Telemarketing and Privacy
The original Data Protection Act of 1984 was largely created to address the frustrations of people faced with mountains of direct mail addressed to a deceased loved one. Up until that point no-one had any right to prevent anyone marketing to them in any way they saw fit. Back then telemarketing was in its infancy - largely because of call costs. But things change. Ten years later and consumer telemarketing had become a huge industry – anyone with a phone would get calls from people selling double-glazing and new kitchens. The unwarranted invasion of privacy became so bad that the Direct Marketing Association, under pressure, introduced the "Telephone Preference Service" – or TPS in 1994. TPS is simply a database of those who do not wish to receive unsolicited telemarketing calls.
1994 was also the year in which the EU privacy Directive was issued – for the first time recognising that all EU citizens have rights over the ways in which their personal data is used and, critically, the right to prevent direct marketing in any form. From 1994 to 1998 the DMA fought a lengthy battle to persuade legislators that "opt-out" was all that was needed, that provided people could stop marketing after the event then this was fine. And, up until 2000, they were right. By 2000 barely 1 million people were sufficiently concerned about their data rights and privacy to have registered with TPS. And in October 2000 the Data Protection Act 1998 finally gained the force of law. All over the country worried Direct marketers scrambled to unravel the legislation to work out what it meant for their activities, only to find after spending thousands with consultants and lawyers that the answer was, er, nothing. Not because they didn't need to do anything to comply but because the Information Commissioner wasn't interested in stamping out poor/illegal marketing activities.
2003 was an interesting year – two things happened – the Electronic Communications regulations were passed and TPS registrations hit 5 million. For now, consumers were being hit by not just double-glazers and kitchen fitters, there were conservatories, insurance, energy suppliers, cable companies, phone companies, holiday villas, prize competitions – a veritable Babel of telephonic cacophony. No longer was an Englishman's home his castle, if he had a phone line the enemy wasn't at the gates, he was right there in the living room, interrupting, cajoling, pestering, entreating and sometimes threatening. Finally, the telemarketing industry began to take TPS seriously. Prior to the Electronic Communications regulations they could ignore TPS and risk a notional slap from the DMA – now Ofcom could come after them.
Now most industries, faced with such a threat and clear evidence of customer distress would seek to address the problem. But not the telemarketing industry, oh no. Firstly, they re-defined the rules – provided you'd had "prior communication" with someone, it didn't matter if they had signed up to TPS – you could still call them. And secondly, if the calls are made from India the UK rules don't apply – so let's replace badly handled UK calls with ones made on poor quality lines, by people with little or no empathy and equally badly handled.
2005 arrived, Carphone Warehouse and then BT offered to help by registering you for TPS as well as providing call-screening services in BT's case. Suddenly "privacy" had moved from being a legal concept to a marketing one. BT Privacy saturated the media. And by September 2005 registrations on TPS had hit 10 million. Today, at the time of writing, registrations are growing at 30,000 new registrations a day. Which means that by some time in 2007 every single domestic phone line will have signed up to TPS and telemarketing will, to all intents and purposes, be dead.
What this tells us is that privacy law and the enforcement of privacy law is running behind what people want when their privacy is DIRECTLY invaded – something that calls do with ease. The same is true of email – it INVADES the privacy of my in-box. Somehow Direct Mail is much less invasive now – in fact it is almost quaint. Will this remain the case? I don't think so.
Consumers are about to score a remarkable victory over the telemarketers by killing it. This will, I believe, engender a fundamental shift in attitudes to every form of marketing
Not just Direct Mail and email, but advertising too. Already in the US , Personal Video Recorders (PVRs) are dramatically affecting advertising as viewers "skip" ads. It seems consumers everywhere now want to be free of intrusion into their activities by advertisers.
So, what does this mean for companies? Some, like BT, will turn privacy into a positive message that gives them a competitive advantage. Others will try to "get round" the law by various means of debatable legality. Many will simply ignore it and carry on as they are now. And, ultimately, three outcomes will crystallise:-
- The ones that follow BT's example will thrive as customer will trust them in preference to those that ignore privacy.
- The ones that try to "get round" the law will find themselves increasingly marginalised as consumers refuse to do business with them out of frustration.
- The ones that ignore the law will thrive as their costs will be sufficiently lower that they can persuade customers to ignore their privacy misgivings and buy on price alone.
Today (Nov 1 st 2005) Ofcom has finally announced that it will use its powers under the Communications Act (Sections 128-131 of the Communications Act 2003) to take action against persistent misusers of the network. And misuse now includes silent calls. A silent call is one where an automated dialer initiates a call when there is no tele-operator available to handle the call, resulting in the phone ringing but the recipient of the call only hearing silence. As from today :
- Any abandoned calls must carry a recorded information message which identifies the source of the call and offers the person called an opportunity to decline further calls from that source;
- Calling line identification (CLI) must be presented on all outbound calls from call centres using automated calling systems. CLI allows people to dial 1471 and access the telephone number of the person or organisation calling them;
- Telephone numbers dialled then abandoned should not be called again by that organisation's automated calling system for at least 72 hours, unless a dedicated operator is available to take the call;
- Abandoned call rates must be below three per cent of total calls for any 24 hour period for each campaign. This is a lower threshold than existing published industry codes which require a five per cent limit, and is intended to require operators to manage their systems more effectively; and
- Records must be kept to demonstrate compliance with these requirements.
Additionally, Ofcom has asked the Government to increase the maximum penalty that Ofcom can impose from £5,000 to £50,000 for each breach of the rules.
Now all we need is for Ofcom and the Information Commissioner to take concerted action against those who flout the law. Privacy is not optional, adherence to privacy law should not be optional.
See Also:
Excell drops silent calls
[This article is reproduced by kind permissionand is the copyright of the author, Tim Beadle, of Marketing Improvement] |
