A recent DTI proposal to introduce a statutory right for corporations to opt-out of B2B cold calling has not gone down well with marketers. We summarise the Direct Marketing Association’s submissions to the DTI on the proposal.
Who: The Direct Marketing Association
When: June 2003
Britain's largest marketing industry body, the Direct Marketing Association, made its submissions to the DTI in response to the government's proposals for new regulations to implement the EU Privacy and Electronic Communications Directive.
Although this Directive and the proposed UK regulations (due to come into force on 31 October 2003) focus mainly on digital marketing, there are provisions which impact on telemarketing. In this report we focus on the DMA's submissions to the government on one particular proposal in the DTI consultation document. The proposal in question is a suggestion that corporate subscribers to telecommunications services should have the right to opt-out of receiving cold calls for marketing purposes. The proposal is that they should be able to do this either by registering with the statutory Telephone Preference Service or opting out on a case by case basis by communicating with companies that would otherwise contemplate cold calling them.
Strangely enough, this particular proposal by the DTI does not come from the EU Directive. It is simply an option that the DTI has suddenly fixed on, in part, it seems, because corporate subscribers already have opt-out rights in relation to fax marketing and it seems to be felt logical to extend this to telephone marketing. Another driver appears to be complaints from small shops, where staff find that they have to leave customers to answer direct marketing calls which are of no relevance to their own business activity.
However, the DTI is not absolutely committed to the proposal. It invites comments. It also accepts in the consultation document that any new restrictions on B2B marketing would undoubtedly carry a cost, especially for new entrants trying to build up a client base. This would be particularly true, the document goes on, where opt-in consent is required for other forms of marketing.
In its comments on this proposal, the DMA makes strong submissions in opposition.
One of its concerns is that it would put UK business at a disadvantage. By this it means that a business located in another EU member state could carry out a tele marketing campaign to businesses in the UK without having to check the numbers to be called against the TPS list. A UK business on the other hand would have to do so.
Another concern is the impact on the ability of businesses to keep their data lists up to date. They have to do this under the fourth principle of the Data Protection Act 1998. Currently this is done in many cases by making telephone calls to validate, correct or remove inaccurate names and addresses. If under the new regulations, the intended recipient of such calls is registered with the TPS, this way of maintaining up to date lists will be blocked and they will have to resort to the post.
Another concern is the disproportionate effect which any such regulation would have on SMEs. A recent DMA survey revealed that 20% of SME's used telephone marketing to drive sales and marketing opportunities to other businesses. In addition, there will be the increased costs to UK businesses in having to clean their lists against the Telephone Preference Service files.
On top of this, the DMA highlights a number of practical problems with implementation. For example, who is entitled to register a company on the TPS? One individual could potentially cut off a company as large as IBM from receiving all direct marketing telephone calls. Another difficulty is the question of which telephone numbers of a company the TPS registration will cover. Will it be the switchboard plus all direct dial numbers, freephone and national call rate numbers? And what about branch offices and other company sites? If it is to be registration by particular numbers, if an individual calling a company asks to be put through to a different branch, will the switchboard have to put the caller on hold for however long it takes to check that number against the TPS?
Why this matters:
It has to be said that legally, one particular alleged disadvantage of corporate subscriber TPS registration is illusory rather than real. This is the supposed problem for B2B marketers telephoning companies to seek opt-in consent for other forms of marketing which require opt-in. Some have suggested that the government's proposal would be a particularly mean trick if, by the same set of regulations, they were introducing a largely opt-in regime for direct marketing by e-mail.
As a matter of law, this is not such a strong point. This is because, as reported elsewhere on marketinglaw.co.uk, the new "opt-in/soft opt-in" regime does not look as though it will apply to a lot of B2B email. However, so far as self regulatory codes are concerned, the DMA still has a point. This is because the CAP Code enforced by the Advertising Standards Authority, which covers UK marketing email, has recently been amended to require opt in/soft opt in for all marketing email, B2C as well as B2B. So a quick phone call B2B to get opt in consent to send emails would have looked a very attractive tactic if it hadn’t been for proposed B2B telemarketing TPS.