The Challenge

By Deborah Gage  |  Posted 2003-11-01 Print this article Print

The legislative rush to curb telemarketing and spam makes it hard to sell electronically. Even if you keep your data clean, no silver bullet prevents lawsuits.

The Challenge

The challenge for companies is to find legal ways of selling to customers by phone or e-mail without harassing them. That means updating databases to exclude specific names from marketing pitches, based on policies that differ across states—and even countries.

"A company trying to make all its databases comply with all the rules has an overwhelming process task," says Bill Blundon, chief marketing officer of Extraprise, a Boston-based technology-services firm with several multinational clients. "People are really scrambling to figure out what to do."

Some companies, gun-shy for fear that anything they say could be used against them in court, are even refusing to discuss their plans to comply with laws to stop telemarketing and e-mail abuses. Case in point: Allstate Insurance. The company went mum after the Institute for International Research—a company that holds industry conferences—circulated an e-mail interview with Allstate vice president John Hershberger characterizing Allstate as unprepared for Do Not Call. An Allstate spokeswoman says the company is complying with the law and has no further comment.

"We brought this on ourselves—it's all telemarketers' faults," says Scott Stawski, vice president of the marketing consultancy Inforte. "We must find less-intrusive ways to sell."

Analysts and consultants say it's difficult to prepare for these laws because they raise enough questions to make court challenges inevitable. For example, companies are puzzling over the meaning of California's requirement that residents cannot be e-mailed without "a clear and conspicuous request" for recipients' consent.

A seminar on Do Not Call held in London last month by Extraprise drew hundreds of people—including lawyers networking to see how well peers understood the laws. Extraprise is advising all clients—even those who do business only in the U.S.—to abide by the European Union's privacy laws, which are being mimicked in much of the world. The E.U. starts from the premise that customers own their personal information and businesses need their permission to use it. The E.U.'s latest privacy directive—which member countries were required to adopt on Oct. 31—prohibits e-mail marketing without consent and establishes a private right-of-action similar to California's.

"[These laws] get to the fundamental nature of our society," says Bill Blundon. "The U.S. has been fairly generous with freedom of speech, but now a lot of tactical decisions are changing the philosophy of how business communicates with the world."

Senior Writer
Based in Silicon Valley, Debbie was a founding member of Ziff Davis Media's Sm@rt Partner, where she developed investigative projects and wrote a column on start-ups. She has covered the high-tech industry since 1994 and has also worked for Minnesota Public Radio, covering state politics. She has written freelance op-ed pieces on public education for the San Jose Mercury News, and has also won several national awards for her work co-producing a documentary. She has a B.A. from Minnesota State University.


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