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Hanging On After the Big Hang-Up

Though millions have signed up for a national do-not-call registry, telemarketers are confident they'll be able to stay on the line.

August 17, 2003|David Streitfeld | Times Staff Writer

Telemarketers are an optimistic sort. They're quite certain they can call you up, drag you away from whatever you were doing and sell you something you didn't know you wanted.

So maybe it's not surprising that many say they're not worried about a new law that will fine them as much as $11,000 each time they call someone listed on a federal do-not-call registry.

Some telemarketers almost give the impression that the National Do Not Call Registry, which goes into effect Oct. 1 and so far has 31.6 million phone numbers, was their idea. They say it will greatly simplify their operations by drawing a bright line between those who don't want to be called and all the others -- who, the telemarketers will assume, are downright eager to talk.

"The individuals left are more of a targeted, receptive population," said Alan Elias, a spokesman for Providian Financial Corp., a San Francisco credit card company.

Other major telemarketers say they support the registry because they believe in consumers' right to be left alone.

"This is quite in line with AT&T's long-standing policy of protecting the privacy of its customers," said Tom Hopkins, a spokesman for AT&T Corp., one of the nation's largest telemarketers.

If the industry seems cool and unconcerned, its lobbyists are close to panic. The American Teleservices and Direct Marketing associations have filed lawsuits to stop the registry, which they say is a violation of free speech.

They also say the registry will ruin the industry, in turn delivering a body blow to the wobbly national economy.

"It will be like an asteroid hitting the Earth," said ATA Executive Director Tim Searcy. "Two million people will lose their jobs."

Which group is right will begin to come clear this fall. Federal Trade Commission officials originally predicted that consumers would put 60 million phone numbers on the registry in the first year. They say registrations -- which can be done on the Web at www.donotcall.gov or by calling (888) 382-1222 -- are exceeding expectations. There are 166 million residential phones in the U.S.

Telemarketers will pay to access the registry, which will be updated quarterly. Only politicians, pollsters and charities will be exempt and able to continue to make calls with impunity. Also permitted will be calls to consumers with whom the telemarketer has an existing "relationship." But even here there are limits.

"Telemarketers can't sell another product or service that is completely unrelated," said Eileen Harrington, the FTC's associate director of marketing practices. "If I'm your phone company, I can't sell you a time share."

In coming weeks, households can expect to be deluged with phone solicitations as telemarketers try to establish relationships before the registry goes into effect. The FTC already is getting reports that telemarketing call volume has soared. And after Oct. 1, those who haven't signed up for the registry can expect a flood of calls as marketers zero in on them.

Consumers must sign up by Aug. 31 to be on the registry by Oct. 1. Those who sign up thereafter will have to wait three months before their numbers appear on the registry.

Harrington declined to say how she thought the law might affect the telemarketing industry. The lobbying groups say about 4 million people work in telephone sales, calling consumers or businesses with offers for products such as newspapers, magazines, mortgage refinancings, stocks, insurance and long-distance phone service. Some salespeople work directly for the company that makes the product or provides the service being touted. Others are employed by independent call centers hired by contract.

"The impact on jobs wasn't the primary consideration here," Harrington said. "It was consumer privacy."

Attention Getter

Telemarketing first took root in the 1970s. Hiring people to work the phones was cheaper than sending out door-to-door salespeople or mass mailings or buying television time.

"It's highly cost effective," said Michael Snavely, a vice president with Bankers Life & Casualty, a Chicago insurance company. "It's easy to make adjustments on the fly -- you can change something and be up and running again the next day. You can't do that with TV ads."

And a ringing telephone, of course, is much harder to ignore than a TV pitch.

"It's a great way to get people's attention," Snavely said.

The first telemarketers either bought numbers from list brokers or simply dialed sequentially, hoping someone would answer so they could start their spiel. Though some early telemarketers were perfectly polite and straightforward, others weren't. And the unpleasant callers weren't necessarily just from the fly-by-night outfits.

"A lot of Fortune 500 companies have engaged in aggressive and unwise telemarketing practices," the FTC's Harrington said.

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