The FTC, which is mandated by Congress to review telemarketing rules every five years, first proposed the creation of a do-not-call list in January 2002. The commission asked the public to comment on the idea, and within a few months it was flooded with more than 60,000 opinions. The "overwhelming majority" of these people supported the new rule, the government says.
Browsing through the comments, you see a country of virtually one mind regarding telemarketers -- Stop them! People are fed up by the number of calls they receive every day, by the attitude of the salespeople -- they're "rude," they "do not understand the words 'not interested'" -- and by a feeling of powerlessness over the telephone.
"When one is called on a Sunday morning with the intention of discussing burial plans, it's gone too far," one woman who identified herself as a senior citizen wrote. In some comments, there is, too, a sense that American society is quickly becoming nothing more than a culture of pitchmen and their products, and that the home should be a refuge from the constant drone of capitalism. "It first started with the door-to-door salesman, then the telephone marketers, next was the fax, e-mail and now Internet, pagers and cell phones. When will it stop?!" asks Matthew Damba, a resident of Virginia.
"I think there are two levels of anxiety that these calls create," says Robert Bulmash, of Private Citizen. "To some it's the calls themselves. But then there's another feeling which perhaps can't be cogitated on the part of the victim -- it's not the calls themselves but the sense that you're nothing more than sheep for the telemarketers to graze on, that you're being seen not as a person with rights but as a source of revenue."
Bulmash is right: The industry does see us as a source of revenue, but that's probably because we are, despite our complaining, rather too quick to buy stuff over the phone. On average, says Searcy of the American Teleservices Association, an American household makes three purchases per year in response to sales calls. In 2001, according to the WEFA Group, telemarketing purchases represented 4 percent of all sales to consumers in the United States, an enormous slice of economic activity. Before the imposition of the do-not-call list, WEFA estimated that by 2006, about $403 billion in sales would be made by telemarketers. By way of comparison, just $34 billion in retail sales were made over the Internet in 2001 -- but imagine the hue and cry if the government proposed regulations (such as, at the very least, the imposition of a sales tax) on e-commerce.
One reason companies like selling over the phone is that it's extremely cheap to do so. During the past decade, long-distance telephone charges have fallen dramatically, so if "I call you and spend 18 seconds on the phone, at six-second increments that call has cost me about a penny," says Bulmash. The telemarketer hasn't made a sale, but for just a penny the company has dropped its message into a customer's ear. "If I were to send that same person a mailing it would cost me 25 cents apiece," Bulmash says.
In the 1990s, the industry became even more efficient through the adoption of what might be termed the assembly-line method of telemarketing. This was made possible by a technology called the "predictive dialer," and you can blame it for making your life hell. The predictive dialer is a computer that initiates all the calls in a large call center. It dials numbers plucked from a database, and after screening out dead lines, busy signals and answering machines, it routes live calls to available representatives. The dialer allows salespeople to spend most of their time -- up to 55 minutes out of every hour -- making pitches. But the device is annoying to folks at home. Predictive dialers are responsible for the few seconds of silence you're greeted with when you answer a telemarketing call; the lag is caused by the dialer looking for a sales rep available to make a sale to you. Because the dialers typically dial more numbers than there are representatives in a call center, the devices also hang up on a number of calls answered by people at home, a phenomenon that many find creepy.
Technology allowed telemarketers to make more calls and, consequently, more money, but it also turned the industry into a pariah. Telemarketers could now make tens of millions of calls every night, and Americans were furious about it. Around the country, politicians, naturally, saw an opportunity to act. The federal government, in fact, is late to the party -- most states have already imposed their own do-not-call lists.
Insiders say that the industry was quite aware that its actions were angering Americans, and telemarketers did make attempts at reform. Meetings were held, proposals were floated, and initiatives were agreed to. But perhaps because the money was so good, telemarketing companies did little to change their ways. Jon Hamilton says that he was once at a telemarketing conference and "as part of my presentation, I said that the biggest surprise to me has been the lack of panic on the part of the industry." When he said that, someone in the audience yelled, "We call Jon 'Chicken Little!'" That was "a little funny," Hamilton says, "but my point was that a lot of companies have been hiding their heads in the sand."
Clearly, some in the industry still believe that they have done nothing wrong. The American Teleservices Association, the most hard-nosed of the trade groups representing telemarketers, maintains that its members have nothing to apologize for. That millions of people have signed up to keep their phones off-limits to salespeople may indicate that people want to reduce the number of ads they're shown every day, the group says, but it doesn't mean that people hate sales calls. "I think unfortunately we're in a society in which commercial messages bombard us all the time," executive director Searcy says. "Where you can say, 'No, I don't want to receive commercial messages anymore,' people will do it. If I told you that you didn't have to see television ads anymore, would you watch them?"
