(Do not) call sounds for telemarketing

By Mark Sneddon.

Key Points:
Under the possible model, all unsolicited telemarketing calls to registered phone numbers (with the exception of calls made by certain specified exempted organisations) would be prohibited.

Senator Helen Coonan, Minister for Communications, Information Technology and the Arts, released a discussion paper on a proposed model for a national Do Not Call register on 30 October 2005.

The discussion paper was prepared in response to public concerns over telemarketing calls, which have been seen by some as intrusive and annoying.

Both the US and the UK have set up Do Not Call registers, which give consumers the right to opt-out of telemarketing approaches. In the US, the Do Not Call register has proved very popular with consumers (there are over 100 million registered telephone numbers) and there have been studies showing that the US Do Not Call register has resulted in a significant reduction in unwanted calls to registered numbers.

The Office of the Federal Privacy Commissioner and the Senate Legal and Constitutional References Committee recommended in their recent reports (March 2005 and June 2005 respectively) that the Government consider a national Do Not Contact register which could allow people to express their preference not to be contacted by direct marketers by way of mail, email, telephone and SMS.

Do not call / Do not contact

The discussion paper proposes a possible model which applies to direct marketing by telephone (including mobile phone), but not to direct marketing by mail, door to door sale, email or facsimile.

The discussion paper states that national regulation is already in place to deal with other aspects of direct marketing. Direct mail is regulated by an independent code of practice established by the Distribution Standards Board. Unsolicited email and SMS messages are regulated under the Spam Act 2003. Since a review on whether the Spam Act should be extended to facsimile transmission is to be undertaken before April 2006, the discussion paper does not address the issue whether a Do Not Call register should apply to telemarketing by facsimile.

Opt-out / Opt-in

The possible model adopts an "opt-out" approach. An "opt-out" approach allows those who do not wish to receive telemarketing calls to register not to receive these calls. In contrast, an "opt-in" approach assumes that most consumers will not welcome direct marking approaches and allows those who wish to receive these approaches to register to do so.

The discussion paper considers that an "opt-in" approach would limit the telemarketing industry excessively without delivering commensurate benefits to consumers. An "opt-in" approach could be potentially disastrous for the local telemarketing industry. In addition, those consumers who do opt in are likely to receive more calls.

Registration of numbers

Under the possible model, individuals and small businesses (defined as businesses employing 20 or fewer people) could register their land and mobile phone lines on a Do Not Call register. Subscribers could register phone numbers on behalf of minors and be authorised to register numbers on behalf of other persons. Phone numbers could be removed from a register only at the request of subscribers. There would be no time limit on registration of phone numbers.

Types of calls prohibited

Under the possible model, all unsolicited telemarketing calls to registered phone numbers (with the exception of calls made by certain specified exempted organisations) would be prohibited. Also prohibited would be silent calls to registered numbers resulting from automated dialling equipment dialling more numbers than there are operators to handle calls and recorded message calls for the purposes of telemarketing.

Dual purpose calls purporting not to be telemarketing calls would be prohibited if they have a telemarketing purpose.

Offshore initiated telemarketing calls would be prohibited if the calls have an Australian link similar to that operating under the Spam Act. For example, if the organisation which authorised the telemarketing call (such as the seller of the product being telemarketed) has its central management and control in Australia, the telemarketing call would be prohibited.

Exemptions

Some or all of the following individuals and organisations might be exempted from the prohibition on calling numbers listed on a Do Not Call register:

• an individual or organisation with which the person on the Do Not Call register has an established business relationship (a possible definition is that the person has purchased a product in the preceding 12 months);
• charities;
• religious organisations;
• educational institutions (limited exemption for students and alumni);
• government bodies;
• registered political parties and registered political candidates; and
• market researchers undertaking social research (not including research which is conducted in conjunction with any form of sales campaign or which has any sales component).

Administration, enforcement and funding

The Australian Communications and Media Authority would administer any Do Not Call register and be responsible for the enforcement of the legislation relating to a Do Not Call register.

Funding to administer a Do Not Call register would be obtained through the imposition of subscription fees on telemarketers to access the register. Individuals or small businesses would not be required to pay fees to list their numbers.

To deal with the problem of fly-by-night telemarketers and offshore telemarketers, the Discussion Paper suggests that Australian companies engaging telemarketers to solicit sales on their behalf could be required to comply with Do Not Call legislation (presumably by ensuring contractually that the telemarketers comply with the legislation or perhaps by having a secondary liability for the telemarketers' breaches).