Industry News & Trends

FTC: Stop the phone spam (Robo Calls)

Is your dealership participating in pre-recorded messages that are delivered at certain points of a consumer’s buying/servicing process or mass-delivering a single message?  If so, listen up!

Back in August, the FTC made a new ruling on this type of marketing.  They basically said, as it applies to the auto biz, by December of 2008 there must be an opt-out message in these calls and by September 2009 the consumer must have opted-in specifically for these calls.  Exemptions apply to medications, non-profit organizations, and political calls.

Are you using OneCommand?  One of their tools is directly affected by this.  Some CRM providers and DMS systems also offer this type of technology, so find out if any of the departments within your store(s) is using something along these lines.  The fine is up to $11,000 per instance!

Other resources and references:

CNet Coverage
Digg String of consumer feedback
Do Not Call Information

Personally, I like more spam controls.  I’m a marketer, but I’m also a consumer.  I may be the minority, but if you annoy me with marketing messages, I’m not going to buy from you.  You’d have to win me back with an amazing deal.  I view a pre-recorded marketing message as an invasion on my time – something that interrupts my day because the message is typically untargeted.  I do agree with the service reminder calls, but when it comes to sales marketing, I view these messages as laziness on the retailers’ part.

Any other opinions out there?

Who knew an argument with Jeff Kershner, in 2005, would lead to Alex becoming a partner with him on DealerRefresh. Where will the next argument take ...
  • M
  • September 23, 2008
Totally agree with Alex on this one. Worst possible experience is to get a pre-recorded message I have neither the time nor inclination to listen to. 'Sides, more dealers should be thinking inbound vs. outbound marketing anyway.
  • J
  • September 23, 2008
Pre-recorded robo-marketing calls...the spaghetti factory. Throw as much on the wall as you can and see what sticks. In my opinion, the more you throw, the harder it is to get it to stick. I'm in agreement when it comes to this kind of stuff. First, if I get a call where a live person doesn't have the time to pick up the phone and call me themselves, I have no interest period. Second, if I get more than one of these calls from the same company, I don't care if you're giving away a free Prius at Checkered Flag ;) I'm not going to listen, and harassing me will cause me to buy a product/service anywhere else, even if it's more expensive. If someone is going to do telemarketing, appointment setting, or whatever, there is no substitution for a professional person who is able to set the proper tone.

These sort of automated calls are nothing short of laziness and put quantity over quality. Every phone sales job I've ever had has stressed quantity. I used to love the fact that I outperformed the dial-monkeys making 100 calls a day with my 20 calls a day, and I think 20 calls a day by a decent rep can still outsell some automated dial-monkey program making 1000 calls a day.

The only exception in my opinion would be service reminders like Alex noted.
  • L
  • September 24, 2008
Alex to put a finer point on your concerns over the newly revised TSR (Telemarketing Sales Rule), here are the points as I interpret them:
1. By 12/1/08 all customers must be given the ability to automatically opt out of any pre-recorded campaign by automated key press or voice mechanism and this must be delivered at the beginning of the message, 16 C.F.R. § 310.4 (b)(I)(v)(B).
a. EX: “This is an automated message from XYZ Dealership, you may opt out of receiving these messages from us at anytime during this call by pressing # or saying OPT OUT”
2. The requirement that an automated call answered by a person connect to a live attendant within two seconds of a completed answer, for least 97 percent of the calls.
3. However purely informational messages do not apply under TSR, and unless an exemption applies messages that incorporate any inducement to purchase goods or services are covered by the TSR.
a. Certain healthcare related messages are exempt: 16 C.F.R. § 310.4 (b)(l)(v)(D) provides that "this paragraph (v) shall not apply to any outbound telephone call that delivers a prerecorded healthcare message made by, or on behalf of, a covered entity or its business associate, as those terms are defined in the HIPAA Privacy Rule, 45 CPR 160.103." Additionally, the Do-Not-Call rules adopted by the FTC and FCC contain exemptions for live calls placed to customers with whom sellers or telemarketers have an "established business relationship" as defined in the rules.
i. The Telemarketing Act, at 15 U.S.C. Section 6106, defines the term "telemarketing" as "a plan, program, or campaign which is conducted to induce purchases of goods or services, or a charitable contribution, donation, or gift of money or any other thing of value, by use of one or more telephones and which involves more than one interstate telephone call."
In recent case In the most recent case, described in a January 29, 2008 FTC Press Release, the FTC entered into a consent decree with Voice-Mail Broadcasting Corporation (VMBC) and its owner, Jesse Crowe, who used automated dialers to "blast" consumers with prerecorded telemarketing pitches. The calls pitched products from debt-consolidation services to mortgage brokerage services and other retail and financial services. When VMBC's telemarketing calls were answered by consumers rather than answering machines or voicemail systems, VMBC either immediately hung up, leaving consumers with "dead air," or played a prerecorded message. Such calls violate the TSR, which limits telemarketers' use of prerecorded messages by requiring that calls answered by a person be connected to a sales representative within two seconds. The FTC's complaint alleged that VMBC, under the direction of its owner, made more than 46 million calls that violated the TSR. The total penalty was $3 million, but all but $180,000 was suspended based on the defendants' financial inability to pay.
Bottom line Alex – the use of automated calls to deliver pure information is good, if you ask for anything that might be even construed as Solicitation of goods or services “even reminding the customer of service and asking for an appointment will place you squarely under the above case law and could be a potential problem”.
Obviously this is not meant as legal advice just my interpretation.
Thanks for your interpretation LB!

Here is a link OneCommand sent me about what they're doing: