The Do Not Call Register Act 2006 (Cth) (DNCR Act) prohibits telemarketing calls and fax marketing to numbers which are registered on the Do Not Call Register (the Register). Since the implementation of the Register in May 2007, the Australian Communications and Media Authority (ACMA) has been monitoring continuously compliance with the provisions of the DNCR Act.
So far this year, the ACMA has taken separate enforcement actions against two telecommunications providers. These enforcement actions are a timely reminder that direct selling companies should be aware of their obligations under the DNCR Act and ensure that they comply with these obligations.
In January 2014, Telco Blue Pty Ltd received a formal warning from the ACMA. The warning follows an ACMA investigation that found Telco Blue had engaged third party call centres to make prohibited calls to numbers on the Register and Telco Blue had insufficient oversight of these call centres.
In April 2014, the ACMA announced that Melbourne based telecommunications company, Zone Telecom Pty Ltd, has paid a $20,400 infringement notice for making telemarketing calls to numbers listed on the Register. An ACMA investigation found that, despite internal and external warning signs from early 2013 that Zone Telecom's marketing list may have included numbers on the Register, the business chose to accept this risk and continued with its telemarketing activities.
These cases show that the ACMA takes complaints very seriously and will not hesitate in taking action against businesses that do not comply with the DNCR Act.
It is also important to note that Australian businesses may be liable under the DNCR Act for telemarketing calls made by overseas call centres to Australian residents under a telemarketing agreement. As such, it is important for direct selling companies that engage overseas call centres to adopt best practice such as the guidelines set out below.
What is the DNCR Act?
The DNCR Act established the Register and the national industry standards which set minimum levels of conduct.1 Amongst other things, the DNCR Act sets out two key rules for telemarketers:
- A telemarketer must not make a telemarketing call to a number on the Register unless consent has been obtained for the call. Consent may be express or inferred; and
- A telemarketer must ensure that all agreements for the purposes of making telemarketing calls include an express provision that requires compliance with the DNCR Act.
Under the DNCR Act, a telemarketing call has two key elements, namely, it must be a voice call and it must have a particular commercial type purpose.2
Responsibility for telemarketing calls made to numbers on the Register rests with both the direct selling company and any person it engages to make telemarketing calls on its behalf (such as a call centre). The DNCR Act is relevant to direct selling companies that:
- directly make telemarketing calls to consumers; or
- engage third parties to make telemarketing calls on their behalf.
Take Home Points
If your direct selling business makes telemarketing calls or sends marketing faxes (either directly or indirectly), your business should give consideration to the guidelines set out below.
Guidelines for direct selling companies that make their own marketing calls:
- Submit calling lists to the Register Operator for "washing".3 ‘Washing’ is a process by which the Register Operator will check the contact list against the Register and identify all numbers on that list which are also on the Register. This process will help direct selling companies avoid contacting numbers that are on the Register. Direct selling companies that submit a list for washing can rely on the information provided by the Register Operator for 30 days from when the list was returned.
- Calling lists should be kept in a valid ‘washed’ state by monitoring when the 30 day validity period of each list is about to lapse.
- Direct selling companies should document their washing procedures and keep accurate records of the washing that has been carried out.
- Unless express consent has been given to calls outside prohibited calling hours, direct selling companies should not make telemarketing calls in the days and times set out below.4
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- Record details of each telemarketing call made or attempted.
- For all calls made on the basis of consent, direct selling companies should retain evidence to demonstrate that either express or inferred consent exists at the time the call was made.
- Record all ‘opt out’ requests made directly to the business and ensure that these opt out numbers are removed from your calling list.
- Keep a record of all complaints received.
Guidelines for direct selling companies that engage a third party (such as a call centre) to call customers:
- In your agreement with the contracted party, you should include an express provision that the contracted party will comply with the DNCR Act.
- If the contracted party causes an employee or agent to make telemarketing calls, you should include a provision in the agreement that they will take all reasonable steps to ensure that the employee or agent complies with the DNCR Act.
- You must ensure that they are aware of their responsibility to comply with the DNCR Act.
- You must include an express requirement in your agreement with the contracted party that the contracted party must comply with Part 6 of the DNCR Act (which sets out industry codes and standards).
- Agreements should be clear and comprehensive, covering all specific relevant requirements of the DNCR Act, including the matters set out above in relation to steps that should be taken by companies that contact directly customers themselves.
- You should make arrangements for the contracted party to supply regular compliance reports throughout the duration of the contract to enable you to asses compliance.
- You should ensure that the obligations for washing calling lists are clearly set out in the agreement between you and the contracted party.
Direct selling companies should ensure that their independent salesforce are aware of the restrictions under the DNCR Act. This information should be included in any procedures manual that is provided to their independent salesforce. Since the salesforce are unlikely to have the means to obtain continuously a 'washed' list from the Register Operator, we recommend that, for compliance purposes, direct selling companies advise their salesforce against making telemarketing calls which would be caught by the DNCR Act.