Consumer’s Right to Know Act Back Before Congress

Sep 17, 2008 3:17 AM  By

If you’re phoning in a catalog order for that special pair of leather shoes you’ve been wanting for weeks, do you really care whether the agent you’re talking to is from Baltimore or Bangalore?

Well, apparently some people do. And if a proposed bill backed by powerful unions and consumer advocacy groups makes its way through Congress, all call center agents handling contacts originating from or terminating in the U.S. will have to disclose their location to callers up front, at the beginning of each call.

The “Call Center Consumer’s Right to Know Act,” or H.R. 1776, was first introduced in 2006, but never saw the light of day during the past two legislative sessions.

Now it is back before Congress: This past week members of U.S. House of Representatives’ Committee on Energy and Commerce, Subcommittee on Commerce, Trade, and Consumer Protection took another look at the legislation and heard testimony from the Federal Trade Commission, which may end up administrating the new law if it is put into action (the FTC already overseas the National Do Not Call registry, which was put into place in 2003).

The goal of the proposed law is to reduce fraudulent telemarketing activity by forcing overseas call center agents to disclose their locations. This way, consumers will presumably have that information on hand when filing complaints with law enforcement agencies about suspected phone scams. Then the good guys will know where to look for the bad guys.

The bill is also designed to empower consumers by allowing them to make an up-front, proactive decision as to whether they want to take a call from, or place an order with, an agent located at a particular overseas destination. So if, for whatever reason, a caller doesn’t want to talk with an agent in Bangalore, they can request to speak with a U.S-based agent or simply terminate the call.

Backed by powerful lobbying groups including the Communications Workers of America (AFL-CWA), the proposal is rooted in the assumption that Americans are outraged by the outsourcing of U.S. call center jobs to developing nations — not to mention the subsequent decline in customer service that has resulted from language barriers and under-paid, overworked and un-empathetic call center agents working in what are often times considered adverse, even slave-labor-like conditions.

In her testimony last week before the Committee on Energy and Commerce, Lois Greisman, associate director of the division of marketing practices, bureau of consumer protection, FTC, pointed out four major obstacles the bill will have to hurdle before it can be signed into law.

The first two pertain to how the bill defines a call center. As Greisman explained, the bill’s underlying purpose “is to provide members of the public with a way to know when they are dealing with an overseas call center.” But as currently drafted, “the obligation to disclose physical location would apply broadly to all entities that have telephone contact with consumers, whether operating in the United States or abroad. This would likely include local pizza parlors, flower shops, or even doctors’ offices.”

Griesman suggested that the bill’s language “be tailored more precisely to apply only to call centers operating outside the United States.”

Second, Greisman pointed out that the bill defines a call center as “a location that provides customer-based service and sales assistance or technical assistance and expertise to individuals located in the United States via telephone, the Internet, or other telecommunications and information technology.” But she says it is “unclear whether the reference to the Internet is intended to bring within the bill’s scope all on-line transactions, including on-line service assistance.”

“Resolution of this ambiguity would facilitate enforcement of the bill, if enacted, and would also help those entities potentially subject to the bill’s requirements to understand what they must do to comply,” she said.

She also noted that there is no enforcement mechanism to ensure that all call centers doing business in the U.S. are disclosing their locations.

Finally, the bill doesn’t spell out what the punitive measures will be for call centers which are caught violating the law.

“Jurisdictional issues could significantly complicate FTC enforcement of this bill’s requirements,” Greisman said. “[It] would impose disclosure burdens on all entities that communicate with consumers by means of a call center. The entities that currently utilize call centers overseas – presumably the key concern of this bill – include depository institutions, airlines, and insurance companies, among others. Under the FTC Act, the FTC has limited or no jurisdiction over many of these large users of overseas call centers.”

“Moreover, the commission would encounter significant practical, legal, and logistical problems enforcing this bill against overseas call centers, and would not be able to reach the exempt U.S. entities that engage those third-party overseas call centers,” she added. “The committee might want to consider assigning enforcement of this bill to an agency without these jurisdictional challenges.”

Despite its good intentions, the bill is not likely to deter fraudulent telemarketing activity, nor will it have much impact on the industry overall, says Kathryn Jackson, president/co-founder of contact center consultancy Response Design Corp.

“I do not think this bill will make any difference except to cause undo complexity,” she says. “The definition and enforcement are too complex to make it a viable solution. It won’t protect consumers. Companies that want to get around the bill will. Companies that are scamming won’t tell the truth.”