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Wednesday, 21 June 2006
Page: 30

Senator EGGLESTON (11:28 AM) —Telemarketing calls are very much one of the scourges of the modern world and, in recent years, they have grown at an alarming rate. The Commercial Economic Advisory Service of Australia has estimated that in 2004 there were over one billion telemarketing calls made from Australian call centres.

The government, in responding to community concern, has introduced this legislation to establish a national Do Not Call Register. I think Senator Wong’s remarks in her contribution earlier about the government’s position in addressing this problem were rather gratuitous and unnecessarily self-serving. There is similar legislation in other countries such as Canada, the United States and United Kingdom. The issue of telemarketing is one which is widely recognised as a problem, and the Howard government has moved to deal with it in Australia with this legislation.

The Do Not Call Register Bill 2006 and the Do Not Call Register (Consequential Amendments) Bill 2006 were referred to the Senate Environment, Communications, Information Technology and the Arts Legislation Committee for inquiry and report, as Senator Stott Despoja stated. I chaired that inquiry. No public hearings were held but the inquiry was conducted on the basis of submissions received, and more than 200 submissions were received.

Under the legislation, account holders and their nominees will be accorded the right to opt out from receiving telemarketing approaches by placing their fixed line and mobile phone numbers on a do not call register. Once a telephone number is registered, telemarketers, except those who are exempt, will be prohibited from contacting a registered number unless they have prior consent. In order to be included on the register, a telephone number must be used or maintained primarily for private or domestic purposes. This effectively precludes small businesses from including their numbers on the Do Not Call Register. This has been done on the basis that many small businesses advertise their telephone numbers for the purpose of attracting additional businesses, and businesses commonly contact other businesses for a myriad of purposes during the course of their day-to-day operations. Accordingly, the government decided that it was better not to potentially expose organisations to fines and penalties for ordinary business to business contact.

The advantage of the opt-out model proposed in this legislation is that it will create efficiency gains for telemarketers in that it will allow them to better target people who are receptive to their calls. It is expected that there will be one million registrations in the first week of the Do Not Call Register’s operation and four million more during the first year. Importantly, given the increasing utilisation of overseas call centres, especially in India, the Do Not Call Register will also apply to calls made from overseas telecentres to an Australian number. Where calls are made from an overseas number on behalf of an Australian company to a telephone number on the register without consent, the Australian Communications and Media Authority can pursue the local organisation that the telemarketer is calling on behalf of. The Do Not Call Register Bill will not have the effect of completely eliminating telemarketing calls but it will substantially eliminate the most annoying unsolicited calls received by consumers.

Submissions to the committee’s inquiry were generally supportive of the concept of a national do not call register, but a number of issues were raised. The issue raised most consistently in submissions was that around consent. Telemarketers will be able to call numbers on the Do Not Call Register if the relevant account holder or their nominee has consented to the call either expressly or by inferred consent. The committee heard concerns that calls made to people with whom a caller has an existing business relationship are not adequately protected under the bill.

Arguments were put to the committee that the concept of inferred consent in the context of an existing business relationship is too narrow and uncertain. On this basis, there were calls for existing business relationships to be given an express exemption from the register, as applies in the USA, the UK and Canada. The committee, however, did not believe that such an exemption was appropriate, because it would significantly curtail the effectiveness of the register. Simply because an organisation can establish an existing business relationship does not mean that it would be reasonable to infer that a person has consented to receiving all telemarketing related calls from that organisation. In particular, there is a fundamental difference between a customer that has accounts or contracts with an organisation and a one-off casual purchase from that organisation.

As the department told the committee:

Under the proposed Australian model, businesses would be able to call individuals on the Do Not Call Register with whom they have a relationship as long as it would be reasonable for them to infer that the individual has consented to the call.

The explanatory memorandum explains this further:

The extent of the consent will be a matter of fact to be determined on the particular factual circumstances.

The committee was of the view that this approach provides sufficient protection to both businesses and registrants. Businesses may continue to contact their clients, but only when it would be reasonable. Moreover, if a registrant wanted to receive telemarketing calls from a particular organisation, there is nothing to stop that registrant from expressly consenting to receive calls from that particular organisation. On this note, some submitters outlined their concern that express consent would be valid for a period of only three months. This appears to arise from a misreading of the bill. Three months is effectively the default period. Schedule 2 of the Do Not Call Register Bill clearly states that express consent is taken to be granted for three months only if a different time period is not agreed to by the consumer. This means that consent could be agreed to indefinitely until such time as the registrant revokes it.

