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FCC Hits Hard With DNC Fine; Just 1 Question
What the costs to corporate America are to defend against DNC legislation is as yet unknown, but some companies have started to try new outbound customer campaigns.
For the rest of the February 2004 issue of CRM magazine please click here
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The Federal Communications Commission (FCC) is getting tough on do-not-call violators. The FCC has imposed its first fine--to AT&T in the amount of $780,000--for calling customers that asked not to be called. It is ironic that AT&T is helping the FCC to operate and manage the national do-not-call list. The fine, however, does not stem from the FCC's national DNC legislation. Instead, it's based on long-standing legislation that states if customers specifically tell a company not to call them, the company must respect those wishes for 10 years. AT&T, the FCC charges, has repeatedly solicited 29 customers on 78 occasions over the course of 12 months, despite customers asking AT&T telemarketers not to call. The FCC is seeking $10,000 for each alleged violation. The maximum fine for such violations is $11,000 per call. Previous violators of company-specific no-call lists have drawn only warning letters from the FCC. In its defense, an AT&T spokesman maintains that the infractions are overstated. He suggests that complaints could be due to telemarketing calls from subsidiaries like AT&T Wireless, which are considered separate businesses. Nonetheless, the fines show the FCC's commitment to helping disgruntled consumers. According to FCC Chairman Michael Powell, telemarketers should consider themselves on notice that the FCC will protect consumers "who choose to be left alone in their homes.'' The surprise move has industry analysts taking notice. "It shows the FCC is serious and is going to hold companies responsible for their infractions," says Glenn Gaudet, partner and practice head of Reservoir Partners. Gaudet warns that AT&T's fines are only the beginning. He expects more to come from the FCC, scaring some companies into trying new outbound customer campaigns. Reservoir Partners recent report, "Do Not Call--An Executive Risk Assessment," estimates that 30 to 50 percent of a company's list will sign up for a DNC registry. "That's a big impact on potential business prospects for a company, and it's going to change the approach a business takes to reaching out to customers," Gaudet says, citing as an example a real estate firm with more than 500 offices that stopped calling customers altogether, for fear of being fined by the FCC.
Why not simply compare lists and call customers that haven't registered on the national DNC? Gaudet says even that's too technical for smaller companies. "Low-tech organizations look at a phone book and say, Go and drive some business. There [is] a significant amount of [companies] with that kind of low-tech approach to reaching out to customers," Gaudet says. "The challenge that some companies have is, they don't have the infrastructure to cross-reference their lists with the Do-Not-Call registry. So the impact on these businesses will be large." The larger the company, Gaudet warns, the more important it is to get all of its databases synchronized. "When you have several departments with several databases your opportunity for exposure is greater. So we recommend people do a risk assessment audit and have someone come in and identify the potential problem areas," Gaudet says. For AT&T and other companies that violate DNC legislation, there exists another problem: proving their innocence. Companies are automatically assumed guilty until proven innocent, according to Gaudet. He says a customer can complain to the FCC about a DNC violation and it is incumbent upon the vendor to prove its innocence. What are the costs to corporate America to defend against the DNC legislation? The answer is still a bit murky. "We're just starting to look at those numbers, but they are going to be somewhat significant, particularly if a company isn't prepared for it," Gaudet says. "This will radically change how companies handle outbound marketing with permission-based marketing." Just 1 Question CRM magazine: Will contact center agents be affected by the do-not-call legislation? Cory Wiegert, director, product marketing, Siebel Systems: The do-not-call legislation is going to have a massive impact on the service agent. Organizations will try to figure out how to weave [selling] into service, because customers are initiating the contact. But cross-sell and upsell initiatives will only work if [the CRM system] takes the decision out of agents' hands and puts it into the hands of those who aren't in the fray.
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