Heeding a plea from the telemarketing community, the Senate Committee on Commerce, Science & Transportation has approved a bill that would set a cap on the maximum fees charged to telemarketers for access to the National Do Not Call Registry.
The Do-Not-Call Registry Fee Extension Act (S. 781) would limit the annual fee per telemarketer to obtain access to the entire registry at $14,850 or $54 for each area code. That is a decrease from the current maximum fee of $17,050 telemarketers currently must pay to access the entire list. The bill would tie future fee increases to changes in the consumer price index, and require that, as in the past, businesses be allowed to access the first five area codes of data at no charge.
In the past four years, the cost to access the National Do Not Call Registry has increased by 263 percent, said Direct Marketing Association (DMA) vice president for government affairs Jerry Cerasale in testimony before the Senate committee this August. In pleading for relief, Cerasale noted that when the registry was under development in 2002, the Federal Trade Commission had proposed to cap the maximum annual fee per telemarketer to obtain access to the entire registry at $3,000.
However, when the FTC made the registry available in 2003, the cost for access was set at $7,375. Since then, the FTC has implemented annual increases to $11,000 in 2004, $15,400 in 2006 and $17,050 in 2006, Cerasale stated.
In its explanation of fee increases, the FTC has said that it sets rates based upon a budget-target established by Congress. For example, the latter directed the agency to offset fees of $23 million in FY 2006 to cover the costs of operating the national registry and enforcing its requirements. For more information, see “FTC To Increase Do-Not-Call Fees in September," pub. date Aug. 22, 2006.
The agency has said that the fee structure is driven in part by the fact that the majority of those who access the National Registry do so free of charge. Businesses that request names from five area codes or fewer may access the list free of charge. Exempt organizations—those that aren’t legally obligated to scrub their lists against the national registry—also may access the list for free.
In addition, the number of entities that pay to access the registry is declining, the FTC reported.
But Cerasale said that bringing the fee increases under control had become a priority for his membership.
“For all of the legitimate marketers who are committed to remaining in compliance with the law, the Senate’s proposal will make the registry’s fee structure much easier and certainly more predictable tha[n] what we’ve experienced over the past four years,” he stated in a news release regarding the proposed bill.
The DMA’s foray before the Senate wasn’t all smooth sailing. While providing the floor to comment on the Do Not Call Registry fees, the Senate committee also took the opportunity to grill Cerasale concerning charges that telemarketers have unscrupulously targeted the elderly in expensive scams.
The committee asked Cerasale to address a letter Sen. Claire McCaskill (D-Mo.) sent to the Chairman of the Federal Trade Commission regarding the compilation of elderly contact lists. Sen. McCaskill’s letter followed a May 20, 2007 article in The New York Times concerning the alleged use of seniors’ personal information for potentially fraudulent telemarketing purposes.
Cerasale assured the committee that “DMA fully supports responsible practices by compilers of marketing lists.” He referenced new guidelines addressing the issue released by the DMA in June, titled, “Responsibilities of Database Compilers.” [Link: www.the-dma.org/guidelines/DatabaseCompilers/ ]
“DMA updated its guidelines to clarify that for sensitive marketing data—which includes data pertaining to children, older adults, health care or treatment, account numbers, or financial transactions—compilers should review materials to be used in promotions to help ensure that their customers’ use of the data is both appropriate and in accordance with their stated purpose,” he said.
Cerasale added that the guidelines also define appropriate standards for companies that compile personally identifiable information about customers for the purpose of facilitating renting, selling, or exchanging information to non-affiliated third-party organizations for marketing purposes.
Why This Matters: Marketers should ensure that any telemarketing conducted on their behalf is done so in compliance with the law, as well as with industry best practice standards. Telemarketing lists must be scrubbed against the Do Not Call Registry, and because this has become an expensive endeavor, marketers should be wary of vendors that claim to be able to conduct campaigns much less expensively than their competitors. Further, marketers should be aware of the need to compile data in a manner that protects vulnerable populations, such as the elderly and children.