Businesses that put their telephone numbers on the Do Not Call Register will be allowed to nominate specific industries they want to receive marketing phone calls or faxes from, under new rules announced by the Rudd Government.
But the proposal has been slammed by Australian Direct Marketing Association chief Rob Edwards, who has accused the Government of failing to consult with industry on the nomination model and failing to understand how commerce actually works.
The Government, which introduced the amendments to the Do No Call Register Act laws last week, says the new nomination system is a response to concerns that an “all or nothing” approach to allowing businesses to list on the DNCR could “limit competition and stifle innovation”.
“To address these concerns, the bill contains an additional consent mechanism that allows businesses to list their number on the register and continue to receive telemarketing calls or marketing faxes relating to specific industry classifications,” Federal Infrastructure Minister Anthony Albanese told Parliament late last week.
“It allows marketers to continue contacting individuals or businesses that have expressed an interest in hearing about the products or services in their industry classification.”
The nomination process will also be extended to consumers already listed on the DNCR.
The Government said the nomination model was established after consultation with the direct marketing sector and other industry participants.
“For small businesses in particular, this model will only allow relevant and targeted marketing faxes or calls. It will prevent the interruptions caused by unsolicited or unwanted telemarketing calls or faxes in businesses that cannot afford to waste time dealing with them.”
But Rob Edwards from ADMA has questioned the level of industry consultation and slammed the proposal.
“It’s something they’ve dreamt up in a vacuum somewhere. There’s been little or no consultation on this issue, and that’s our concern,” Edwards says.
“The model assumes that businesses know in advance the goods and services they want to know about. It doesn’t work like that. Your business changes and your wants change. “
Edwards says that while the Government appears to believe that the new laws will curb problems in the telemarketing sector, it has badly underestimated the impact that allowing businesses onto the DNCR will have on the wider economy.
“The Government keeps talking about the business-to-business telemarketing industry. There is no such thing. This is just commerce – this is the way businesses go out to the market.”
The Government has also rejected suggestions that the compliance costs associated with the list could run into the hundreds of thousands of dollars.
Preliminary research conducted by Access Economics on behalf of the Australian Direct Marketing Association suggested the costs of establishing “comprehensive IT compliance system could range from $50,000 for a medium-sized business to $2 million for a large business”.
However, Albanese compliance costs are expected to be in line with the costs that telemarketers incurred with the introduction of the original Do Not Call Register.
“For example, the current cost to check 20,000 numbers against the register is $78 per year,” he said.
He has also questioned whether the impact on the direct marketing sector will be as bad as first thought.
“A 2008 independent study conducted by the call centre industry found that 90% of call centres surveyed experienced no change in gross revenues following the introduction of the original register, and none experienced decreased gross revenues.”
However, there will be a cost to the direct marketing industry as a result of the changes. The Government says the addition of businesses to the DNCR will cost $4.7 million over four years and $3.5 million of this will be borne by the industry in the form of access fees.
Rob Edwards says the next stage is for the changes to go before a Senate committee, where the ADMA will seek to have its views known.
“We’re hopeful commonsense will prevail.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
