Why a cold calling ban could be a myopic move   

The UK government will ban cold calling to pensioners, after the House of Lords pushed through an amendment to the upcoming Financial Guidance and Claims Bill.

The amendment was made amid uproar from various parties regarding the Government’s previous decision to rule out any changes to legislation until 2020.

Lord Sharkey, the Liberal Democrat peer involved in tabling the bill said it had to be made to protect consumers’ financial wellbeing.

"It is often an invitation or more exactly an inducement to criminal activity. The problem is not only terrifyingly large; it continues to grow very rapidly."

According to The Telegraph, more than 11 million pensioners are targeted by cold callers every year, with 250 million calls made by ‘fraudsters’ – i.e. companies deemed to be making unsolicited calls by the Telephone Preference Service (TPS).

There is an increasing demand for the ban to eventually be made more widespread, accounting for all consumers and business-to-business calls.

"Direct approaches to people on their mobiles or home phones should have no place in the modern world of business," added Ros Altmann, a Tory peer and former pensions minister.

Will the amendment work?

Whilst a widespread crackdown on all unsolicited calls is an understandable measure given the current environment, there are concerns about how effective the move will be, and whether it is likely to damage certain instances where cold calling is a beneficial practice for both business and customer.  

Nick Rines, head of communications for the recently-formed Telephone Compliance Council (TCC), believes applying a blanket ban is unlikely to deter companies already acting outside of the law.     

“The reality is a ban on telemarketing, whether it is opt-in based or simple prohibition, will not stop rogues and fraudsters.  

“It will have the opposite effect because it will move compliant users of outbound calling out of the way to leave the field clear for the pirates to expand activity. Currently rogue companies fold and start under a new name, or if they are based overseas cannot be touched by UK authorities.” 

The reality is a ban on telemarketing, whether it is opt-in based or simple prohibition, will not stop rogues and fraudsters.  

Instead, Rines believes a more acceptable measure is to readdress the work undertaken by the Telephone Preference Service (TPS) in order to properly eradicate rogue companies without penalising legitimate businesses.

“What is needed is balanced regulation that puts members of the public first, and allows ethical companies to make legitimate calls. It is why the TCC is working on producing proposed regulation that will more effectively protect the public and allow compliant companies to make legitimate calls. Rogues have to be marginalised, not just legislated against.”

Outbound marketing

The TCC holds a view shared by many businesses – that brandishing any outbound telephone marketing as ‘cold’ and ‘nuisance’ is too sweeping and could lead to certain aspects of the marketing and sales function being penalised unnecessarily.

If a widespread ban were to be implemented, many companies contacting both consumer and business prospects could be placed in the category of ‘cold calling’, even in instances where there has been an informed analysis conducted for recipients and some form of intent to buy received.

Enda Kenneally, VP sales & business development UK&I, West’s Unified Communications Services says many telephone marketing campaigns are far more sophisticated than is publically perceived.

“Cold calling has given the industry a bad name in recent years and as a leading contact centre provider, we believe we have a responsibility to help brands deliver more customer-friendly outbound campaigns.

The rise of the mobile customer means that success rates for cold calls have plummeted in recent years.

“On top of that, the rise of the mobile customer means that success rates for cold calls have plummeted in recent years. With just 10% of cold calls actually leading to a conversation, brands need to deploy new strategies [anyway] to attract new customers and build profitable relationships with existing ones.

“Cold calling is being replaced by informed outbound campaigns. For example, by sending an SMS in advance of a call, success rates can be increased dramatically. And Mobile Number Screening can ensure that connect rates to mobiles increase by up to 40%. Outbound can also be very effective at following web visits. It is all about joined up customer experience strategies.”

And leading sales expert, Sean McPheat, believes that, aside from small margin of rogue operators driving the call for a widespread ban, many sales calls now “use the information gathered from internet analytics, social media and sales analytics to make intelligent calls rather than just cold calls”.

European opt-out?

Another concern lies with the application of various EU law, which is set to change the landscape for unsolicited calls regardless of this week’s amendment.

For instance, the passing of the Digital Economy Act instructs the UK’s Information Commissioner’s Office (ICO) to create new direct marketing guidelines, and the EU’s e-Privacy Act is also in the process of being debated.

Whilst the ICO is currently considering recommending to government that the telephone should fall into line with rules on email and text marketing that will be opt-in only, there is a clause in draft European privacy legislation that allows domestic governments to choose an opt-out system such is that currently being operated by the TPS. Many believe the solution to rogue cold calling lies with making this aspect more stringent and that it requires more effective policing.