ACMA announced its biggest scalp yet under the new law, following an investigation into calls made by an offshore call centre on behalf of Telstra.  Inexplicably, Telstra allowed illegal calls to continue after ACMA had raised concerns based on several complaints.

“The investigation found that inadequate compliance systems, procedures and supervision had contributed to calls being made to numbers on the Register where the consumers were not existing Telstra customers.”

Telstra may be the biggest Do Not Call catch so far for ACMA, but it’s not the record penalty payer.  That ‘honour’ belongs to Dodo at $147,400.

If a telemarketer’s remaining ’annual’ subscription credits aren’t sufficient to pay for washing a submitted list in less than 12 months, they will have to buy a new ‘annual’ subscription before that list can be washed.  In that case, any unused credits from the first subscription will be rolled over into the second one.

ACMA has made the change because 90% of list washing ‘access seekers’ are already estimating their requirements pretty accurately.   If they keep doing that, the new block prepayments will usually cover a year’s use.  If not, access seekers may find their annual subscriptions aren’t actually annual.   Wonder what ACCC would make of a CSP that advertised an ‘annual’ fee that may or may not cover a year

Keep reading for the full table of rates, showing the comparison with 2008/09.

Do Not Call Register charges for list washing

We’ve previously poked ACMA’s eye about keeping its thoughts to itself too much, so it’s great to see a move towards a thorough, straight-talking booklet that offers detailed guidance on the regulator’s experience and how it sees things.

“The draft guidelines have been drawn from consultation with telemarketers who have implemented thorough and effective compliance systems, as well as experience gained through ACMA investigations into non-compliance. Put simply, ACMA has looked to industry for what does work, and has observed through its investigations what doesn’t work.”

We’ll certainly be reviewing the draft carefully and making a few suggestions. 

Comments and queries can be directed to robert(dot)urquhart(at)acma(dot)gov(dot)au.  Close date for comments is Friday 13 February 2009.

‘ACMA has embarked on a campaign to improve telecommunications compliance that includes formal investigations, warnings, detailed letters putting individual providers ‘on notice,’ and an industry newsletter specific to the telco industry which provides practical advice about adhering to compliance requirements.’

A growing list of Aussie telcos has already been on the receiving end of ACMA’s attention.

Who’s on report so far ?

Since the Do Not Call Register Act took effect on 31 May 2007:

• Dodo was hit by a $147,400 penalty in October 2008.
• Dodo has submitted to an Enforceable Undertaking about its future behaviour.
• Astron Communications has submitted to an Enforceable Undertaking.
• People Telecom has submitted to an Enforceable Undertaking.
• Global Telelinks has received a formal warning.
• Ezycall has received a formal warning.
• m8 Telecom has received a formal warning.

What goes wrong ?

The main problem seems to be commission sales arrangements.  A telco engages a telemarketer / agent / ‘reseller’ to push the brand, and before you know it an incentive-crazy sales force is dialling anyone anywhere and saying anything.

Problem is that the Act often sheets home responsibility for third party behaviour to the telco that’s behind the deals.

Hence ACMA Chairman Chris Chapman’s comments today:

‘I strongly urge businesses at every level of the telecommunications marketing chain to take responsibility for their Do Not Call compliance.’ 

‘ACMA will continue to seek an environment of accountability in the telecommunications industry when it comes to Do Not Call compliance. Where reselling arrangements exist, we are looking for companies at the top end of the marketing chain to take a lead role in insisting on high standards of compliance amongst the businesses that depend on them.’

It ends an information drought for Australian businesses that use contract call centres for telemarketing.

As a regular contributor to the coffers of the Telecommunications Industry Ombudsman, Dodo is no stranger to regulatory imposts.  But the speed at which big Do Not Call fines can accumulate should alarm even the most blasé operator.

Just 67 non-compliant telesales calls translated into a $147,400 penalty.

You read it right:  67 calls = $147,400

According to a written undertaking the company has provided to regulator Australian Communications and Media Authority (ACMA), ACMA’s investigation turned up 67 calls in a three month period to homes that should have been immune thanks to their registration on the national Do Not Call list.  Those calls have translated into a penalty of $147,400.

Call it a cost of $2,200 per call or annualise it at around $600,000 a year.  Any way you look at it, it’s a scary number especially for a first offence.  Just imagine the hole that 670 or 6,700 unlawful calls would punch in a bottom line.

ACMA comes out of the closet

Even more interesting than ACMA’s hard line with Dodo is that the regulator has finally come out of the closet on some of its opinions about how to comply with the Do Not Call Register Act.  For some time now, the authority has been developing private views about what a business needs to do when it engages a contract call centre for a sales campaign.  Until now, it hasn’t gotten around to letting business into the secret.

CSPs responsible for the sins of their outsourced telemarketers

Basically, the Do Not Call Register Act says that if a contract call centre breaches the Act, the customer who engaged it is also liable unless it used reasonable efforts to prevent the breach.  The Act is worse than silent as to what might constitute due diligence.  It mandates a puny clause that must appear in any outsourced telesales contract.  Many enterprises have understood the inclusion of the clause to be all that’s required.

