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Do-not-call rules cast pall on telemarketers' meet

SCOTTSDALE, Ariz. — Forget the daylong seminars on how to boost profits and the boisterous nighttime receptions typical of most conventions.

At the telemarketing industry's annual gathering here, many of the sessions focus simply on ways to survive. And at the after-hour parties, somber conventioneers have good reason to cry in their beer.

The nation's new do-not-call rules take effect in just two weeks, and with them come the biggest challenges ever for the business of selling stuff over the phone.

Consumers have registered more than 48 million telephone numbers on the Federal Communication Commission's do-not-call registry, making them off-limits to telemarketers — with the exception of charities, political groups and a few others — beginning Oct. 1. By next summer, 60 million numbers are expected to be on the list.

If they violate the rules, telemarketers could face fines of $11,000 per call. Between the loss of potential business and the stiff penalties, industry officials say telemarketing call centers nationwide will be forced to cut 2 million jobs by Christmas.

Telemarketers "are very scared," said Tim Searcy, executive director of the American Teleservices Association, whose annual meeting concludes Wednesday.

Among them is Lisa Scheuerman.

Four years ago, after earning her headset as a cold-caller selling long-distance service for MCI, Scheuerman started her own company, A Direct Result Inc. in Baltimore. It specializes in telemarketing for mortgage brokers.

With business booming, last year she took out an $80,000 second mortgage on her own home in part to pay for new office furniture, new computers and other equipment for her company, she said. A few months later, the FCC announced details of its national do-not-call rules.

"I was sick to my stomach," said Scheuerman. "I try not to dwell on it too much (now) because it gets me too upset. I'm very nervous about how I'm going to afford to pay my mortgage."

If she doesn't find new ways to change her firm's operations, Scheuerman said she could be out of business by the end of the year. She traveled to the Arizona convention to look for contacts to get into the telephone survey business or ways to transform her 17-person company into an "inbound" call center instead of an "outbound" one — and in doing so, avoid the FCC rules.

Searcy said the new call rules would unexpectedly affect some businesspeople.

"I can't tell you the number of individual insurance agents . . . and real estate folks who have called me and said: 'I can't call referrals anymore?"' Searcy said.

Many big telemarketing companies are being hit just as bad.

Steve Moak, chairman of Phoenix-based Synergy Solutions, said job cuts at his company's four call centers, which together employ 800 workers, seem inevitable.

"These are hard-working college students, mothers, retirees," Moak said, describing the typical call center employee. "These people are being overlooked."

Anybody who's been bothered by a telemarketer at dinnertime may not have much sympathy for cold-callers. And to an extent, the telemarketing business has only itself to blame for the new rules. For years they have infuriated potential customers with harassing calls they don't want, with hang-ups from automatic dialers, with insincere salutations and solicitations that sometimes turn out to be scams.

"There are senior citizens who are afraid to even answer their phone anymore," said K. Dane Snowden, chief of the FCC's Consumer and Governmental Affairs Bureau.

Bravely, Snowden traveled from Washington, D.C. to open the telemarketers' convention Monday. Not surprisingly, he was met with plenty of criticism from some of the convention's 500 attendees.

Along with peppering Snowden with concerns about what the telemarketing job cuts will do to the still-recovering economy, attendees grilled him on why it's taking so long to come up with specifics on how the rules will be enforced.

Details on enforcement by the FCC and the Federal Trade Commission aren't expected for another week or so — just days before the Oct. 1 deadline, Snowden said.

In an interview, he had some simple advice for telemarketers concerned about how the rules will be enforced.

"Follow the rules, and you don't have to worry about enforcement," he said.

Snowden acknowledged that the new rules would likely result in big employment cuts. But he added that the FCC is in the business of protecting consumers, not companies. And the new rules, he claimed, could actually make the jobs of remaining telemarketers easier.

The do-not-call list, which telemarketers can access on the Internet and match up with their own prospect lists, identifies consumers who have already said they don't want to be bothered. In essence, that saves time for cold-callers by helping them qualify their prospects before they dial, he said.

"Basically the FCC's rule making has created free market research for the telemarketing industry," Snowden said.

Telemarketers don't quite see it that way.

"The idea that it's going to help is deceitful," said Ed Satell, chief executive of Progressive Business Publications, which has 14 call centers nationwide.

Satell said the new rules aren't expected to affect his own company much, since its prospective customers are businesses, not consumers.

But "it will mean a significant loss of jobs," for others, he said. "This is going to put a lot of companies out of business."