Canada must comply with U.S. registry: Analyst

By Lindsay Bruce

Network World Canada

Although Canada currently doesn’t have a mandatory do not call (DNC) registry, the impact of the legislation in the U.S. will hit Canadian call centres hard, both directly and indirectly, in coming months.

These comments were made by Ian Angus, president of consulting firm Angus Telemanagement Group in Ajax, Ont. during a teleconference hosted by Sprint Canada Inc. last month. Angus said that adhering to the U.S.’s DNC registry is essential for Canadian call centres doing business south of the border.

He added that the registry – which has been mandatory since Oct. 1 – carries a price tag of US$11,000 per call for all call centre operators that don’t respect the DNC list.

Angus noted that the main reason legislation across the border is affecting Canadians is because of the high number of Canadian call centres doing business with the U.S.

“In the first nine months of 2003, there were 52 new deals signed to bring call centre work to Canada potentially creating 17,000 jobs here,” Angus said. “For those centres and for the many U.S. focused centres that have existed for some time, complying with the U.S. DNC list is not optional.”

Angus warned Canadian call centres that if they don’t comply “rigorously above and beyond the letter of the law” they simply will not get U.S. business and their U.S. contracts will not be renewed.

“If an organization wants [a call centre] to call into the United States, to call U.S. consumers and doesn’t insist on compliance then [Canada] shouldn’t do business with them. They either don’t know what they’re doing, or they think that dealing with a Canadian call centre is a way of avoiding the U.S. law,” Angus added.

Angus said that the Canadian Marketing Association (CMA) – which hosts a voluntary DNC list for its members – until recently received an average of 5,000 new registrations per month. Since the U.S. registry began last June, however, the CMA is receiving an average of 5,000 additions per week.

According to a proposal made by the CMA to the Canadian Radio-television and Telecommunications Commission (CRTC) – which requested the CMA’s views on the subject – in Nov 2001, the CMA supports the idea for the Commission to set-up and monitor a mandatory DNC registry in Canada.

Currently the CMA’s voluntary registry is only used by CMA members, so although consumers may have signed up to the CMA’s list, they can still be called by non-association members.

According to the CMA, its proposal to the CRTC includes the following conditions: the DNC list would be compulsory for all telemarketers in Canada; Consumers would register for the service for a fee of $5.00 which would cover a three-year period; companies that subscribe to the program would be charged an annual fee ranging from $500 to $10,000; and the CRTC must develop an appropriate enforcement mechanism around the do not call service.

According to the CRTC, it will review the proposal made by the CMA and provide new guidelines and rules for telemarketers some time in 2003.

Currently, the CRTC’s rules on telemarketing say that telemarketers must maintain DNC lists for both telephone calls and faxes and provide customers with a fax or telephone number where a responsible person can be reached. Consequences that can be imposed today on telemarketers in Canada include having their telephone service suspended or disconnected.

Angus added that he would be surprised if the CRTC doesn’t issue a “very strong decision” by the end of this year. He said that although new legislation will probably be required from the government, this shouldn’t be a problem.

“This is unlikely to be a major barrier because voters want it. If there is not action soon, I think it will be a platform issue for one or more of the parties in next year’s federal election,” he added.

Angus warned call centres during the education session that although the fines for ignoring the U.S.’s registry are substantial, businesses that choose to ignore it have a lot more to loose than money.

“The fines are big but even bigger if you think about the management time, the legal bills and the bad publicity,” Angus said. “The cost of annoying a potential customer has just become very high indeed.”

Rick Frye, vice-president of corporate development for Gryphon Networks Corp. – which is already working with Sprint U.S. on the same project to offer the technology enabling Canadian businesses to comply with the new U.S. DNC legislation – said that it is essential for Canadian call centres to find ways to make sure that U.S. business interests are protects because it is ultimately the U.S. clients that are liable for any infractions of DNC calls.

Frye said that although rolling the dice and hoping for the best may have been a viable solution for telemarketers 10 years ago, it no longer is. He said that companies may elect to develop and manage an internal solution.

“For 55 million telephone numbers in the national do not call list, if they were printed on eight by 11 paper in four single-spaced columns, the stack of printed output would be about 90 feet tall. So, the chances of manually looking up do not call numbers before the call is quite obviously not going to be an effective solution, Frye said.

On top of any restriction the CRTC may impose, Dan Bowles, vice-president of the regulatory department at Toronto-based Sprint Canada – a wholly owned subsidiary of Call-Net Enterprises Inc. – said that the U.S. can enforce rules indirectly on Canadian operators not complying with the DNC registry.

Bowles said the U.S. could seize any American assets of the company including accounts due from American clients and “perhaps even go after the telecom companies carrying the call.”

One Canadian call centre agreed with Gryphon Networks’ Frye about the need to have strict business practices in place when dealing with U.S. clients.

Rick DesBrisay, president of Rainmaker Call Centres Inc. in Moncton, N.B., said that 95 per cent of the calls made by his call centre agents are going to U.S. consumers.

He said that Rainmaker – a telemarketing company that acts on behalf of a Seattle-based timeshare development company – has been complying with the U.S. national registry since it was implemented October 1, and has spent $100,000 to make sure the company is 100 per cent compliant.

“When the national do not call registry came in…we took the telephones off the desks of our agents so they cannot call a number, the computer does the dialing so it’s virtually impossible for them to call someone on the do not call list,” DesBrisay said.

He added that this system gives Rainmaker full security for two reasons: because numbers on the registry aren’t in the system and even if agents did manage to somehow get the numbers they couldn’t call them because they have no access to telephones.

“We also changed [what shows up on] our computer screens so the numbers are not displayed. The agents only have an access number, it takes a manager to find out what the client’s phone number is,” DesBrisay added.

He said that other than having to spend $100,000 on the new system, the DNC registry has been a positive transition for Rainmaker because they are now only targeting people that want to hear from them and avoiding all “slammers.”

“Slammers, people who just hate telemarketers and slam down the phone. Those are the people who were the very first to put their names on the do not call registry….We no longer are calling those people, so in fact, our productivity has gone up about 10 per cent because of the do not call registry,” DesBrisay noted.

He went on to explain that it is inevitable that Canada will implement its own national registry. He said that when this does happen, Canada should make it mandatory that the cost incurred by the registry comes solely from the pocket books of the consumers – unlike the U.S. registry that has business paying for the system.

“I believe that it should be your right to have your name put on a do not call blocking system, but the consumer should pay for that. They should be charged $2 a month or whatever it is going to cost to support that system rather than have businesses pay for it,” he said.

DesBrisay added that although he believes that charging companies for the registry is “an unfair treatment of the telemarketing industry” he conceded that “it’s in place, we are dealing with it and we move on.”