privacy are key. We have no interest in going into people's houses who don't want us there--we wouldn't make any money doing it anyway."

Susan Caughman, vice president of consumer marketing for Time Inc., agrees. "Telemarketing works well for us and it's a good, reliable source of business," she says. "But if we annoy people, it won't be. The FCC ruling is a wise one, giving us the impetus to go back to our telemarketing vendors to find out how they define no-calls. We have work to do to get a consistent definition of who we can call and who we can't."

Caughman also says Time Inc. is planning to establish a cross-company frequency monitor to make sure that the same consumers aren't being called too often with solicitations for books, magazines and other products.

"We want to know how frequently how many of our customers who do want to be called are called," she says. "We have no long-term interest in annoying renewals, either."

The heaviest burden of all, however, will fall on smaller, non-automated firms as they grapple with the expense of maintaining accurate, up-to-date do-not-call lists, says Gary Cohen, president of ACI Telemarketing in Minneapolis. He adds that even though the legislation leaves unanswered questions, such as who will manage and pay for a database of names when more than one product is being marketed, or more than one telemarketing vendor is used, it spells opportunity for those firms that can easily weed out unfriendly names for their publishing clients.

"Some vendors might still risk calling people they shouldn't," says Cohen. "But, ultimately, the publisher still has to take responsibility for getting accurate do-not-call lists, and they may not choose telemarketing firms that can't provide that for them."

Peg Kuman, president of The Power Line, the outbound telephone sales and marketing division of Publishers Clearing House, says she met with her clients immediately to discuss the impact of the ruling. "Most of our clients are in compliance with the law already," Kuman says. "We just have to crisp it up. I'm very pleased that we were able to make the statute commerce-tolerable, and that we can continue to do business without placing an unfair burden on us and our customer."