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Submission - Submission in response to the Do Not Call Register Statutory Review (October 2009)

• Introduction
• Questions regarding key elements of the legislation and the discussion of options
  • Opt-out
  • Consent
  • Registration Period
  • Exemptions
  • Research Calls
• Questions raised regarding the operation of The Register
  • Number checking process
  • Compliance with the Act
  • Education and Awareness
  • Industry codes and standards
• Conclusion

Related Galexia news Singapore to introduce privacy legislation and a Do Not Call Register - September 2011 » Galexia publishes submission to the DBCDE Do Not Call Register Statutory Review - 20 October 2009 » Galexia publishes international analysis of Do Not Call Registers - 8 September 2009 » Government to expand the Do Not Call Register - 29 May 2009 » Related Galexia services and solutions Specialised Legal and Regulatory Consulting. Read more » Cite as Galexia, Submission in response to the Do Not Call Register Statutory Review, October 2009, <http://www.galexia.com/public/research/articles/research_articles-sub06.html>.

Introduction

Galexia welcomes the opportunity to comment on the Statutory Review of the Australian Do Not Call Register.

In September 2009 Galexia completed a comparative study of six national Do Not Call Registers (Australia, Canada, India, Spain, UK, USA). This study noted that the Australian register was performing well in comparison with other jurisdictions. The study also noted that an international ‘best practice’ was emerging in relation to Do Not Call Registers. We recommend the study to the review team:

Connolly C, Emerging Best Practice in Do Not Call Registers (8 September 2009), World Data Protection Report, October 2009
<http://www.galexia.com/public/research/articles/research_articles-pa10.html>.

Overall Galexia believes the Do Not Call Register is delivering positive benefits to Australian consumers. We believe it should be expanded to cover a greater range of calls. We also recommend some minor changes to the operation of the Register.

Galexia submits that the current regulatory and business impact of complying with the Do Not Call Register is outweighed by the significant public benefit of less calls, less privacy intrusion, and less miss-selling.

Questions regarding key elements of the legislation and the discussion of options

Opt-out

Question 3.1.1 Are there ways that the opt-out structure of the scheme could be improved?

Ideally, telemarketing should be subject to an opt-in scheme. This would have substantial benefits for consumers, and businesses would know that they are targeting consumers who are willing to receive calls. One economic study has noted that there may be significant economy-wide benefits to the adoption of an opt-in approach.[1]

As the ‘opt-out’ approach adopted in Australia is not the optimal approach, it should be recognised as a compromise. This means that all of the other consumer protections in the Do Not Call Register should be strengthened (see below).

Consent

Question 3.2.1 Are there ways that express consent could be improved?

A registration on the Do Not Call Register should only be ‘trumped’ by consent in exceptional circumstances. The current test of consent is weak, as it allows businesses to hide marketing clauses in the fine-print of contracts or website terms and conditions.

One particular problem arises where a person is inundated with telemarketing calls from a specific company, and they decide to register their number on the Do Not Call Register. This is a convenient option for the consumer and it allows the consumer to avoid confrontation with the business. This can be important for many vulnerable consumers. However, if the consumer has at some point in the past signed a hidden marketing clause with that business, the calls will not stop.

For many consumers it will be easier to join a central Register rather than contact individual businesses and request an end to telemarketing calls. Contact details can be very hard to locate for many organisations, especially where they use third party telemarketing organisations to make calls on their behalf.

The test for express consent should therefore be strengthened to ensure that it does not result in an indefinite consent that over-rides the consumers’ registration on the Do Not Call Register. Some suggestions for strengthening the express consent provision include:

• Limiting all express consent to three months, with no exceptions;
• Including a test for the ‘prominence’ of the marketing consent clause;
• Prohibiting ‘bundled’ consent;[2] and
• Addressing systemic consent problems (for example where a single business is the subject of repeated complaints regarding consent).

Question 3.2.2 Are there ways that inferred consent could be improved?

Inferred consent is difficult to manage, as the concept itself is open to multiple interpretations.

The Australian Institute’s Josh Fear has noted that inferred consent is leading to some community disenchantment with the Do Not Call Register:

We also discovered that the Do Not Call Register, which was supposed to allow people to opt out of all unwanted sales calls, has been only partially successful. There are many exemptions to the Do Not Call regime, and many companies can still legally claim ‘inferred consent’ to make telemarketing calls to people on the Register... people are still receiving telemarketing calls under the new system, and many are alarmed at the unwanted intrusion into their lives and the use of personal details without their knowledge. They thought the problem was being fixed.[3]

The test for inferred consent in relation to telemarketing could be strengthened by a more precise definition of the term “existing customer”. This could be limited by the following provisions:

• Suppliers of goods
  Limited to consumers who have purchased an item within the previous 6 months.
• Suppliers of services
  Limited to consumers who have initiated contact at least once in the previous 6 months.

