Sustainability in Telemarketing

Just a quick note to say I'll be at the DMA's event on the Sustainable Future of Telemarketing today and the Wellcome Collection in London. I'll be speaking on Answer Machine Detection (AMD) and the implications of the latest Ofcom Statement on Persistent Misuse. Hope to see a few people there.

I'm even going to try and post a coupleof updates while I'm there (not while I'm speaking of course - that would be rude...).

Barclaycard "Boffed"

It's been a busy couple of days for regulators. Hot on the heels of the Lib Dems telling off for making automated marketing calls without consent, Barclaycard has been fined the maximum possible £50,000 by the regulator, Ofcom, for making silent calls with a predictive dialler from its call centres. Ofcom hasn't yet published the full details (the website says that it is preparing the details and they'll be published soon here) but it is clear from their press release that Ofcom consider this to have been the most serious case of abuse yet. And that's up against some pretty serious competition.

The offenses occurred between October 2006 and May 2007 - i.e. a whole 6 months after the rules requiring an information message, CLI and the 3% limit on abandoned calls were introduced in March 2006. I think a couple of things are intersting here.

Firstly, that an organisation the size of Barclaycard could allow this to happen. Banks, in common with all financial services organisations, have regulation and compliance issues effecting everything they do. This is not a double glazing firm - but a serious multi-national business. While implementing an information message was always the most difficult of the new regulations to comply with, and 6 months may not have been enough time to enable this change, switching on CLI and limiting the abandoned call rate to 3% of live calls would not have required a change to systems. I expect there'll be some tough questions asked as to how that was allowed to pass.

Secondly, Ofcom have clearly been riled by this case. I've spoken to people in Ofcom who have priavely expressed extreme irritation that within days of first investingating a complaint, the contact centres appear to be able to make themselves compliant - showing that there really had been no reason for them not to comply. This frustration has come out in pubic in this case. For a regulator to use language like "Had we not been limited by the statutory maximum, we would have imposed a larger financial penalty to reflect this misuse" in a press release is pretty strong stuff.

Ed Richards, Ofcom's new Chief, has clearly got the bit between his teeth on this matter. Good news for consumer, great news for call centres who take good practice and their committment to responsible dialling seriousy. Bad news for the bad guys. Here endeth the lesson.

Lib Dems Done

Well it would appear the Information Commissioner agrees with me! The Office of the Information Commissioner has, today, decided that the Lib Dem's automated calling campaign they instigated last week was direct marketing, designed to promote the Liberal Democrats, not to conduct legitimate market research.

The BBC even reported comments from the ICO that "The ICO has consistently made clear that the promotion of a political party counts as marketing.

"We have previously issued detailed guidance to all major political parties on this subject."

Perhaps even more telling, in the light of the recent Ofcom statement allowing messages not for marketing content, he also added:

"Many people find unsolicited automated calls particularly intrusive and annoying so it is important that any organisation making such calls ensures that individuals have given their consent before they are targeted."

You can see the press release here and the full enforcement notice here.

Good on the Info Comm for coming to such a quick judgment. Hopefully this will be a lesson to anyone else considering such a stunt. Automated outbound messages are so cheap and easy to do that they will become a complete menace unless kept in check. Anybody in any doubt should watch the Simpsons episode "Lisa's Date with Density" where Homer buys a second hand auto-dialler to call the fine folk of Springfield to try and get them to give him money. It may not be much of a lesson in Privacy Law, but it's very funny.

Automated Calling Gets Political

Being at Call Centre Expo where a big talking point was the new Ofcom guidelines and their prohibition of automated calling for marketing purposes, the news that the Liberal Democrats were planning to make a quarter of a million automated calls could have knocked most people there down with a feather.

The Lib-Dems, the party which campaigned vociferously against calls made by other political parties at the last general election, are claiming that the calls are not covered by the Ofcom Statement because they are "market research" not "marketing".

I think that there are two key questions here.

The first is that of whether this is a genuine market research call or not. Selling under the Guise of Market Research (or SUGGing ) is an often-used ploy by people wanting either to start a conversation with a consumer under false pretences, or to get around the "Do Not Call" regulations which mean that people registered on the Telephone Preference Service are not immune from receiving Market Research Calls.

I didn't receive one, but the media reports said that they were going to be from Nick Clegg with a 30 second message from him before launching into the touch-tone interview. That in itself is clearly promotion of the Liberal Democrats' aims. The Ofcom Statement published last week has a very interesting section defining a marketing call. In paragraph 4.5 it states:

"The concept of direct marketing that the 2003 Regulations rely on is very broad and applies not just to the advertisement of goods and services but also to the promotion of an organisation's aims and ideals. It therefore applies to political and charitable, in addition to commercial, organisations. However there may be types of unsolicited recorded messages sent by automated calling systems that cause annoyance or inconvenience but which, for whatever reason, fall outside the 2003 Regulations."

(The bits in bold are the relevant bits here).

