The Direct Marketing Industry and the
Sham of Self-Regulation
The principal proponents -- and sole beneficiaries
-- of UBE are the companies and trade associations involved in the direct
marketing industry. This industry, thwarted by numerous court decisions
affirming the right of property owners to forbid access to their property
for intrusive advertising, seek to take away that right from property owners.
Congress must recognize this attempt for what it is and not be fooled by
the disingenuous words of the direct marketing industry.
The mask presented to Congress by the direct
marketing industry is completely opposite the face it presents to the public.
When before Congress, the FTC or other regulatory bodies, industry representatives
take great care to appear reasonable and responsive to the public interest.
However, the June 1998 issue of TeleProfessional,
a trade publication supportive of the telemarketing industry, reveals that
industry's true nature. In a commentary, the editor stated: "[W]e are extremely
disturbed by what appears to be an industry response to legislation and
regulation that is based more on slight [sic] of hand and evasion than
compliance." (The article was reprinted at http://www.consumer.net/telepro.asp
with the permission of the publisher; however, members of the telemarketing
industry, alarmed that their history of non-compliance was exposed, succeeded
in getting the permission withdrawn).
Representatives of the direct marketing industry
have claimed that the majority of its members abide by the relevant laws
and regulations, and that it is the fly-by-night operators who do not comply.
TeleProfessional's investigation proved, however, that this claim
is an outright lie.
TeleProfessional sent requests to ATA
members for copies of their Do-Not-Call policies which the Telephone Consumer
Protection Act (47 U.S.C. § 227; text reproduced at http://www.consumer.net/47usc227.asp)
requires telemarketers to maintain and provide to consumers upon request.
Three months after these requests were made, fewer than one-third of those
contacted had complied with the statutory requirements.
Major companies were among those who failed
to comply, including several members of Telewatch, an industry watchdog
group which pledged to abide by a higher standard than that required by
law. TeleProfessional revealed the sham of this posturing.
The TeleProfessional editor was deeply
dismayed with these results. The publication had been actively promoting
industry legitimization through a process in which industry representatives
work with legislative and regulatory bodies to formulate workable guidelines
of practice, backed by substantial penalties for non-compliance. Their
study showed that, seven years after enactment of the TCPA, this effort
was a miserable failure.
Some telemarketers were not even aware that
their activities were governed by federal law, or believed, without basis,
that they were exempt from its provisions. Others seemed to view the regulations
as nothing more than "guidance" useful for providing a "good sense of direction."
Few seemed willing to acknowledge the fact that the Telephone Consumer
Protection Act and the Telemarketing Sales Rule is law and quite
specific in its requirements.
Some of the major, well-known companies who
have repeatedly refused to provide copies of their Do-Not-Call policies
are AT&T, America Online, McGraw-Hill and Hearst Corporation. AT&T
has not only consistently refused to comply with the law (an act which
entails a $500 fine per incident), it has also used its attorneys to intimidate
those who reported or complained about AT&T's non-compliance, as well
as consumer groups reporting on AT&T's practices.
The direct marketing industry's record of self-regulation
is atrocious. Jon Kaplan, former president of the American Telemarketing
Association (ATA), declared that the ATA would not take action against
one of its members, even if one was found guilty in court, unless
a government agency took action first. In other words, the ATA, notwithstanding
its public stance promoting self-regulation, will discipline a member only
when the government initiates proceedings. Even a finding by a court that
a member has failed to abide by the law is not sufficient for the ATA to
take action. This is not self-regulation in any sense of the term.
The direct marketing industry's cavalier attitude
toward regulation, its pervasive non-compliance with Do-Not-Call rules
and related regulations, has led to an increase in complaints and enforcement
actions, as well as a quadrupling of requests to be added to the Telephone
Preference Service. Moreover, the industry's contempt of the public interest
is made obvious by the fact that the ATA and the Telephone Marketing Council
of the Direct Marketing Association refuse to respond to inquiries from
The TeleProfessional editor concluded
As an industry, we are acting like
petulant children. Requests for information about ethics policies, mechanisms
to complain about abuse and other public domain information are, according
to the reports, routinely rejected, and those asking for the information
subject to either offhand dismissal or profane diatribes.
Remember: this is a statement from a publication
friendly to the direct marketing industry.
The direct marketing industry, having already
made clear its contempt for the rule of law and the public interest, must
not be granted additional rights to invade citizens' privacy and appropriate
their property without compensation. Given that the industry does not even
comply with the minimal restrictions Congress and the FTC imposes, it is
completely unrealistic to expect the industry to comply with regulation
of e-mail abuse. The direct marketing industry has proven time and time
again that it will cheerfully ignore the requirements of the law. Such
renegade and criminal behavior should be punished, not rewarded with additional
rights and privileges which will only create new opportunities for abuse.
By Nick Nicholas,
last revised: Feb. 2, 2000.