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Thursday, 15 June 2006
Page: 42

Mr MELHAM (12:02 PM) —I am pleased that the government is finally listening to the cries from this side of the House to introduce a Do Not Call Register; it is not before time. Telemarketing has become something of a scourge in the First World, and I would like to consider today how it has developed. Telemarketing is the process of selling goods and services over the telephone. It has been used to market a variety of products ranging from insurance to newspapers to industrial equipment, and it has the potential for selling virtually any product. The use of the telephone as a sales tool dates back to the early 1900s. However, the full potential of outbound telemarketing was not recognised by business until WATS—wide area telephone service—lines came into existence in 1960. During the 1970s, telemarketing techniques became more refined and were incorporated into the marketing strategies of businesses of all sizes. Between 1981 and 1991, spending on telemarketing efforts grew from $US1 billion to $US60 billion. In 1997, telemarketing sales to consumers and businesses totalled $US425.5 billion.

Consumers these days have a negative perception of telemarketing because of untimely and annoying calls. Certainly this has been the case in Australia for many years. Complaints to my office have increased markedly over the past two years. This may well coincide with the increase in the number of call centres of Australian companies going offshore. It has also been the vehicle for a variety of fraudulent schemes or scams, including multilevel marketing and pyramid schemes.

There are two kinds of telemarketing: outbound and inbound. It is outbound telemarketing that this legislation is dealing with. Outbound calls present a marketing situation in which the telemarketer has the undivided attention of the prospect and can get immediate feedback. It has become very popular as a marketing tool across the world. Different jurisdictions have dealt with the telemarketing pest in various ways. Britain has had a do not call register since 1995, which began as a voluntary, self-regulatory scheme under which consumers could choose not to receive unwanted calls—similar to the service provided by the ADMA. In 1999, regulations were introduced whereby callers, including charities and political organisations, are prohibited from contacting those registered on the do not call list. By June 2005, over eight million people had registered.

In New Zealand, there are currently no laws protecting consumers from telemarketers. There is, as in Australia, an industry association, which promotes a code of ethics. In addition, in order to operate in New Zealand, telemarketers must obtain a permit from New Zealand Telecom. To obtain this permit, the business has to indicate that they will operate within reasonable hours, never phone after 9 pm, state the reason for the call and invite callers to hang up. It is perhaps not surprising that New Zealanders seem not to be as concerned as Australians are with intrusive telemarketers.

In the United States, privacy legislation was introduced in 1992 to protect consumers from telemarketers. This obviously proved insufficient. A national do not call register was introduced in June 2003. There are some exceptions, such as charities, market researchers, not-for-profit organisations and political organisations. By July last year, over 98 million Americans had signed up to the register. Although challenged by telemarketing corporations and trade groups as a violation of commercial speech rights, the national do not call registry was upheld by the US 10th Circuit Court of Appeals on 17 February 2004.

The reason I have provided this brief history of telemarketing is to simply point out that action against excessive levels of telemarketing has been taken all over the world except Australia—until the opposition raised it as an issue. The member for Chisholm introduced a private member’s bill into this House on 31 October 2005. It took the opposition to recognise the fact that Australians were fed up with telemarketers contacting them at inconvenient times. It has taken over seven months for the government to acknowledge that Labor and the member for Chisholm were correct and to introduce the Do Not Call Register Bill 2006 and the Do Not Call Register (Consequential Amendments) Bill 2006. Nonetheless, we do not wish to be ungracious; here it is, and it is about time.

Certainly I am aware of the high level of frustration in the community over this matter. I have received many calls, drop-in visits and letters in relation to the issue of unwanted telemarketing calls. As with many of my colleagues, I made an unwanted calls kit available to people in the Banks electorate. To date 250 households have sought copies of the booklet, which provides details of the current process for getting rid of unwanted callers. These booklets have been distributed beyond that 250 to friends and relatives in all parts of the community.

I should acknowledge at this point the Australian Directing Marketing Association, ADMA. In the ‘unwanted calls’ booklet, details were provided for people to contact ADMA to remove their names from the lists. ADMA made it clear that the prohibition could apply only to those telemarketing businesses which were members of ADMA. We also passed that on to constituents. I congratulate ADMA for this great initiative. I have since heard from constituents that their lives have been made considerably easier by ADMA members providing the do not call service.

