Monday, August 6, 2007

The High Cost of Do-Not-Call

DM News reports on a recent meeting between the Direct Marketing Association (DMA) and the Federal Trade Commission (FTC). As you probably know, the FTC enlisted the help of AT&T in 2003 to build the Do-Not-Call Database -- a massive effort to allow consumers to register their phone numbers so they could stop the flow of telemarketing sales calls to their home telephones. Once registered, telemarketers who do not have an existing relationship (or aren't politicians or non-profit organizations) can no longer interrupt your dinner hour to ask you to buy their wares.

While many direct marketers argue that this was a good thing due to the fact that those who put their names on the registry were probably not going to buy from you anyway, businesses who primarily used telemarketing to reach their prospects had to find new ways to reach all those folks on the DNC list. After all, a prospect is a prospect, right? We would argue that this might have helped launch more multi-channel marketing strategies with those who were hesitant to try any other channel than telemarketing. There's that silver lining, right?

What we didn't see coming was the huge cost increases of actually using (like all good direct marketers should) the DNC database. The article reports that since the DNC registry was set up in October 2003, fees that telemarketers have had to pay to use it have increased by an astounding 263%! The DMA is introducing a bill to help control these costs. “The bill creates a more permanent solution so telemarketers can plan ahead, and it eliminates the requirement for the FTC to have to go through fee rule-making every year, as it suggests growth in fees should be based on inflation, with no authorization necessary,” Jerry Cerasale (Sr. VP of Government Affairs at the DMA) told DM News.

The article states that "when the registry was under development in 2002, the Federal Trade Commission proposed to cap the maximum annual fee per telemarketer to obtain access to the entire registry at $3,000. However, by the time the commission made the registry available in 2003, the cost for access was set at $7,375. Less than a year later, the FTC increased fees to $11,000. In 2005, the fees increased to $15,400, and in 2006 to $17,050." Well -- that sounds like a bit more than just inflation, doesn't it?

And, in spite of all of the cost increases, there are many who say the list is less than accurate. Unbelievable!

Luckily for us, the DMA has made this bill a priority and by bringing attention to the accuracy issues, hopefully, the FTC will put data cleansing practices in place that will ensure that direct marketers get a clean list for the dollars that they are spending to ensure that they are in compliance with the Federal Do-Not-Call laws. Here's the thing, if it can cost up to $11,000 per occurance for not complying, than the FTC darn well better make certain that the data is pristinely clean!

Stay tuned -- we'll definitely be keeping our eye out on this one and reporting any updates as they occur.

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