Telemarketing Firms Surviving ‘Do Not Call’

In the months before the national “do-not-call” list went into effect, Stuart Discount laid off more than 150 workers at his telemarketing company.

Now Tele-Response Center Inc. is back to full strength.

“We’ve done a good job of rehiring,” said Discount, president of Tele-Response, which employs more than 500 people at its Philadelphia headquarters and two call centers in West Virginia.

The telemarketing industry appears to have weathered the creation of the list, which more than 63 million Americans have signed up for. A year after it went into effect, fears of massive layoffs and failures among telemarketing companies haven’t been borne out.

People can register numbers on the list or file complaints at www.donotcall.gov or by calling (888) 382-1222.

Businesses that break the law face fines of up to $11,000 for each violation. The Federal Trade Commission has received more than 500,000 complaints against companies and is seeking legal action against four. (People still can receive calls from nonprofit groups, politicians and companies they recently have done business with.)

Discount said his company had adjusted to the do-not-call list by shifting toward fundraising for nonprofit groups and business-to-business sales pitches. Tele-Response has found enough new work since its 2003 layoffs that it is back to its former staffing levels, he said.

Some industry executives say telemarketers still face hard times. Tim Searcy, the American Teleservices Assn.’s chief executive, said he stood by his prediction that about 2 million of the industry’s 6.5 million jobs would be lost because of the federal do-not-call legislation, including managers and other support personnel.

However, a recent study by London-based market analysis firm Datamonitor suggested that the do-not-call list would play a relatively small role in telemarketing layoffs when compared with technology advances and the outsourcing of jobs to countries such as India that have lower labor costs.

Estimating that there are about 4.3 million telemarketing jobs in 50,600 call centers of 10 workers or more, Datamonitor concluded that some 7,500 to 15,000 jobs could be lost by 2008 because of the do-not-call list.

Firms such as Discount’s are more heavily emphasizing different kinds of telemarketing -- for example, taking on more customer service work, in which the call centers receive calls instead of make them. Telemarketers are also carefully targeting outbound calls to recent customers of companies, said Mark Best of Datamonitor.

“ ‘Do-not-call’ has definitely had an effect,” Best said, adding that it was “less of an effect than the industry had forecast.”

Some companies have fared better than others, said Rep. Lee Terry (R-Neb.), one of eight members of Congress who voted against the legislation in 2003.

In first opposing the legislation, Terry said, he worried about the big players and massive job cuts -- Omaha is home to about 40 telemarketing businesses that employ about 39,000 people. In the months since the legislation, Terry said, he has heard from people in smaller businesses who have been laid off because of “do-not-call.”

“What you’re doing is destroying the small-business section of the industry,” he said.

Dublin, Ohio-based telemarketing firm Influent Inc., which employs about 1,500 people in seven domestic offices and one in the Philippines, said it hadn’t laid off any employees because of the list but did get another layer of regulations to deal with.

“We’re in the customer contact business,” spokesman Ted Bernard said. “It certainly has affected our business.”