Comments to the ACCC on ADMA's proposed Code

(Updated 9 December to link to the HTML version of strategy.doc: strategy.html .)

For the Australian Competition and Consumer Commission, with a formal accompanying letter, in response to the ACCC's Draft Determination on ADMA's Code of Practice.

20 October 1998 Robin Whittle  11 Miller St Heidelberg Heights Vic 3081
Ph 03 9459 2889  Fax 03 9458 1736  WWW:  Email

This submission is available on the Web from and is being supplied to the ACCC in printed form, with photocopies of the ADMA 1992 survey documents and a printout of strategy.doc.

These comments are intended to achieve several purposes:
  1. To show why the ACCC's consideration of ADMA's application should be revisited and why the matter should be discussed more widely and publicly, starting with a meeting of interested parties.
  2. To document for advocates, direct marketers, and other interested parties (such as market researchers) some of the problems caused by outbound telemarketing and how these can and should be solved by appropriate government regulation and/or self-regulation.
  3. To propose in detail (Appendix 2) an Australia-wide independent opt-out scheme for outbound telemarketing, which is elegant, cost-effective and has no obvious privacy problems - in contrast to the extreme privacy problems of ADMA's current opt-out schemes.  A similar scheme could be implemented for direct mail, and another one for market research calls.
Because of the short time-frame, and the fact that this is a volunteer effort, these comments are far short of a complete critique of the ADMA and ACCC documents.  They are a a subset of the material that could be written on telemarketing - based on my involvement in the debate since the start of 1992.

        - Robin Whittle


This prints nicely from Netscape with A4 paper and File: Page Setup Right margin = 3cm and the others = 1.27 cm.


Key issues in brief


(Four appendices follow.)


Appendix 1  ADMA's 1992 Survey showing at least 70% of people find outbound telemarketing unacceptable

For those reading this via the web, please refer to the page at:  adma-survey/

The Paper edition for the ACCC contains a print out of that page and photocopies of the survey results pages I received from ADMA for the nine question survey of 1,204 people.




Appendix 2  Implementing a national, independent opt-out scheme for outbound telemarketing

This is based on work I did in 1992 as part of my submissions to the Austel Privacy Inquiry.  The same principles could apply to:


Functionality for individuals and businesses

Functionality for telemarketers

Overview of the system's operation

The published database reveals no private information


Appendix 3  Where does outbound telemarketing sit in the scheme of things?

Chart showing telemarketing, direct mail, door-to-door sales and junk faxes Chart 2: Consumer acceptance of various advertising approaches
Chart 3: Retail Shops and Inbound Telemarketing
Chart 3: Retail Shops and Inbound Telemarketing

Appendix 4 Why outbound telemarketing should be minimised or eliminated

This is a slightly updated version of the Consumer Telecommunications Network Position Paper for the AUSTEL Mobile Churn Committee in March 1995.  There is some overlap with other material in these comments, but in the time available, I cannot create a perfectly polished, comprehensive, analysis of all the relevant issues.

1 - Outbound telemarketing has no benefits for the consumer over other less intrusive
means of promotion.

Unsolicited faxes, or visits from sales people are at least as intrusive.  Newspaper, magazine, TV and radio ads can all carry a toll free number.  These are more informative, non-intrusive and gives the consumer the opportunity to contact the company when they choose.

Direct mail (mass mailings of personally addressed promotional material) and letter-box drops (to everyone in the street who does not have a no-junk-mail sign) are more informative and less intrusive than an unsolicited phone call.  These are a far more widely used way of contacting potential customers than outbound telemarketing and much more accepted by consumers.

(The advantage of outbound telemarketing to the seller is that they can fish for customers who are just about to buy something, or that they can trick or cajole them into buying or donating.  These are to the customer's detriment. Outbound telemarketing is expensive - it can typically only survive when selling things at a high profit margin, or accepting donations for a high commission.)

2 -  Most people hate getting outbound telemarketing calls.

