Key Points:

If you outsource telemarketing calls, make sure your agreement with the telemarketer expressly requires it to comply with the Do Not Call Register laws.

With more than nine million numbers listed on the Do Not Call Register, including just over half of Australia's fixed line home numbers, Do Not Call Register compliance is an important issue for any business that uses telemarketing to promote its products or services.

Since the Do Not Call Register Act was launched in 2007, it has been illegal for businesses to make, or cause to be made, telemarketing calls to numbers recorded on the Do Not Call Register without the consent of the call recipient.

A business which uses a third party telemarketer to make calls on its behalf may be held responsible for the telemarketer's calls, unless the business took reasonable precautions and exercised due diligence to avoid the relevant contravention of the Do Not Call Register laws. For this reason, businesses which use third party telemarketers for telemarketing must remain vigilant about compliance with the Do Not Call Register laws.

Basic requirements for telemarketing agreements

Agreements for the making of telemarketing calls must include an express provision to the effect that the telemarketer will comply with the Do Not Call Register laws and will also take reasonable steps to ensure that its employees and agents comply. Civil penalties apply for non-compliance with these requirements.

Agreements should be entered into with telemarketers which are comprehensive and cover all specific and relevant requirements of the Do Not Call Register laws.

Amendments to the Do Not Call Register Act passed in February this year clarified that the requirements for telemarketing agreements are intended to capture arrangements where unsolicited telemarketing calls are likely to be made, and not just arrangements which involve specific understandings to make telemarketing calls.

In other words, there is no longer a need for a contract to expressly provide for the making of telemarketing calls before the above requirements are triggered. Significantly, this change appears to potentially capture a broader range of marketing services arrangements, including "broker" or "comparator" types of arrangements where outbound calls may be used.

Relevantly, the requirements for telemarketing agreements do not apply to agreements for the making of "solicited" outbound calls only. "Solicited" outbound calls are calls made in response to an order for, or an inquiry or request for information about, goods or services by a customer or potential customer where the primary purpose of the call is in relation to the order, inquiry or request, and the call is made within a reasonable time after the order, inquiry or request. Such calls are exempted from the meaning of "telemarketing calls" under the Do Not Call Register Act.

Businesses need to remain vigilant

A business may be held responsible for its third party telemarketer's calls (ie. on the grounds that it "caused" those calls to be made), unless it took reasonable precautions and exercised due diligence to avoid the relevant contravention.

According to the Australian Communications and Media Authority (ACMA), the body responsible for investigating complaints about telemarketing calls and enforcing the Do Not Call Register laws, this requires more than just having a sound telemarketing agreement in place. Businesses should consider implementing a range a measures to ensure their telemarketers comply with the Do Not Call Register laws, including:

  • compliance reporting
  • performance audits
  • taking appropriate action to address non-compliance issues (including terminating suppliers where appropriate).

Businesses should ensure that their telemarketing agreements contain appropriate rights and obligations to support these measures (for example, an obligation on the telemarketer to provide compliance reports).

Consequences of non-compliance with the Do Not Call Register laws

The ACMA has a number of enforcement options available to it, including issuing formal warnings or infringement notices and taking action in the Federal Court. Penalties for breach of the legislation range from $3,400 to $1.7 million.

The ACMA has the power to carry out investigations into suspected contraventions of the Do Not Call Register regime. Importantly for businesses, the ACMA has very significant coercive information gathering powers.

Recent enforcement action

In January 2014, telecommunications provider Telco Blue received a formal warning from the ACMA for making telemarketing calls to numbers on the Do Not Call Register. The calls were made by a third party call centre used by Telco Blue for telemarketing.

In this case, the ACMA considered that Telco Blue was responsible because its oversight of the call centre was insufficient to ensure the call centre did not make calls to numbers on the Do Not Call Register.

In the ACMA's media release, ACMA Chairman, Chris Chapman stated, "this case is a further reminder that a business commissioning a call centre is responsible if the centre fails to adhere to Do Not Call rules".

Making sure your telemarketing complies with the Do Not Call Register laws

For businesses that outsource telemarketing calls, it is essential to have an agreement in place with the telemarketer which includes an express provision that requires compliance with the Do Not Call Register laws.

But don't assume that having a sound telemarketing agreement in place is enough to avoid responsibility for your telemarketer's conduct. Businesses should remain vigilant about their telemarketing activities and ensure their telemarketing agreements are monitored and enforced.