Registration Period

Question 3.3.1 Are there ways that the registration period could be improved?

The registration period is currently set at 3 years. The three year renewal requirement seems unnecessary as a person is unlikely to change their preferences regarding telemarketing.

This is one area where the Australian Do Not Call Register compares poorly with other jurisdictions. In the US the renewal requirement was dropped in 2007 and registration is now permanent. Registration is also permanent in India, Spain and the UK.[4]

A major problem with the renewal requirement is that it adds regulatory burden, complexity and expense to a system that is supposed to be simple and inexpensive. For example, Australia is approaching the third anniversary of the establishment of the Do Not Call Register and the Government will have to undertake an expensive education campaign to remind consumers to renew their registration. There will also be substantial costs and complexity in authenticating users who attempt to renew, especially where they have changed their email address or have forgotten which email address they used to register.

This process will be very ineffective and inefficient, as it is unlikely any registered consumers will suddenly wish to receive telemarketing calls. (In any case, a consumer can remove their number from the Register at any time if they have a change of heart about telemarketing).

It is also a significant concern that in the ACMA study of community awareness regarding telemarketing and spam (2009) consumers were clearly not aware of the renewal requirement.[5]

Overall, the renewal requirement has the potential to damage the reputation and good standing of the Do Not Call Register - for no obvious gain. Australia faces the same situation as that faced in the United States, where it was decided to abandon the renewal requirement shortly before the relevant anniversary of their scheme. This was a recognition of the costs and complexity that would result and the potential damage to the register (which is extremely popular in the US).

In other jurisdictions, the issues of obsolete information and relocating consumers are dealt with by simple updating tools - without the need for a complex renewal requirement. This means that only a few thousand numbers need to be reviewed each year, rather than millions. There is no evidence that any of the Do Not Call Registers in jurisdictions without renewals have become ‘clogged’ with obsolete information.

Exemptions

Question 3.4.1 Are the current exemptions appropriate and relevant?

The current exemptions may have been appropriate for the establishment of the Do Not Call Register, when it was a new concept and there was uncertainty about how it would operate in practice.

Now that the Register is working well, and telemarketing organisations are comfortable checking the Register for each campaign, the scope of exemptions should be reconsidered:

• Government bodies
  Government should not be in the business of forcing consumers to receive telemarketing calls. This exemption should be reviewed, although it does not appear to be a high priority issue.
• Political parties and candidates
  Political parties and candidates have numerous ways of communicating their policies and messages to voters, including advertising, post, publications and media coverage. If a voter has registered on the Do Not Call Register it is because they do not want to receive intrusive calls. A call from a political candidate is just as intrusive as a call from a telemarketer. Again, the wishes of consumers should be respected and these calls should be prohibited. There is no public benefit in this exemption and it is widely recognised in the community as an exemption applied by politicians for the benefit of politicians, without the best interests of consumers in mind.
• Educational institutions
  This exemption is restricted to current and former students - it does not appear to be a high priority issue.
• Religious organisations
  This exemption should be reviewed, although it does not appear to be a high priority issue.
• Charities or charitable institutions
  This exemption should be reviewed, although it does not appear to be a high priority issue.

Overall, the number of exemptions should be minimised. An alternative is to allow users to nominate to receive some categories of calls.

Research Calls

Question 3.5.1 Should ‘research calls’ be defined in the Act to clearly distinguish between calls with a commercial purpose and calls with a research purpose?

It is unfortunate that research calls need to be defined in the Act in order to avoid telemarketers exploiting a loop-hole by making dual-purpose calls. This is further evidence of the behaviour and attitude of some elements of the telemarketing industry.

Galexia’s recommendation is for the definition of telemarketing to be strengthened to clearly include multiple purpose calls, where any of the purposes include telemarketing (although it is plain and clear in the current rules). In addition, ACMA may wish to undertake some example enforcement action on this issue to help draw attention to this type of breach.

Questions raised regarding the operation of The Register

Number checking process

Question 4.2.1 Is the registration process effective and easy to use?

In our experience the registration process is easy to use and is working well.

Question 4.2.2 Is the washing process effective and easy to use?

In Galexia’s study of international Do Not Call Registers we noted that list washing represents international best practice.[6]

Question 4.2.3 Are there ways to improve either of these processes?

Both processes appear to be working well.

Compliance with the Act

Question 4.3.1 Are there ways that the complaints handling process could be improved?

