DMA Presents Telemarketers Concerns at Senate Committee Hearing
Washington, DC, August 2, 2007 — In testimony Tuesday before the Senate Committee on Commerce, Science and Transportation, the Direct Marketing Association (DMA) commented on several key issues related to the oversight of the National Do Not Call Registry and the broader oversight of telemarketing practices.
The Committee is currently considering permanent funding for the registry, including the fees that are being charged to telemarketers for access to the registry. In his testimony, Jerry Cerasale, DMA’s senior vice president for government affairs, noted that the fees have increased dramatically in the four years since the registry’s inception.
When the registry was under development in 2002, Cerasale pointed out, the Federal Trade Commission (FTC) proposed to cap the maximum annual fee per telemarketer to obtain access to the entire registry at $3,000. However, by the time the Commission made the registry available in 2003, the cost for access was set at $7,375. Less than a year later, the FTC increased fees to $11,000. In 2005, the fees increased to $15,400, and in 2006 to $17,050. This amounts to a 263 percent increase in just four years.
Cerasale told the Senate committee that it was clear that Congress needs to establish a cap on the cost for access, and called for future fee adjustments to be tied to a fixed index such as the consumer price index or the rate of inflation. He also emphasized DMA’s belief that the fees collected should be used solely for the administration of the Registry.
In testifying, Cerasale took the opportunity to express the concerns of many telemarketers about the accuracy of the registry. Anecdotal evidence from DMA members suggests that as many as 30 to 40 percent of the telephone numbers on the registry are included incorrectly.
In addition to the dropped, wireless and fax numbers that are included unnecessarily, Cerasale noted that much of the inaccuracy “results from the fact that there is a significant time lag from when an individual moves and changes their telephone number to the time when that number is removed from the registry.”
“This is particularly problematic,” Cerasale said, “because many reassigned telephone numbers are given to subscribers who recently have moved to new geographic regions and are, therefore, most likely to respond to telemarketing calls for items such as home security systems, home insurance, lawn care, and newspaper delivery.”
At the Committee’s request, Cerasale concluded his testimony by addressing issues relating to list compilers raised by Committee member Senator Claire McCaskill (D-MO) in a May 23 letter to the Chairman of the FTC. The Senator’s letter was in response to a May 20, 2007, New York Times article about the use of seniors’ personal information for potentially fraudulent telemarketing purposes.
“We could not agree more with the Senator that seniors and other groups of individuals should not be exploited based on such vulnerabilities,” said Cerasale. “DMA fully supports responsible practices by compilers of marketing lists, and has long been a leader in establishing comprehensive self-regulatory guidelines for its members on important issues related to telemarketing, among many others.”
Cerasale pointed out that DMA’s current Guidelines for Ethical Business Practice have always prohibited such conduct, and highlighted recent efforts by DMA to clarify its mandatory requirements for data compilers.
In June 2007, 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. The revised guidelines also define appropriate standards for companies that assemble personally identifiable information about customers for the purpose of facilitating renting, selling, or exchanging information to non-affiliated third-party organizations for marketing purposes.
The complete text of DMA’s July 31 Senate testimony is available online at www.the-dma.org/government.
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About Direct Marketing Association (DMA)
The Direct Marketing Association (DMA) (www.the-dma.org) is the leading global trade association for business and nonprofit organizations that use and support multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable and appropriate offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process.
Founded in 1917, DMA today represents more than 3,600 companies from dozens of vertical industries in the
In 2006, marketers — commercial and nonprofit — spent $166.5 billion on direct marketing in the
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