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The Honolulu Advertiser
Posted on: Monday, October 28, 2002

Getting rid of ring-around-the-clock

By Jim Krane
Associated Press

NEW YORK — Victor Symonette, a 49-year-old orchestra conductor, likes to sleep late on Sundays. So he pays his phone company, Verizon, $10 per month to block telemarketing calls.

Automation known as predictive dialers, which emerged in the late 1980s, have tripled productivity in telemarketing, says Christian Laudinsky, sales manager of MarkeTel Systems, the Canadian maker of the devices. Laudinsky says that despite legislation and call blockers, the future of telemarketing in North America remains strong.

Associated Press

"The last thing I want to hear is a telemarketer at 8 in the morning," he said. "You don't expect anyone to call you at that hour. You think it's an emergency."

Americans like Symonette pay $2 billion a year to block pushy calls from peddlers of credit cards, satellite TV and real estate, said Robert Bulmash of the privacy group Private Citizen.

For regional phone companies like Verizon, Qwest, SBC and BellSouth, privacy services like Caller ID and Security Screen are a growing source of revenue.

But phone companies aren't just trying to thwart sales calls. They're helping telemarketers make them.

Telecoms sell telemarketers high-capacity lines and sophisticated "predictive dialing" machines that have helped unleash a stampede of automated sales calls.

Some, like Qwest and Verizon,even sell home numbers of the same customers who buy their privacy services — unless they pay a fee to have their numbers unlisted.

"The phone companies are like arms merchants in a technological war between telemarketers and phone subscribers," said privacy advocate Jason Catlett. "They profit from both sides."

Customers of carriers including BellSouth and Sprint — which say they don't sell numbers — still surrender their privacy to firms that scan and sell White Pages data.

Verizon spokeswoman Catherine Lewis says the company isn't playing telemarketers and consumers against each other. "I don't think it's a case of we should pick one side over the other. We do serve both sides," she said.

It ought to be illegal, says Bulmash, whose group publishes the book "So You Want to Sue a Telemarketer." Bulmash says he has helped members collect $1.4 million from telemarketers who break privacy rules.

"If Terminix were to throw termites on my foundation, then bang on my door saying, 'Hey, you've got termites... ,' the attorney general would be all over them," Bulmash said. "The phone companies are doing the same thing."

Telemarketing has grown so widespread that the two federal agencies, the Federal Communications Commission and Federal Trade Commission, are exploring the creation of a nationwide "do not call" list similar to those that many states have created.

An FCC memo says telemarketers attempt 104 million calls a day to U.S. businesses and consumers. Sales revenue has risen from about $435 billion in 1990 to around $660 billion last year.

A computerized machine known as the predictive dialer is responsible for the boom. The machines dial numbers stored in a database using a mathematical algorithm to predict when a telemarketer will be ready to finish one sales call and start another. When the machine reaches a person, the call is transferred to a telemarketer who is just finishing a previous call.

"Predictive dialing has been a huge asset in efficiency," said Matt Mattingley, spokesman for the American Teleservices Association, an industry group. "You keep your operators busy talking to people. In this industry, time is money."

The sales industry might value its own time, Catlett says, but not yours.

"The growth in these infernal human-pestering machines is based on the unjust economics that telemarketers don't pay for wasting your time," he said.

The dialers, which first emerged in the late 1980s, have tripled productivity, says Christian Laudinsky, sales manager of manufacturer MarkeTel Systems of Regina, Saskatchewan.

Others, like Jim Conway, spokesman for the Direct Marketing Association, say calling efficiency has grown tenfold since the days when marketers dialed their own phones.

A firm with just four callers and eight phone lines can use MarkeTel's $13,500 predictive dialer and pitch products to 72,000 people a month, Laudinsky says.

For larger operations, Verizon and SBC sell more complex dialing capabilities from Concerto Software, which can leave messages on answering machines if a person doesn't answer.

All this advanced technology in telemarketing has spurred an "arms race" with call-blocking devices for consumers.

The race began with Caller ID boxes and anonymous number blocking. When telemarketers "spoofed" them with fake numbers, consumer devices got smarter.

Symonette, the musician who likes to sleep late, bought a $150 Siemens phone that "speaks" the caller's name and number, so he won't actually have to get out of bed to learn who's calling.

Others have purchased a $50 device called the TeleZapper, which thwarts predictive dialers by playing the shrill tones of a disconnected phone number.

Other devices offer "kill switches" that hang up and let callers know that the house doesn't take sales pitches, or require callers to use a passcode to get through.

Phone companies offer their own blocking/screening solutions, like SBC's Privacy Manager, Sprint's Privacy ID and Qwest's No Solicitation, which intercept calls without ID and ask solicitors to hang up.

For those who don't like paying for privacy, the FTC and FCC may soon offer some relief. Advocates believe both agencies will create a nationwide list of residents whom telemarketers may not call.

Chris Hoofnagle, legislative counsel with the Electronic Privacy Information Center, said: "This is one of those areas where it's safe for the government to tackle a big industry because the public is so fed up."