Protecting agents from costly cold calling fines: how to ensure successful compliance.

Telephone prospecting remains among the most effective and efficient business generation tools available, particularly for banks, mortgage brokerage firms and insurance companies that conduct proprietary calling campaigns from lead lists, or contract for call services through third-party service bureaus. Thousands of professionals continue to use cold calling to successfully increase their client base and build client relationships in an effort to increase sales. However, today's direct marketers and service bureaus face significant consumer reluctance to be contacted and an unprecedented regulatory compliance challenge.

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Consumer demand for telephone privacy has resulted in the establishment of federal and state do-not-call registries. Launched on October 1, 2003, the national do-not-call registry is administered by the Federal Trade Commission and enforced jointly with the Federal Communications Commission. As of this writing, 55.3 million consumers have registered for the national list. In addition, there are 42 state do-not-call laws and multiple state do-not-call registries that may be independently enforced in cases where state law is more restrictive than federal rules.

The combination of multiple state and federal regulations plus multiple do-not-call databases creates a considerable burden for compliance-conscious telephone marketers. Federal, state, and internal do-not-call lists, abandonment rates, caller I.D. and myriad call curfew regulations require the design and implementation of new business processes to proactively ensure that calling campaigns are managed within the parameters of the continually changing legislation. Given the complexity of the laws and the enormous quantity of the data, it has become tremendously challenging for companies to effectively and efficiently manage the DNC compliance challenge without help.

Certainly companies have an incentive to seek assistance. Indeed, do-not-call regulations have spawned a burgeoning industry of compliance products ranging from simple list scrubbing services to cutting-edge technology applications that automatically ensure full compliance on every call. Telephone prospecting is a time-proven, successful marketing approach, but telephone campaigns present significant liability exposure if calls run afoul of the laws. Businesses face fines of up to $11,000 per call if they call any consumer whose number appears on the national DNC registry. State fines range up to $25,000 per errant call, and in Pennsylvania, consumers share a ten percent bounty in levied fines. In an early demonstration of their resolve, the FCC levied a $780,000 fine against AT & T in November 2003 for DNC violations of the Telephone Consumer Protection Act. The FCC cited the telecommunications company for 78 calls to 26 consumers who had asked to be put on AT & T's internal do-not-call list--at $10,000 for each violation. The action clearly demonstrates the enormous liability that is created by a relative handful of mistakes. The implications for a small business are substantial.

Do-not-call regulations are sure to change marketing practices. Some companies may consider new consumer contact approaches by re-allocating telemarketing dollars to e-mail or direct mail. However, these media have historically proven to be less effective than the telephone. Plus, as evidenced by the recently passed federal "Can-Spam" Act which regulates e-mail as a consumer contact medium, regulation of alternative direct marketing methods is sure to increase.

Companies may choose to allocate internal resources to build and administer a homegrown solution. Demands on hardware configuration to handle enormous data files and subsequent administrative and maintenance costs are likely an inefficient use of internal resources and a potential compliance risk. Would you bet $11,000 per mistake on a homegrown solution?

Business are better served by accepting do-not-call regulations as a mainstay of marketing operations and by investing in solutions that ensure compliance while simultaneously improving efficiencies and creating competitive opportunities. It's clear that consumers on DNC lists do not make the best target prospects. Marketing practices that are targeted to specific consumers who are genuinely interested in learning more about the value of specific products or services will quickly become a critical component of successful telephone marketing campaigns. Businesses that channel their marketing focus to leverage the opportunity to call the right consumer at the right time with the right product will gain a quantifiable competitive advantage.

Regardless of marketing approach, companies that ultimately contact consumers by telephone must ensure that such contact is fully compliant with applicable state and federal laws. There are a number of DNC technologies on the market, each with distinct approaches to the compliance challenge. These solutions help enable automatic compliance with all state and federal consumer DNC laws without manual intervention. Services are delivered via networking technology, providing nationwide, multisite, professionally managed DNC compliance protection in real-time. Detailed reporting of agent productivity and compliance is also possible with many DNC technologies.

Companies selecting a DNC solution should look for the following, as cited in Celent's 2003 report, "Crunch Time For Do Not Call Compliance."

A strong fit with the company's business model. DNC issues are particularly important for companies that rely heavily on direct-to-consumer solicitations. This applies to both internal calling agents and to third parties making calls on behalf of a client company. Companies should look for a solution that will improve the company's image among prospects and maximize agent productivity.

Solid DNC functionality and ease-of-use. The solution must make it simple for agents to use the technology and reduce compliance risks. Such reliable functionality helps ensure:

* Multiple monthly certifications without price penalty;

* DNC numbers are eliminated before they are dialed, increasing dialer efficiency;

* Complete internal control over data flow and file storage;

* Improved workflow with the ability to schedule certification tasks;

* A common interface to all remote calling locations and different dialing devices;

* Identification of blocks as state, federal, DMA, internal or cell phone;

* Scalable data storage capacity;

* Entirely secure data transactions--call tables never leave the customer's network; and

* An automated user interface that provides calling agents the ability to add new, company-specific DNC requests to a common database from all locations

Real-time compliance and reporting. A successful DNC solution will allow for automatic call table certification against all state, federal, DMA, cell phone and internal DNC lists, ensuring compliance among geographically dispersed offices. In addition, companies benefit from having insight into the calling activity of all agents. Reports, which should be permanently archived, must detail a host of data, including numbers dialed, time of dial, connection status and call duration.

Compliance has become crucial to business success. Companies must abide by DNC laws, and must aggressively avoid any violations. When agents are trained, it should be clearly communicated that DNC compliance is just as important as lead generation and sales. A few wrong calls to the wrong consumers could very quickly impact businesses, costing hundreds of thousands of dollars in state and federal fines.

For information and subscriptions, visit www.TMCnet.com or call 203-852-6800.

Keith Fotta is CEO of Gryphon Networks Corporation (www.gryphonnetworks.com), a provider of automated do-not-call compliance solutions for business. Gryphon's technology enables outbound telephone marketers to automatically manage compliance with all state and federal consumer do-not-call laws. The network-delivered technology provides nationwide, multisite, professionally managed do-not-call compliance protection in real time. Call accounting and agent productivity reports for all calling locations are accessible via the Internet. Founded in 1995, Gryphon Networks is a privately held company headquartered in Norwood, MA.

BY Keith Fotta, Gryphon Networks