ACMA sets the bar high

Even if the standard clause is only a starting point, it gives no hint of the lengths that ACMA privately considers are required.  Neither does the authority’s web site, or the Do Not Call Register site it auspices.  Nor, as far as we know, has any public utterance of the regulator until Dodo’s written undertaking appeared online with a media release.

Undertakings are extracted by regulators like the Australian Competition and Consumer Commission and ACMA as substitutes for court orders. Although they often set higher standards than a business might adopt if it hadn’t already been caught out legally, they still shed valuable light on what the regulator reckons proper practice to be.

How does your telemarketing contract measure up ?

So if you have a contract telemarketing arrangement in place, see how you stack up against the following benchmarks gleaned from the Dodo document.

Does your contractor provide regular reports of all numbers called and which of their staff made each call ?  Do the records include whether each call was answered and its duration ?  Are these records retained for at least a year ?

Do you know which phone companies carry your contractor’s calls ?  Is there a system for recording that information for at least a year afterwards ?

Are all call centre staff trained in compliance with the Act ?  Are there systems to ensure caller identification is turned on at all times ?  If someone calls back the displayed number, will they easily reach a representative of your organisation ? Absent these kinds or processes, ACMA is likely to sheet home blame for any call centre misconduct to you.

But wait, there may be more …

Unfortunately, it’s not at all clear that ACMA’s expectations are exhausted by the Dodo documents.  We have heard suggestions that clients of call centres should audit called number records against the official register, a tricky assignment since the register will have changed since the calls were made.

Come on ACMA, share the secret

In time court rulings will clarify what’s required but like the Australian Taxation Office, ACMA is well placed to discourage court challenges.  With maximum penalties that read like telephone numbers and the risk of a quadruple or nothing outcome from a court, most businesses will compromise rather than test ACMA’s positions in court, which is why we’d like to see those positions articulated more transparently.  If the authority has some good ideas about how to comply with the law, let’s hear them as positive advice rather than deduce them piecemeal from undertakings like Dodo’s and one liners in media releases.

It goes as far as the idea that all Australia phone numbers could be allowed to register.

There’s a short period for public submissions.

What numbers can be on the register today ?

Quoting ACMA:  ‘At present, telephone numbers not used primarily for private or domestic purposes and all numbers used exclusively to send or receive faxes, may not be listed on the Register. These arrangements effectively exclude businesses and other entities from being able to take advantage of the protections provided by the Register.’

ACMA’s options

ACMA raises the following potential options.

Package A

• all Australian telephone numbers allowed to be listed on the Register
• fax numbers allowed to be listed on the Register

Package B

• emergency service organisations allowed to list their telephone numbers on the Register
• small businesses allowed to list their telephone numbers on the Register
• small businesses allowed to list their fax numbers on the Register.

Submissions invited

ACMA seeks submissions by 12 September 2008.

Submission can be lodged:

• via www.dbcde.gov.au/donotcall
• to dnc.consultation@dbcde.gov.au
• to The Manager / Spam and Do Not Call Register Section / Department of Broadband, Communications and the Digital Economy / GPO Box 2154 / CANBERRA ACT 2601 /
• to fax 02 6271 1827.

Consultation discussion paper

ACMA’s 20 page consultation discussion paper includes a detailed questionnaire and response form.

Our take on it

Any enlargement of the scope of the register will increase costs and decrease the target market for telemarketers.  For the first time, B2B telemarketing would be regulated.

In the United Kingdom, businesses can register and ACMA considers that the impact on telemarketing there has been acceptable.  We think that signals that ACMA will push for at least allowing small business to join the Australian Do Not Call Register.

From that point, they may as well go the whole way and include bigger businesses as well.  Numerically, they are a small proportion of all Australian business and the effort to ‘carve them out’ may hardly be worth it.  Besides, the bigger the business the less of a telemarketing target it is, anyway.

In this Spot Check, we’ll see if your outsourced contract for outbound sales calls complies with section 12 of the DNCR Act.

Section 12 of the DNCR Act is one of the simplest things in the Act to get right … which makes it amazing how often it is breached !

In a nutshell, section 12 says: If you get someone else to make outbound sales calls for you, and there’s a fair chance some of the calls may be to Australian residential numbers, the telemarketer must expressly agree:

• to comply with the DNCR Act
• to take all reasonable steps to make sure their staff and agents do so.

Failing to include this term attracts financial penalties.

Does the ‘express term’ have to be in writing ?

No, but good luck trying to prove compliance if it isn’t in writing.

If you comply with section 12, is that all the outsourced telemarketing contract needs to do ?

No, it’s not enough. ACMA considers that such contracts must include detailed processes for ensuring the telemarketer complies with the Act, and auditing that it has done so. In ACMA’s opinion, failure to include such processes in a contract can make you, the customer, liable for DNCR Act breaches committed by the telemarketer.