Having some hangups, Will telemarketing survive the new regulations.

Controversy surrounds the world of telemarketing. In December 2002, the FTC passed the newly amended Telemarketing Sales Rule, or TSR, a series of guidelines and regulations regarding phone solicitation. The deadline to implement the TSR is October 1, 2003, and companies are busy trying to bring their operations up to speed.

What is the TSR?
The FTC developed the Telemarketing Sales Rule to help regulate the industry and to make sure the consumers were protected from illegal methods. The TSR has established certain rules that all telemarketers must follow:
  • National do-not-call list — Consumers can register to have their name placed on the national list, prohibiting telemarketers from calling them.

  • Caller ID requirement — All companies will be required to submit their caller information to the identification service provided by the phone companies.

  • Restrictions on unauthorized billing — Express consent must be obtained when the sales rep has the ability to charge the consumer's account without the account number.

  • A 3% abandonment rate — Automatic dialers must allow the consumer's phone to ring for at least 15 seconds before hanging up, and each call must be met with either a sales rep or recorded message.
What does this mean for telemarketers?
In order to meet the new regulations, each company will be required to purchase the national do-not-call list every three months in addition to upgrading their equipment for compliance. Companies found to be in violation of any of the rules will be fined up to $11,000 per day by the Federal Trade Commission. Some estimate the cost of upgrading can run into the hundreds of thousands of dollars, leaving smaller businesses unable to survive and larger businesses having to increase client prices.

With the TSR deadline looming, companies unsure of the future of telemarketing are turning to other avenues, such as direct mail, to get their messages across. Businesses are being reminded that the only way to truly ensure the success of their marketing program is by using a variety of channels to reach the consumer.
Reprinted from Strategies newsletter, 2nd Quarter © April 2003 by First Marketing, 3300 Gateway Drive, Pompano Beach, FL 33069.

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