Given also that the calls were announced in the context of the party conference and the leaders' speech, even if the calls were to pass the strict criteria for Market Research, they would appear to be part of a promotional or marketing campaign.

The second question is that of whether automated calls should be allowed in the context of market research. Personally, I have a big problem with automated outbound calling. It is so cheap to do that there could be so much of it as to make your phone almost unusable. Ofcom in its statement is also concerned that the abuse of automated calling systems will be watched carefully. I can not find anywhere any explicit guidance in the Ofcom Statement for market research and automated calling, and I think it will be interesting to see what the Information Commissioner and Ofcom rule in this case.

One thing is clear - people who use automated calling have a fantastic opportunity to seriously damage their brands. They can do that to a lot of people very quickly.

I think this story will run and run...

Ofcom's Big Bang Day

I woke up this morning full of excitement about the switch-on of the LHC at Cern, a throwback to my old physics days. I was a student when the last big particle smasher was turned on (LEP) and the LHC and the search for the Higgs Boson was already a glint in the professors’ eyes.

According to the latest news from Cern, LHC is working well and that illusive boson will soon be finally shown to exist (or not exist!) and I for one can’t wait.

Then along comes news of another big bang – Ofcom’s long awaited revised Statement of policy on the persistent misuse of an electronic communications network or service. Although seemingly innocuous at first glance, it contains some explosive phrases that could cause some pretty big bangs in the outbound contact centre industry.

It has four main findings that I think are really significant.

Firstly, it effectively says that outbound call centres should not do answerphone detection, because of the issue of "false positive" detection where the system things the call has been answered by an answering machine and disconnects it, but in truth the call was answered by a live person. It doesn’t quite "ban" the technology in so many words, it actually says (in paragraph 2.23) “Ofcom’s intention is not to ban the use of AMD technology; we consider this could inhibit future innovation in this sector and would be intrusive. However, in the light of responses on the current accuracy rates for AMD technology, Ofcom recognises that at present, and until accuracy rates improve, it will be very difficult to use AMD technology without breaching the three per cent guideline. We consider this is proportionate, at least for the present, in light of the risk of anxiety caused to consumers from AMD false positives and that it may in fact act as an incentive for improved accuracy rates which should minimise the risk of possible consumer detriment.”

Combined with the next few paragraphs, this is basically saying “we don’t think you can comply with our rules and use AMD. If you think otherwise you’d better be bleedin’ sure of our facts mush”. It would be a brave company who soldiers on with AMD in the light of this. Anybody who’s interested in more on AMD can look at our white paper which you can get hold of here.

Secondly, Ofcom have changed the way that abandoned calls are calculated to take account of the fact that if you’re not using AMD, you can include all calls you pass to operators in the live call part of your calculation. This is a bit of a help to people will have to stop using it as it will help them “ease the pain” of transition.

Thirdly, there is a change in the definition of a campaign to widen the net; for example, allowing organisations to include calls made over multiple call centres for the same end result. Not sure how this helps a dialler manager – he or she will still have to try and hit the 3% rule, because they won’t know what the other centres are doing, but does provide some slack for the odd unplanned lapse.

Finally there is a ruling on the use of automated messages in service and collections. I’ve not really had a chance to delve into this in any depth, but anyone who tries playing recorded messages in the Grig household will soon find their contract terminated pretty pronto.

For Callmedia customers, we’ll be unpacking what this means for you and your system at our User Forum at the CC Expo next week – register here if you’ve not already done so. I’ll post again once I’ve had a chance to properly digest the news.

In the mean time, let’s hope any sign of that pesky boson is real, and not just another false positive….

Ofcom in Action Again

Earlier this week Ofcom, the UK's telco and broadcast regulator, named and shamed another call centre operator for making silent calls. This time it has gone for Barclaycard, a not insignificant brand, owned by Barclays, an even less insignificant brand. The details have yet to be made public but it adds to the major-league brands nailed by Ofcom (the others being Abbey and Carphone Warehouse).

I think three things are interesting here:

Firstly, despite all the publicity in the general media and specialist press, these large organisations still failed to take compliance seriously. We all know that implementing change in these big businesses can be like executing a 3 point turn in an oil tanker, but one would have thought that compliance in a financial services organisation might be able to pull some levers and make change happen faster.

Secondly, Ofcom are still investigating alleged misuse from 18 months ago - the period they've named Barclaycard for starts just six months after the first statement to regulate diallers was published on 1st March 2006. There may well be more to come.

Thirdly, the brief report on the Ofcom site says that "Ofcom has extended this programme of monitoring and enforcement for a further six months". It's not over yet guys!

While we await with baited breath the results of the latest consultation (now expected in early July) where issues such as Answer Machine Detection and automated calling (i.e. calling with a recorded message with no live person to speak to) are expected to be handled, it is still as important as ever to comply with the existing rules.

That's not just so you don't get caught, that's because it's the right thing to do - for fair treatment of consumers and for the long-term viability of the call centre.