Another concern raised was that the register will be a register of phone numbers rather than of individuals. The primary reason for this is to protect the privacy of individuals on the register. As the department told the committee:

A register based on numbers ensures that the only consumer information that telemarketers will be able to receive from the Register will be the telephone number of the registrant. No corresponding name or address will be released.

It is also worth noting that this is the approach taken in both the United States and the United Kingdom.

The bill places the decision of whether or not to be on the Do Not Call Register in the hands of telephone account holder, rather than individuals. Concerns were raised that, in the context of households, the decision of an account holder to place their telephone number on the register will prevent other people in the household from consenting to receive telephone calls. On the basis that it is the telephone account holder that is responsible for paying the bill, the committee felt this was a reasonable outcome. Even though one person living in the household might consent to receiving calls, others may still end up answering the phone. After all, when a phone rings, it does not identify who in the household the call is for. Moreover, the committee did not receive any complaints from individuals opposed to the Do Not Call Register on the basis that they would not be able to receive telemarketing calls.

The bill also contains a mechanism by which people who are not the account holder but are sharing the same house as the account holder can consent to receive telemarketing calls. The legislation allows the account holder to make other people nominees. A telemarketing call to a number that is on the Do Not Call Register is acceptable if a nominee of the account holder consented to the call.

The Australian Direct Marketing Association expressed concern that a telemarketer would not be able to verify whether an individual is a nominee or not. However, the committee felt that there are a range of ways in fact that they will be able to verify this—for example, they could ask the person consenting to receive telemarketing calls if they are the account holder or the nominee; they could contact the account holder and ask if the person is a nominee; or they could request a copy of a written nomination. Moreover, where a person claims to be the account holder or nominee and turns out not to be, telemarketers will be able to avail themselves of the defence of using reasonable precautions and exercising due diligence.

Another provision of the bill allows a nominee to apply on behalf of the account holder to place a number on the register. Under the bill, consent for nomination can be provided either orally or in writing. The committee was concerned that this might be open to abuse and, accordingly, it has made a recommendation that, in order to ensure appropriate and legally certifiable authorisation, consent should be given in writing only.

Under the terms of the legislation, unless they are removed earlier, numbers will remain on the register for a period of three years before they will have to be reregistered. Some concern was expressed about this requirement during the course of the inquiry. However, the committee was convinced that it is an unavoidable nuisance in order to ensure that the register remains relatively up to date. With approximately 17 per cent of the Australian population moving home each year, three years is considered an appropriate time frame to strike a balance between the need for accuracy of information and the need to require registrants to reregister each year.

Nonetheless, the committee is concerned that people need to be reminded of the requirement to reregister every three years and has, accordingly, recommended that the government examine options to ensure that telephone account holders receive an effective reminder prior to the expiry of their registration on the Do Not Call Register.

The legislation includes a limited number of exemptions for organisations that operate in the public interest. These include charities, religious organisations, educational institutions, registered political parties and nominated political candidates, as well as government bodies. This is in line with the successful do not call regimes used in both the United States of America and the United Kingdom.

The government considered that it is especially important that charities be exempted from the register. Telemarketing is an important means of raising funds and assists charities to provide worthy and much needed services and support to the community. The Royal Institute for Deaf and Blind Children, for example, said in its submission that in 2005 it raised $2.1 million from its telemarketed lottery sales.

The government considers market research and social research to have a genuine public interest benefit, and those calls that do not have a commercial type purpose within the meaning of the bill will not be subject to the Do Not Call Register.

It is important to recognise that individuals will still be able to make use of the private sector provisions of the Privacy Act, which means that they will still be able to ask many exempt organisations not to call them should they strongly object to such calls.

Optus made a submission to the committee which raised some concerns in relation to the penalties contained in the bill, including the provisions relating to compensation and the recovery of a financial benefit. In relation to single errors that result in contraventions over multiple days, Optus advocated:

that penalties should be imposed on a per incident basis rather than on a per call, per day (contravention) basis.

The committee has drawn these concerns to the attention of the minister and suggested that they be given due consideration.

Because consumers, regardless of whether or not their telephone number is on the register, will still continue to receive telemarketing calls, the legislation will enable the establishment of minimum contact standards to which all telemarketers must adhere, including all of those organisations that are exempted from the register. The standards will cover matters such as permitted calling hours, minimum information to be provided to recipients of calls and minimum requirements around the termination of calls.

The committee and the government believe these bills represent an appropriate response to the undoubted scourge of unsolicited telemarketing calls and I commend them to the Senate.