In a rare turnabout, the US has followed the UK in introducing a national preference service for those not wishing to receive cold calls. The American telemarketing industry is reeling from the consequences.
Who: The Federal Trade Commission and the Federal Communications Commission
When: June 2003
Following the example of the UK's statutory "Telephone Preference Service", the US has just introduced its own equivalent.
Here in the UK, it is now a legal requirement that all those contemplating telephone marketing must first of all check their number list against a central list of all those who do not wish to receive marketing cold calls. This is kept by the Direct Marketing Authority. So far, over three million UK residents have registered not to receive such calls.
In the US, moves in this direction on a national, as opposed to state by state basis started at the end of 2002, and on 27 June 2003, US residents were able to register on a national list for the very first time. Once the rules come fully into force on 1 October 2003, it will be an offence to telephone for marketing purposes any individual who has registered on the list.
As of 27 June 2003, however, there were coverage gaps. These meant the new regime did not extend to telemarketing by banks, insurance companies, phone companies and airlines. However, within a matter of days, this gap was filled by the Federal Communications Commission, whose jurisdiction extends to these sectors because of its inter-state powers. By releasing its own version of the do not call list rule on 3 July, the FCC set the stage for virtually blanket do not call list coverage with effect from 1 October.
The effect of these developments has been spectacular. In the first week alone, no less than 16.9 million Americans registered on the list. With registrations continuing at the rate of 158 a second, the FTC, which has overall responsibility for the initiative, is predicting that by the end of 2003 no fewer than 60 million US residents will have registered.
Why this matters:
There are some small chinks of light for US telemarketers. For instance, consumers requesting information from a company can be cold-called for three months, and even if they are on the do not call list, consumers with "existing business relationships" with a marketer (defined as those who have bought, received or paid for something from the marketer within the past 18 months) can also be called.
Consumers who bought on instalment plans can also be contacted up to 18 months after the last payment. Taking advantage of these loopholes, sweepstakes marketers, for instance are already including in their competition rules a request for information by participants. By and large, however, this is clearly going to have a massive effect on the US telemarketing industry, with pundits predicting that much of the $28.4 billion currently spent on telemarketing to consumers will now be flowing into advertising, direct mail and sales promotion.