The Great Telemarketing Lie

How does the telemarketing industry defend its practices when there is the possibility of legislation to restrict its activities? They depend on industry advocacy groups like the Direct Marketing Association (DMA) and the American Teleservices Association (ATA) as well as lobbyists from private concerns. What happens when a legislative body (usually a state legislature) looks at a bill involving the industry is that they are barraged by what we call "The Great Telemarketing Lie." Often members of the media are given the same line.

Here's how it works. The industry advocacy groups or lobbyists will make a statement something like this:

We wish to point out that the telemarketing industry employs 25,000 people in this state. Last year, consumers bought 5.3 million dollars from telemarketers here in our state. This bill would impact many jobs and tax dollars. Also, there are adequate Federal regulations in place (the over-regulation argument.)

So what is the lie? It seems that the industry defines "telemarketing" differently than the general public (kind of like how Clinton defines "sex"). According to the industry, there are actually two kinds of telemarketers, "inbound" and "outbound." An "inbound telemarketer" is a person who works in a call center and answers incoming calls (usually generated by an advertisement) and sells a product or service to the callers. An "outbound telemarketer" is the person who calls us at home (usually at dinner) to attempt to sell us products or services.

Clearly legislation proposed by most states would not affect the "inbound telemarketer", but in pleading their case, the industry lumps both "inbound" and "outbound" telemarketers together, thus inflating their figures. It is amazing how many government officials are fooled by this simple scheme. When industry advocacy groups are asked to provide the information on "outbound telemarketing" only, the information is usually "unavailable."

Just how protective is the industry regarding the figures? Recently C.A.T.S. founder Robert Arkow contacted an inbound and outbound telemarketing firm called APAC Teleservices in Deerfield, Illinois. Noting that APAC's stock had fallen from a high around 50 to a low of 5 points, he perceived it might be a good investment as an undervalued stock. Arkow noted that APAC had just signed a contract with the Los Angeles Times to handle their inbound calls, and was curious if they were going to stray away from the outbound telemarketing business and concentrate on the inbound telemarketing business. But when Arkow contacted APAC investor relations and asked, "What percent of your business is inbound and what percent of your business is outbound?", the answer was: "That information is unavailable." This information was also not available in the investor information package APAC sent to Arkow.

The industry is trying to hide its motives. Recently the American Telemarketing Association changed its name to the "American Teleservices Association." Telemarketing Magazine became "Call Center Solutions Magazine." And APAC dropped the word "teleservices" from its name, becoming "APAC Customer Services." There must be a reason they are changing their names. Could it be that most people hate the annoying calls?

The "Adequate Federal regulations in place" argument is totally flawed. The industry knows that the FCC has never fined a telemarketer despite the fact that the laws are widely ignored. In 1998, Teleprofessional Magazine ran a test to see how the industry complied with the regulation that a company provide a copy of its "Do Not Call" policy upon demand. Quoting Teleprofessional Magazine: "...we sent out letters (from a third party) to a more or less random sample of 48 service agencies requesting copies of their 'Do Not Call' policies...After over 3 months, only 17 agencies have responded!" Simply put, the Federal regulations are a total failure due to lack of enforcement. If you want a copy of the article, contact Teleprofessional Magazine and ask for a copy of the June 1998 issue.

Don't be fooled by "The Great Telemarketing Lie." Warn your state legislators, media memebers and others about the deceptive practices of the industry and challenge the figures and information provided by them. The truth shall set you free.