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'Do Not Call' fallout: More spam?
Three big telemarketers deny they'll shift to e-mail, 'junk mail' after list is implemented.
July 2, 2003: 12:27 PM EDT
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - The 12.5 million Americans who have already said they don't want telemarketing calls may have to fend off sales pitches from other directions -- such as e-mail or snail mail at the front door.

A Wall Street Journal report Wednesday said telemarketers were looking to shift some of their sales efforts away from phone solicitations to other forms of marketing and advertising.

But at least three big direct marketers, AT&T, Sprint and Verizon said Wednesday that they won't step up alternative sales pitches such as e-mail and "junk mail" after the government's "do-not-call" list was overwhelmed by people flocking to sign up.

"AT&T has no plans to shift its advertising and marketing focus to direct mail," AT&T spokesman Bob Nersesian told CNN/Money. "We have a variety of ways , including Web-based and bill messaging, to advertise our service to our 40 million customers."

AT&T (T: up $0.32 to $19.50, Research, Estimates), the biggest long-distance phone company, said last week that it supported the national do-not-call list and did not see it affecting its existing relationships with its customers.

Sprint Corp (FON: up $0.40 to $15.35, Research, Estimates)., the nation's No. 3 long-distance service provider, said it too had no plans to boost direct mail or Internet advertising.

"We don't do a lot of outgoing telemarketing anyway," said Sprint spokesman James Fisher. "We now sell our products as bundles through our business ventures with AOL and through our partnerships with airlines. Direct mail and Internet marketing isn't really our main focus." AOL is part of AOL Time Warner (AOL: up $0.09 to $16.21, Research, Estimates), the parent company of CNN/Money.

Eric Rabe, spokesman for No. 1 local service provider Verizon (VZ: up $0.36 to $39.86, Research, Estimates) said the company did not expect to focus its advertising more intensively on direct mail.

"We sell our service to customers who call us," Rabe said. "Our view is that if people don't want to be called, they won't be good sales prospects anyway."

Some industry watchers have said that heavy users of telemarketing, such as phone companies, mortgage lenders, insurers and credit card issuers, could all take a hit once the new do-not-call list is activated this fall.

"We plan to shift into other communication mediums, and rely more heavily on traditional TV advertising and e-mail marketing," acting Chief Marketing Officer Todd DeYoung at insurer Allstate told the Journal. "We also plan to stimulate inbound call volume by doing more directed advertising and more direct mail."

According to the tougher regulations set by the Federal Communications Commission and the Federal Trade Commission (FTC), telemarketers who call registered households on or after Oct. 1 could face fines from $200 up to $11,000 a call. Consumers also have the option to sue telemarketers directly for up to $500 a call.

"I think this is terrific for consumers," said Howard Davidowitz, chairman of New York-based national retail consulting firm Davidowitz & Associates Inc. "Telemarketers will simply have to reallocate money to more direct mail, television, radio and print advertising."

If that does happen, the FTC said the bigger problems for consumers will be spam rather than junk snail mail.

"In terms of costs for telemarketers, bulk mailing is more expensive than making a phone call, while spam practically costs nothing," said Anna Davis, the FTC's director of congressional relations.

"Most telemarketers are selling genuine services and products whereas most spam is deceptive and fraudulent and virtually untraceable. There's no easy solution to spam. The telemarketing industry, consumers and the government have to work together to be vigilant."

"Direct mail is an annoyance, too, but the feedback we're getting from consumers is that they just throw it away," Davis said.

The Direct Marketing Institute (DMI) maintains a "do-not-mail" list, where consumers can register if they don't want to be sent catalogs and other unwanted advertising from its telemarketing and small business members, the FTC said.

But that list is not regulated by any federal agency. "At most the DMI can levy its own fine on members who violate the list's policy," said Davis.  Top of page


-- Senior writer Chris Isidore contributed to this story




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