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Judge strikes down national 'do not call' list

It was to take effect next week and ban telemarketing calls to millions of consumers. Now, analysts are advising companies how to proceed given the uncertainty over the list.

About one week before it was scheduled to take effect, the federal "do not call" list has been put on hold by a U.S. District Court judge in Oklahoma.

Judge Lee West blocked the list, which now contains more than 50 million telephone numbers, in a decision issued late Tuesday. He said the Federal Trade Commission did not have the authority to set it up.

The FTC has promised to fight the ruling, calling it "clearly incorrect."

While Judge West's ruling gives outbound telemarketers in the call center some breathing room, they should realize that this is not something that's simply going to go away and that opt-out capabilities may in fact be a better approach, said Elizabeth Roche, a vice president with Meta Group in Stamford, Conn.

"Companies should give customers the ability to choose the channel they want to be marketed to through," Roche said. "Whether the [national] 'do not call' registry actually goes into effect, I think these are still really good business practices. In fact, it makes companies more customer-centered by designing around customers rather than through legislation."

The threat of the new "do not call" registry has seen call centers invest in new technology to comply with the law, but the fact remains, particularly with CRM applications, that vendors were already offering opt-out functions, Roche said.

If anything, the ruling may in the short term reduce the number of telemarketing calls the public will receive in coming days. Under the legislation, an individual with a prior business relationship with a company may still be contacted and marketed to over the phone. Such prior business relationships are defined in part as requests for information about promotions. As a result of those loopholes, telemarketers were making an extra push to qualify as many people as possible for future calls before the law was scheduled to go into effect Oct. 1. In fact, people who signed up for the list may have received more calls in recent days than those who didn't.

"I've heard people are buying up the 'do not call' list and marketing to those people frantically before it goes into effect," Roche said. "I've been getting calls myself. I think people are anticipating that while this goes through the court system the public will not stop registering. Companies will have to respond to that kind of pressure from the general public."

That response, Roche said, should be a focus on inbound interactions that have cross-sell and up-sell opportunities, as well as advertising on relevant Web locations.

The need to change marketing tactics has apparently been heard loud and clear by the Direct Marketing Association, which filed the lawsuit claiming the list violated telemarketers' First and Fifth Amendment rights and that the FTC does not have the authority to enforce it.

"The DMA acknowledges the wishes of millions of U.S. consumers who have expressed their preferences not to receive telemarketing solicitations," the DMA said in a release issued today.

While telemarketers have been fighting the legislation, they have also been updating their systems in order to comply.

"I think people are pretty well prepared," said Penny Reynolds, senior partner with the Call Center School, a Nashville, Tenn.-based consultancy. "Most are taking it pretty seriously. There are some pretty hefty fines involved."

Under the legislation, telemarketers could have been fined up to $11,000 for an errant call.

More than two dozen states have versions of a "do not call" list, and the Direct Marketing Association maintains its own list.

"The problem is, consumers don't know about [the DMA list]," said Elana Anderson, a senior analyst at Cambridge, Mass.-based Forrester Research. "So it's clearly not working."

The court's decision may buoy an industry dealt yet another blow this week, the sweeping new antispam law enacted in California.

Anderson said that new regulation will likely face a legal challenge, too.

"They never really define what spam is. So expect courts to have to answer that question, too," she said.

News editor Jon Panker contributed to this report.


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