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Legal Aspects of Telemarketing

Marketing – The Legal Pitfalls

Telemarketing is a double edged sword; you have to handle it carefully and approach it objectively in order to avoid the pitfalls.

The power of telemarketing is derived from its personalisation and immediacy. In a sophisticated and depersonalised world, telemarketing is an extremely effective way of building prospect lists, closing sales and securing customer loyalty.

When a telemarketing team is employed correctly, the percentage of sales closed over the phone hits double figures as opposed to less than one or two percent typically associated with direct mail and other forms of marketing.

On the other side of the scale, however, a significant degree of customer antipathy has been created towards telemarketers. Fed up with cold calls from eager sales representatives, consumers are becoming increasingly more resistant than ever to being disturbed whilst at home.

Companies that undertake telemarketing and telesales now have to be more scrupulous in their approach to contacting businesses and consumers over the telephone. There are a number of legalities that apply to telemarketing so companies must abide by the legislation that governs this activity. There are also relevant industry codes of practice that do somewhat restrict telemarketing activities.

The Telephone Preference Service is an organisation run by the Direct Marketing Association. Consumers and businesses can register with the Telephone Preference Service in order to block cold calls. Consumers can subscribe to the Telephone Preference Service should they wish to opt out of receiving a sales or marketing calls from any company. Any organisation that plans to engage in telemarketing calls has to consult the TPS to ensure they are not contacting any registered consumers.

The Commercial Telephone Preference Service works in exactly the same way for businesses although many organisations are reluctant to register for this service as they may well miss an opportunity that is presented over the phone.

It is important that organisations consult the TPS before carrying out a telemarketing campaign because their activities are governed by the Telecommunications (Data Protection and Privacy) Regulations 1999. These regulations state that telemarketers should not call people that have indicated they do not wish to receive cold calls. If people on the TPS are contacted, companies are breaking the law and run the risk of legal action being taken against them.

Another pitfall that can catch a company out when performing a telemarketing exercise is the law relating to data protection. It is important that your organisation is transparent when requesting information from a prospect. If you are holding data in order to store it for future marketing purposes or share the information with a third party, you must request permission from the prospect and tell them exactly what you plan to do with their data. If your information is not just for research purposes only, do not tell a prospect that it is.

There are other codes of practice from trade associations that provide guidance on appropriate telemarketing in practice. These include stipulations such as not knowingly making outbound calls to minors and avoiding high pressure underhanded tactics.

There is also a limit to the number of times you can call a prospect without it being classed as harassment! Be sensible when calling a client more than a couple of times a day – make sure you have an efficient and up to date call logging system, such as a CRM, in place so that you do not get penalised for harassing contacts.

Make sure your members of staff are aware of the legalities when calling new or existing business opportunities otherwise your organisation could face fines running into thousands of pounds.