Several of my colleagues have referred to the annoyance caused to families by nuisance calls at family bath time and meal times. One group not so extensively mentioned, and from whom I received a large number of enquiries, are the elderly. One lady contacted my office to tell her story. She is over 80 years old and suffers considerable problems with her legs. It is difficult to get around her home, but she insists on remaining independent. It is a nightmare for her to get to the phone when it rings. Her family are aware of this, so they roster calls to minimise inconvenience while keeping in contact; therefore, whenever the phone rang she assumed that it was an emergency. You can imagine the frustration and even pain she faced prior to using the service provided by ADMA.

I am also aware of a number of families who have purchased answering machines for their older parents, simply to allow them to filter out the unwanted calls. For others it has become tremendously confusing. Recently my office took a call from an elderly person who believed she was being offered a free holiday. Fortunately, the lady contacted my office and we directed her to the New South Wales Department of Fair Trading, which assured her it that it was a scam. Other examples have emerged over past months, with another couple coming to my office late one afternoon, desperate for relief after receiving five telemarketing calls so far for that day. Mr Joe Tewfik, Managing Director of ‘Contact 1-2-1’, commented that the increase in complaints is more than likely due to large corporations using offshore call centres. This meant that, with the cheaper labour costs, there was an increase in the volume of calls.

It comes as no surprise to me that the telemarketing industry itself has called for action. The current situation is covered by a myriad voluntary codes, state and territory laws and Commonwealth law. This has only led to inconsistency and confusion. As with any industry, telemarketers need consistency in regulation. It also ensures that the telemarketers do not waste their resources on people who are not interested in dealing with them.

I note the comments from ADMA’s chief executive, Mr Rob Edwards, published in the Age on Saturday, 15 April. He said that he did not believe the register will push telemarketing work overseas. Mr Edwards said that the penalties to Australian companies would be imposed regardless of whether the company used a local or offshore marketing provider. The explanatory memorandum for these bills takes us through the various options available to the government to deal with telemarketers. These include:

1.   Do Nothing;

2.   Co-Regulatory Approach ...

3.   Establish an ‘opt-out’ Do Not Call Register and National Standards; and

4.   Establish an ‘opt-in’ Call Register and National Standards

These options were established from consultations conducted as a result of the number of complaints received by the Telecommunications Ombudsman and Telstra.

The Department of Communications, Information Technology and the Arts released a discussion paper in October 2005. The following is a summary of the submissions received from the government, as provided in the explanatory memorandum. Twelve submissions were received from small business and organisations representing the interests of business that do not use telemarketing. The trend was supportive of a Do Not Call Register, though they did not support a self-regulation scheme. Many small businesses indicated that unsolicited telemarketing call approaches are time consuming and costly for their businesses as they use valuable resources that congest fax and telephone lines, potentially resulting in loss of business opportunities. Twenty-eight submissions were received from charity organisations and organisations representing the interests of charities. The trend was supportive of a Do Not Call Register that included exemptions for charities and telemarketers operating on behalf of charities.

Thirty-two submissions were received from telemarketing organisations and businesses that use telemarketing and organisations representing the interests of telemarketers. The trend was supportive of a Do Not Call Register, noting that self-regulation is a suitable solution with concerns about the cost of operation, compliance issues and possible loss of jobs. Eight submissions were received from telephone carriers and organisations representing the interests of telephone carriers. The trend was supportive of a Do Not Call Register and exemptions for existing business relationships, noting that domestic companies should be accountable for overseas telemarketers acting on their behalf.

Five submissions were received from consumer groups. They expressed total support for a Do Not Call Register and for regulating offshore telemarketing, but did not support exemptions and maintained that consumers and small business should not have to pay a fee to be included on the register. Eight submissions were received from federal and state government agencies. The trend was supportive of a Do Not Call Register, with the majority supporting an opt-out register. The Office of the Privacy Commissioner noted that prohibition of unsolicited telephone calls is an important step towards regaining individual control and that the most important objective for the register from a privacy perspective is the handling of personal information.

Twenty submissions were received from special interest groups. The trend was supportive of a register, with the majority supporting an opt-out register. Submissions noted the negative effect of unsolicited telemarketing on the elderly, as they are particularly vulnerable to this form of direct marketing, as I have already noted. Three hundred and seventy-seven submissions were received from individuals supporting the establishment of a Do Not Call Register.

One submission was received from the Telecommunications Industry Ombudsman supporting the establishment of a Do Not Call Register and noting that the number of complaints that the TIO received regarding telemarketing had increased significantly over the last year. The TIO preferred an opt-out register to include offshore calls and that certain organisations should be exempt.

The government has chosen Option 3—Establish an ‘opt-out’ Do Not Call Register. This is consistent with the evidence provided in the submissions to the DCITA discussion paper. Despite the unnecessary time wasting by the government in proposing this legislation, Labor is very pleased to support it.