Stealth telemarketing - How sneaky can Corporate America be?

Corporate America has developed a sneaky way of telemarketing to you; in fact, you probably do not even realize that you have been telemarketed.  In order to find how these companies do this we first have to look at the FCC's definition of telemarketing.

According to FCC rules (CFR 64.1200):

The term telemarketing means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

The term telemarketer means the person or entity that initiates a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

So let's take a simple example of stealth telemarketing, the so-called dual purpose call.  Here is an example:

Hi Ms. Jones, this is Bill Smith calling on behalf of Citywide Cable quality assurance department.  I note that you had a service call last week and I wonder how the service was?  Could you tell me if the service person was on time and courteous?  <The telemarketer will listen to the customer comments and then will offer a product or service>  I am glad you are happy with the service you received.  You live in an area where Citywide offers many things besides cable TV service.  That simple cable carries much more than just TV.  We offer phone service that is much lower than the phone company and high speed Internet access as well... .

 

The telemarketing industry calls this type of call an "upsell."

Let's look at this typical dual purpose call.  Note that the caller claimed to be calling about the service call.  A careful review will reveal that the call was NOT placed by Citywide Cable but by a third party telemarketer.  How do we know this?  Look how he introduces himself: "Hi Ms. Jones, this is Bill Smith calling on behalf of Citywide Cable quality assurance department."  Note the term "calling on behalf of" or "for."  These terms tell savvy consumers that the call was not from the quality assurance department, but rather from a third party telemarketer.

This call clearly falls under the FCC's definition of telemarketing.

Let's look at another sneaky way that companies get marketing messages to you.

You call your credit card company to confirm a charge on your credit card.  You dial a toll-free (800) number that reveals your cell phone number to the company.  After a couple of key presses to route you to the right department you are told that you are waiting for the next available agent.  While on hold, the bank plays pre-recorded marketing messages to you.

How can this be telemarketing?  After all, you called the bank, the bank did not call you--right?  Again we need to look at the FCC's definition of telemarketing.

The term telemarketing means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

So let's review.  You placed the call to your credit card company, they captured your number and most likely know that you are on their do not call list or you are calling from a cell phone.  You initiated the call but they initiated the message and thus the call falls under this definition.  One California Court has ruled on this issue.  In West v Superior Court, the judge ruled that:

"[I]n any upsell, the seller or telemarketer initiates the offer; it is not the consumer who solicits or requests the transaction. This means that the consumer is hearing the terms of that upsell offer for the first time on the telephone. The consumer has not had an opportunity to review and consider the terms of the offer in a direct mail piece, or to view an advertisement and gather information on pricing or quality of the particular good or service before determining to make the purchase. This makes an upsell very much akin to an outbound telephone call from the consumer's perspective, even when the seller

is someone with whom the consumer is familiar." (Federal Trade Commission, Telemarketing Sales Rules, 68 Fed.Reg. 4580, 4597 (Jan. 29, 2003) (FTC Telemarketing Sales Rules), italics added.)

We agree with the Federal Trade Commission; an upsell is like an outbound telephone call and therefore this case is similar to the AT&T case.

That music on hold that contains advertising is a violation of law if you are on the company's do not call list, or are calling from a cell phone.  Corporate America has lots of lawyers and they know that it is illegal, yet they do it all the time.

We here at C.A.T.S. will be testing the law soon in court and will give you the results.