ADMA's own 1992 survey  shows that 70% of people who respond to a market research phone survey find it unacceptable.  An even greater proportion of elderly and housebound people find it unacceptable.  Assuming a 70% response rate to the survey, and that the 30% who rejected it would also find telemarketing unacceptable, this means that 79% of people reject telemarketing.  There are many reasons:
  • It is an interruption which offers no benefit to them.
  • They cannot defend themselves from receiving or answering the call.
  • The call is an unwanted use of the person's telecommunications equipment.
  • Personal space is violated by any phone call, but people have phones on the basis that the calls are going to be of value to them.  Telemarketing calls have zero or negative value.  Some apologists try to distinguish between intrusion and privacy - but intrusion is a subset of the issues that people describe with the word "privacy".  The use of someone's personal details for an unauthorised purpose, or an interruption to their home or work life is an invasion into the space which people manage - the personal space which is very close to them and feels like part of them.  Outbound telemarketing systematically invades the personal space and the minds of millions of people.  This personal space, and the feeling that you control what you are thinking about as you wish, is essential to happiness and sanity.
  • The calls happen without warning at almost any time.
  • Their pleasant greeting to the person who called is wasted on someone who is being paid to manipulate them.  The telemarketer often seizes the greeting as the key into their spiel.
  • This causes people to be less willing to be pleasant when answering the phone, and to turn nasty when a suspected telemarketer calls.  Sometimes this is inappropriate - I have become hostile to a hapless person from my bank who called me, and whose manner was similar to a telemarketer's.
  • It is extremely frustrating to be annoyed by someone who is (typically) totally insensitive to almost anything you say.  Within seconds they will be annoying someone else.  Telemarketers become inured to the protests, pleas and abuse they receive.  One telemarketer I spoke to felt sorry for herself - she said she was was just doing her job, and was polite.  I said her manner of speech was polite but her action in calling was the opposite of politeness.
  • Because telemarketers tend to call again, one reasonable approach to them is to be really unpleasant so they are less likely to try later.  This has the advantage of upsetting the staff, increasing staff turnover and costs and reducing the likelihood that the company will continue telemarketing.  The disadvantage is that ordinary pleasant people have to adopt an unpleasant approach at a moment's notice to defend their peace and quiet.  This ends up being an upset to their mental peace and quiet anyway.
  • Normally when someone calls, they are being themselves.  A telemarketer is not being themselves and it is often impossible to converse with them normally.  They are actors, reading a script, and could have a supervisor listening in or standing behind them.  So the consumer's interest in telling the telemarketer to get lost also may cause upset  to the telemarketer and threaten their employment.  It is often difficult to get a straight answer from a telemarketer, since their aim is to follow their script and get money from you.  I once received a telemarketing call from a friend who was working for a finance company. The tone of her call indicated no friendship or familiarity, so I played along with it as if I did not know her, assuming she had a supervisor monitoring the call and that it was a fluke that one of the people she had to call was a friend.
  • Telemarketers may leave long-winded messages on answering machines - which have to be listened to so you can get to the next message.
  • Telemarketers leave messages on answering machines, with just a name and a number asking the person to call them back - so the person is tricked into wasting time and money calling them.
  • 3 - There is no way of knowing for sure who the telemarketer really is.
    This makes it imperative that consumers be encouraged never to divulge personal information to callers of any kind who they do not know.  An industry which telemarkets its potential customers invites criminals and pranksters to call them as well - creating disruption or defrauding the customers and/or the company.

    No such problem exist for inbound telemarketing, where the customer calls a well publicised number when they want to find out more about, or buy, a product.

    Any industry which has legitimate products or services and an interest in its long term reputation should avoid telemarketing:

  • To avoid giving openings to callers who pretend to represent the company.
  • To avoid associating their product with the cheap products, inflated prices and/or manipulative sales techniques which are commonly associated with outbound telemarketing.
  • 4 -  The use of answering machines as a defence against telemarketing (and other unwanted calls) ties up the phone lines and delays communication between people.

    5 -  The pressure of telemarketing (and other unwanted phone calls) leads people to defend themselves with unlisted numbers - "silent lines".

    Around 1992, 12% of Australian subscribers had unlisted numbers, (the 1998 figure is generally thought to be 15%, or a million customers paying Telstra $32 a year to keep their number and address out of the white pages) the figures for the USA and California were 40% and 55%.  In early 1995, Michael Pickering (Privacy - Telstra) said that 16% of residential subscribers had "silent lines".

    This leads to greater difficulties for people who want to find someone's number for legitimate reasons (including emergencies), and to extra costs for phone companies in running the 013 service.  (This is the justification Telstra gives for charging extra for "silent lines" - but Minister Michael Lee initiated an investigation into this charging and I understand no proper justification was ever found.)  Changing to a new number for a "silent line" causes disruption for many people, and the people who inherit the old number may receive calls intended for the person who first had the number.  In addition, the new unlisted number may inherit phone calls (including telemarketing calls) directed at its original owner.

    This is (was) exacerbated by Telecom (Telstra) selling telemarketers lists of numbers which are deliberately out of date.  Although numbers are left unused for a year (?) before being used as "silent line" numbers, the out-of-date telemarketing lists mean that calls are still made by telemarketers to these numbers. (1998: I am not sure whether Telstra still sells lists of residential customers.  It certainly does actively market its own CD-ROM Yellow Pages product which is specifically designed to facilitate outbound telemarketing to businesses.)

