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.

By Devlin Smith

Opinions expressed by Entrepreneur contributors are their own.

Currently 33 states allow their residents to sign up forinclusion on a "do not call" list, telling telemarketersnot to solicit these phone numbers. Now the federal government isgetting in on the act with a bill, awaiting the president'sapproval, for a national registry. If passed, consumers could beginsigning up on the list in April.

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

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

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

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

"It is impossible at this point to keep up with theever-changing state do-not-call lists and keep yourself inbusiness," Fotta says. "Firms have been fined upwards ofa quarter of a million dollars for violating these laws, and inmost companies, that would cause significant damage to theirfinancial statements."

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

In addition to do-not-call lists, states and the federalgovernment are also considering creating do-not-e-mail lists. Sofar, Alaska, California, Hawaii, Illinois, Michigan, New Jersey,Oregon, Vermont, Wisconsin and Washington have passed lawsrestricting the sending of e-mail, and a number of states haveproposed legislation to create a national or a statewidedo-not-e-mail registry.

While these limits may seem stifling to companies that rely ondirect marketing to find customers, Fotta believes these registriescould actually benefit business. "It will provide them withthe opportunity to really focus on people who might be receptive totheir calls," he notes. "If you're eliminating callsto people who are on state [registries], they're probably notgoing to buy anyway."

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