The Hindu Business Line : To call or not to call

IT IS not easy to get consumers to unite. Non-violent boycotts and protests are few and far between when it comes to consumer products. Even when there is a group of activists not afraid to tear down posters or resort to arson, there will always be enough of a number quite happy to consume products of an alien culture, or footwear that is made in sweatshops. They either do not care, or believe that their small amount of purchase does not make a difference either way.

But when it comes to getting unwanted phone calls from telemarketing firms, consumers in the US have shown rare determination to fight back. Telemarketing firms specialise in making random calls to people to convince them to buy their product.

All this is ok if you do not have other access to information or if you are a lonely person sitting on the porch with nothing to do and aching to hear a cheery voice from a total stranger who calls you by your first name as though he or she has known you for ages. But if you are a normal human being just back from a long day at work and hurrying to get dinner organised, the last thing you want is ``an offer you cannot refuse". However, years of upbringing and education prevents you from breaking into choice invective and you politely struggle to end the conversation.

So, the Federal Trades Commission in the US, after receiving several complaints, decided to institute a `Do not call' registry. You could call or get to a widely publicised Web site and register your home number as one where you do not wish to receive unsolicited calls. The registry was to take effect October 1 and owners of about 50 million phones (out of about 166 million residential phones in the country) had put their name down with visions of peace in the evenings. This registry was to be updated quarterly. Telemarketers who called someone listed on the directory would be fined up to $11,000 (Rs 5.20 lakh) per violation. The directory was to be administered by AT&T.

But is was not to be. The American Teleservices and Direct Marketing Association, the trade association, believes that this issue is one of "free speech" which is protected by the constitution. That is, they are pretending that while they are free to speak, you should be forced to listen. In any event, they filed a lawsuit challenging the rules. They won a stay from a federal court. Following a wave of public outrage, the Congress (that is, the two houses of parliament in the US) drafted and passed legislation supporting such a list, all within 24 hours, setting some kind of a record in US legislative history! Although this overcomes the problem that the FTC was not authorised by Congress to compile such a list, the issue of free speech is a constitutional issue and you can be sure this will bounce around the courts for some more time. The industry is also trying to pressurise the elected representatives saying that employment in their industry could fall by one-third if such a list is enforced.

The original scheme of the FTC had built-in several safeguards (loopholes?) that they believed would not seriously disrupt those who had an on-going `relationship.' Politicians, pollsters, and philanthropic organisations are not bound by this list. Also, if you have an existing business relationship with an organisation, then they have the right to cold-call you for 18 months after that.

For many years, many marketing agencies started compiling lists of people to call by offering baits. For example, you would find a box at your local store announcing a free raffle of a car or such enticement. No purchase necessary, all you would have to do is to fill in your name, address, and phone number. The date of the draw would be in fine print and far, far into the future. (Yes, quite often, there is really a draw.) The whole idea is to compile lists of addresses and phone numbers. Once an agency has developed a list, not only can it call people, but the list also becomes a source of revenue in and of itself, since they can sell the list to other telemarketers! A majority of telemarketers today just buy such lists without bothering compilation in the first place. Moreover, with equipment that randomly dials numbers and connects you to a potential sucker, it is easy to jump into this business.

Let us speculate on what is likely to happen if a `do not call' list goes into effect. Initially, the telemarketers should be pleased that those who were rude or did not agree to purchase the product or service have self-selected themselves out.

Thus, theoretically, telemarketers yield rates should improve. But slowly, as those who are not on the list get inundated with calls (fewer people, and so they will get called more), more will get onto the list.

Therefore, this is really an end game for them and they are fighting hard. Apart from the federal effort, 40 out of the 50 states in the country are compiling their own do-not-call lists that is not affected by the recent court ruling.

At an individual level, there are other ways to protect oneself. One can use `caller identification' equipment to identify the number of the person calling before answering the phone. If the caller gets another equipment to block display of his phone number, you can subscribe to a service offered by some of the phone companies that would intercept and eliminate calls from unidentified numbers.

Thus, the phone companies are sitting pretty. They either get revenue from the telemarketers or those not wanting to be bothered! Another equipment is available to recognize when an in-coming call is from an automatic dialer. It then releases a signal that makes the calling equipment think the line has been disconnected and to delete the number from the list. It is amazing how innovation also plays the cat-and-mouse game!

We are already inundated by spam e-mail, often offering products and services that can cause severe embarrassment. We get unwanted mail through the postal service, and there is some government complicity in this since they provide discounted rates for bulk mail that is pre-sorted by postal zones. No wonder telemarketers feel particularly discriminated when the government steps in to prevent them from harassing the public.

(The author is a professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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