    6 -  Telemarketing (and other unwanted calls) contributes a great deal to the demand for Calling Number Display - which has huge problems with privacy and efficiency.

    In fact, CND is virtually useless as a defence, but that is not the way people feel when they first hear of CND.  So they may not understand consumer advocates who warn against the complications of CND.  They may think "I should have the right to see the number of the person who calls me before I decide whether to answer their call."  CND's problems are documented in The Diagrammatic Overview of Telecommunications Privacy and Quality and notes and in a separate set of notes on CND and at http// .

    7 -  Telemarketing inevitably leads to some incidence of SUGging - Selling Under the Guise of Market Research.

    This makes consumers inordinately suspicious of anything which seems to be a survey. This reduces the response rate of market research phone surveys.  One problem is that this increases the cost of market research phone surveys.  (Disillusionment may also make it difficult for other types of survey as well.)  A more serious problem is that the sample of people who do respond becomes less representative.  Quite a lot of market research and social research is valuable to consumers, if only as an aid to formulating well informed public policy.  Telemarketers and SUGging telemarketers in particular create a serious problem for the market research industry.

    8 -  Telemarketing leads to greater distrust of sales people in general - increasing the costs for businesses in promoting products and hence increasing the cost of many products to consumers.

    9 -  "Charity" telemarketing inevitably leads to disillusionment with particular charities or charities in general.

    This may be partly because of the realisation later that the huge costs of the campaign inevitably use up most of the money donated - or that most of the money goes to commercial operators.  A second factor is that someone who donates is inevitably called again - by the same charity/company or by another - due to the swapping of lists.  The telemarketers have nothing to lose and they continue until the donor is burnt out.  Almost everyone I have met who gave money at one stage to "charity" telemarketers eventually regretted it and decided never to donate again to them.

    I recently (1995) talked to a telemarketing company which licensed the name of a teenage cancer charity (CanTeen) and sold a pen and letter opener set for a $39.95 "donation" - with an invoice from the charity.  There was no mention in the call or the paperwork that any other organisation than the charity was involved, and yet the telemarketing supervisor confirmed (without apparent shame) that only $2 of that $39.95 goes to the charity.

    10 -  People get upset with Telecom (Telstra), the Government, Austel (ACA and ACCC) and the TIO for failing to protect them from a blatant abuse of their phone, and intrusion into their personal space.

    People will answer the phone, and interrupt their thinking and their activities to do so - based on the assumption that the call is from the 99.9% of the population who would only call a person if they expected the call to be welcomed.  Consequently people open their minds to whoever calls them.  Outbound telemarketing is a deliberate, direct invasion of people's minds.  Extreme anger and frustration results from this occurring without warning, at any time of the day or evening, time and again, year after year, while the authorities do nothing to prevent it.  (1998: As argued in my submission to the Senate Information Technology Committee the primary reason governments exist is to protect the public systematically and efficiently from things that they cannot protect themselves from as individuals.)

    11 -  Overall standard of decency are threatened by exposing the population to continuous attacks on their privacy and peace.   America is the obvious example.

    CTN member and professional market researcher Maureen LeBlanc reports that US citizens are in general much less concerned about other people than Australians are.  High levels of telemarketing there are probably both a cause and an effect of these lower standards of care - along with other factors such as prevalence of handguns. In Australia we now have ways of closing the door on telemarketing and stopping it from eroding our standards of what is normal, decent behaviour.

    It is particularly important to stop high profile companies like Optus and Telecom from doing it - their telemarketing makes it seem more acceptable to the many smaller businesses who are toying with the idea.  In the past, telemarketing was mainly conducted by fly-by-night businesses with dodgy products.

    (1998 - Telstra and Optus continue outbound telemarketing, but not with the intensity of the analogue mobile campaigns of the mid 1990s.)

    12 -  It is an expensive way of selling products, so increasing prices, and/or diminishing the quality of goods or services to consumers.

    13 -  The employment it generates is soul-destroying - typically with poor pay, poor conditions and no prospects for promotion.

    The skills of manipulation and the insensitivity required of a successful outbound telemarketer are virtually useless for any productive career.

    (1998: ADMA worked against a NSW union attempt to achieve $40k pa. wages for telemarketers.)

    Outbound telemarketing is the product of a small number of people making a lot of phone calls.  Each telemarketer upsets and wastes the time of thousands of people a week.  It detracts from national productivity.  It severely damages the reputation of those companies which conduct it.  Very few respectable businesses can handle this damage, and the phone companies are loosing badly in this regard.  In the long-run, telemarketing is only genuinely profitable for a small group of businesses who have no interest in consumers and do not need to be respected by the public.


    Update history

    Updates in reverse order: Robin Whittle  9 December 1998
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