The complaints handling process is working well. However, there may be some public benefit in ACMA publishing more statistical details on complaints. In particular it would be useful to see the number of complaints that fall outside jurisdiction and why. This may reveal categories of exemptions that are of public concern.

Question 4.3.2 Are the penalties in the Act appropriate and a sufficient deterrent?

The penalties appear to be appropriate.

However, there may be some public benefit in considering a more innovative approach to penalties. In many jurisdictions penalties of this type can be directed to the funding of relevant community organisations and community campaigns. This helps to ‘re-invest’ the penalties in activities that can be difficult to fund from other sources. The use of cy-pres orders may be very relevant in this field.

For example, if a penalty has been imposed because an organisation has been targeting indigenous communities with telemarketing calls, part of the penalty could be directed to indigenous community organisations. Similarly, if the telemarketing calls are form a mobile phone company, part of the penalty could be directed to an organisation representing the interests of telephone consumers.

Education and Awareness

Question 4.4.1 Do you have any comments on the education and awareness activities undertaken by ACMA?

Education and awareness activities by ACMA appear to be very low profile. In addition, there is little education or awareness raising activity by industry.

Despite this, the number of registrations is high - this probably reflects the level of community anger regarding intrusive telemarketing calls. The number of registrations in Australia (as a proportion of the population) is slightly higher than the international average:

 

Question 4.4.2 Is information on the Register easy to find and understand?

Information on the Register is reasonably easy to find. However, information on the registration period and renewals should be made more prominent (if the renewal requirement is to be retained).

Industry codes and standards

Important note: Galexia believes that there is a risk of abandoning the simplicity and effectiveness of the Do Not Call Register by pursuing some of the other issues discussed in the section on industry codes and standards. Many of these issues are a distraction from the real benefits that can be delivered by expanding the Register, promoting higher membership of the register, and removing unnecessary exceptions.

Question 4.5.1 Should industry codes and standards apply to organisations outside of the telemarketing industry that are causing telemarketing calls to be made?

The expansion of industry codes and standards to non-telemarketing organisations appears to be a low priority issue.

Question 4.5.2 Should the process for making industry codes and standards be faster, more flexible and more responsive to community needs?

The process for making industry codes and standards appears to be a low priority issue.

Question 4.5.3 Should the Register include additional rules requiring telemarketers to:
- keep records of their calls?
- keep internal do not call lists?
- limit the number and frequency of silent calls?

In relation to these three questions we believe a very simple approach should be taken:

• Record keeping should not be mandatory - the focus should be on not making the calls in the first place;
• Internal do not call lists should not be mandatory - the focus should be on the national Register; and
• Silent call marketing should be prohibited - this could be achieved by prohibiting the deliberate use of silent call marketing techniques, such as the inclusion of marketing information in the returned call message, and / or the presence of any instructions to staff regarding silent call marketing.

Conclusion

Question 5.1.1 Do you have any other comments or concerns about the Register?

Galexia supports the continued operation of the Do Not Call Register. We believe the statutory review has raised a number of relatively minor issues, and we are concerned that these may become a distraction from higher priority issues. Some of the proposals might also lead to increased complexity and costs in the operation of the Register, which has succeeded because it is simple and has a high public benefit and a low regulatory impact.

In Galexia’s view, reform of the Register should focus on:

• The immediate removal of the 3 year registration period and the complex renewal requirement;
• The rapid expansion of the Register to cover small business numbers and fax numbers; and
• The review and removal of some categories of exemptions.

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[1] Fear J, Go Away, Please: The social and economic impact of intrusive marketing, The Australia Institute, December 8, 2008 <https://www.tai.org.au/file.php?file=dp104.pdf>

[2] For a definition and discussion of bundled consent see Para 19.43 to 19.69 of: Australian Law Reform Commission, For your information: Australian Privacy Law and Practise, Report 108, 2008, <http://www.austlii.edu.au/au/other/alrc/publications/reports/108/>

[3] Fear J, Setting the record straight on telemarketing, Australia Institute, 2009, <http://www.tai.org.au>

[4] Connolly C, Emerging Best Practice in Do Not Call Registers (8 September 2009), World Data Protection Report, October 2009
<http://www.galexia.com/public/research/articles/research_articles-pa10.html>.

[5] Australian Communications and Media Authority, Community Attitudes to Unsolicited Communications, 24 August 2009, <http://www.acma.gov.au/webwr/_assets/main/lib310210/unsolicited_communications_report.pdf>.

[6] Connolly C, Emerging Best Practice in Do Not Call Registers (8 September 2009), World Data Protection Report, October 2009
<http://www.galexia.com/public/research/articles/research_articles-pa10.html>.

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