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Direct Marketers Face New Challenges Nationally

With legislation pending for national do-not-call and do-not-e-mail lists, you've got to be careful who you target.

Opinions expressed by Entrepreneur contributors are their own.

Currently 33 states allow their residents to sign up for inclusion on a "do not call" list, telling telemarketers not to solicit these phone numbers. Now the federal government is getting in on the act with a bill, awaiting the president's approval, for a national registry. If passed, consumers could begin signing up on the list in April.

Telemarketers purchase the state lists on a regular basis. The FTC will be in charge of distribution and implementation of the national list. "Telemarketing firms face a very challenging environment where they've got to comply not only with a national do-not-call list, but with 33 ever-changing lists," says Keith Fotta, president, CEO and founder of Gryphon Networks Corp., a Norwood, Massachusetts-based do-not-call (DNC) compliance service. "If they call anyone on any of those lists, they can be fined up to $25,000 in some states, and in Kentucky the third violation is a felony."

Next Step
For more information on do-not-call/e-mail lists, visit these Web sites:

Gryphon Networks provides telemarketers with an automated solution to the DNC problem. Whenever one of its customers dials a DNC-registered number, the telemarketer hears a message saying: "You've reached a do-not-call restricted number. Please dial a new number now." The system also keeps track of call curfews--federal law restricts calls between the hours of 8 a.m. and 9 p.m.

In addition to keeping track of state registries, telemarketing firms also maintain their own DNC lists. (Gryphon's system can also manage these internal lists.) Federal law allows consumers to ask callers to remove their name and number from that company's listing. That request ensures that the consumer will not be called by anyone from the telemarketer's firm for 10 years, or the firm could face an $11,000 per-call fine.

"It is impossible at this point to keep up with the ever-changing state do-not-call lists and keep yourself in business," Fotta says. "Firms have been fined upwards of a quarter of a million dollars for violating these laws, and in most companies, that would cause significant damage to their financial statements."

And with these laws, size doesn't matter. "The FTC has made it clear that its national DNC lists will apply to all businesses, regardless of size," says Charulata Pagar, a partner specializing in advertising and trade regulation issues at the Chicago office of law firm Hall Dickler Kent Goldstein & Wood LLP. "However, the FTC has also said that the annual fee to access the national DNC lists will be based on the number of area codes the company seeks to access"--a possible break for small businesses.

In addition to do-not-call lists, states and the federal government are also considering creating do-not-e-mail lists. So far, Alaska, California, Hawaii, Illinois, Michigan, New Jersey, Oregon, Vermont, Wisconsin and Washington have passed laws restricting the sending of e-mail, and a number of states have proposed legislation to create a national or a statewide do-not-e-mail registry.

While these limits may seem stifling to companies that rely on direct marketing to find customers, Fotta believes these registries could actually benefit business. "It will provide them with the opportunity to really focus on people who might be receptive to their calls," he notes. "If you're eliminating calls to people who are on state [registries], they're probably not going to buy anyway."