Asked if he thought his industry has an image problem, Searcy said: "I don't know an industry that doesn't have an image problem. Airlines have an image problem, Catholic priests have an image problem, journalism has an image problem. So everyone has an image problem -- you pick your poison."
At the same time that it created the do-not-call list, the FTC also issued telemarketing rules that would seem to go far in curbing the industry's worst practices. The commission ordered telemarketers to set their predictive dialers to "abandon" -- that is, hang up on -- no more than 3 percent of the calls made, and it prohibits call centers from masking their phone numbers from caller I.D. devices, which has been a common practice in the industry. Some telemarketers object even to these rules, but many say that they seem like commonsensical, necessary reforms. The rules won't prompt us to love, or really even tolerate, telemarketers, but they will probably reduce the number of calls that are made, and we'd have an easy way to identify who's on the other end before we pick up the phone.
The national do-not-call list, however, will destroy the industry -- everyone in the telemarketing business seems to agree with that assessment. Experts provide various theories about why this will occur, but the fundamental reason seems to be this: Americans think they don't like telemarketing calls, but they're wrong. Americans believe they want to be on a do-not-call list, but their past actions -- namely their purchases -- betray their true feelings. The FTC says that the do-not-call list is justified because it merely gives people a choice over whether they'd like to receive sales calls; according to that theory, the people who actually do buy things from telemarketers won't add their numbers to the registry, and the industry will not suffer at all. But that analysis is faulty, the industry says. In the abstract, everyone hates to be sold to -- you hate it when commercials interrupt your favorite TV show, you hate the "intrusive" ads displayed on your favorite Web site, you hate being handed pamphlets on the street, and you hate being called by a telemarketer who promises "a fantastic deal."
If given the choice, we'd all say we prefer not to see any commercial messages unless we ask for them -- but we'd all be lying. The fact is that even though we dislike advertisements in general, we do like specific ads, the ones for products that happen to appeal to us. And many Americans will sign up for the do-not-call list under the impression that they do not want to buy things over the phone, but they're lying, too. Some significant number of people who will sign up have in fact purchased something -- a phone service, a credit card, a magazine or newspaper subscription, or season tickets to the symphony -- after a telemarketer has called them and asked them to do so. And, if the right deal came along in the future, they would do it again, too.
The national do-not-call list, says Hamilton, makes it exceptionally easy for Americans to exercise a choice that they probably cannot make rationally. "Many of the state lists or the [Direct Marketing Association's] list asked you to think about whether that's what you wanted to do when you signed up," he says. "The federal list was set up so it would be a knee-jerk reaction." You could have one bad incident with a telemarketer and decide to keep your number permanently off-limits from all of them. Moreover, he says, "there are people who are going to sign all their friends up, too, because they're nuts! There's no checks and balances."
If the millions of people who do in fact buy from telemarketers decide to put their numbers on the do-not-call list, the effect on the country's ailing economy will not be good. Billions of dollars of economic activity will not take place, and, more critically, millions of people will lose their jobs. Recently, the Direct Marketing Association, an industry trade group, sent out an e-mail survey to 200 of the largest telemarketing companies in the country. Because only 31 of the 200 returned the surveys, it's unclear how accurate the results may be -- but they're nevertheless instructive.
The DMA found that 60 percent of all telemarketing sales representatives are women, and 25 percent are single mothers. More than a quarter are students, a third are minorities, and 5 percent are physically disabled. "Moreover, 10 percent of the sales representatives were reported to be immediately off welfare," the DMA said in its comments to the FTC. "Therefore, it is clear that in addition to employing many people, telemarketing, through flexible hours and workplace, allows for great diversity in employment opportunities. Many use telemarketing as a first job opportunity when entering the workforce from school or welfare."
Telemarketers are not unionized, and there was no labor lobby fighting for their welfare in Washington during debates over the do-not-call list. Still, many of them sent in letters to the FTC -- some were forced to do so by their employers, but others seem to have done it of their own accord -- and their opinions are at least as passionate as those from people who say they're upset with too many calls. "I am a disabled college student who has relied heavily in the past on telemarketing jobs to help make ends meet," wrote a Florida resident named J. Edward Resmondo Jr. "Telemarketing means jobs. These restrictions might very well cost the people who can least afford it the opportunity to work, which in my case it could cost me the opportunity to finish my college education. I believe that your efforts would be better focused on fraud and not the legitimate marketers whom I have worked for in the past and will work for in the near future."