By
The Associated Press
updated 7/7/2003 4:47:42 AM ET 2003-07-07T08:47:42

As Sara Paduano settles into her cubicle for another day of cold calling, the 55-year-old telemarketer worries that her next call might have to be to the unemployment office. Paduano, a widow for 14 years, has been a telemarketer at Aegis Communications Group Inc. for 4-1/2 years, but her job might be among the 2 million the industry fears losing as a result of the national “do not call” list.

“ALL I HAVE is a high school diploma,” Paduano said. “I’m very nervous about all this starting in October. If I have to leave, where do I go?”

The Federal Communications Commission last month approved tighter telemarketing rules to take effect Oct. 1, which will allow consumers to stop most unwanted calls into their homes.

Plunging long-distance rates and computerized dialers have led to a five-fold increase in telemarketing calls over the past decade, prompting a deluge of consumer complaints.

With an estimated 60 million people expected to register on the national “do not call” list, telemarketer calls to consumers, or outbound telemarketing, will decrease drastically, according to Tim Searcy, executive director of the American Teleservices Association.

“In an industry that employs 6.5 million people, one-third of the work force faces the possibility of unemployment,” he said.

Sixty-five percent of telemarketers have only a high school diploma, 30 percent never graduated from high school, and only 5 percent have college degrees, according to data from the American Teleservices Association.

“With statistics like that, you can see that it won’t be easy for these people to get re-employed if they lose their jobs,” said Mary Henson, center director at the Port St. Lucie, Florida, call center of Aegis Communications.

The numbers are bad news in light of the U.S. unemployment rate for June, which reached a nine-year high at 6.4 percent.

Sixty-year-old Dan Hadeen has been a telemarketer for more than four years and is worried about the future of his job.

“The uncertainty of what will happen is really hard,” said Hadeen, who works at the Aegis center in Florida. He and his co-workers are postponing major purchases.

“Those of us who wanted to buy a car, or a new refrigerator or any other item that needs monthly payments, we’re all putting a hold on our plans to see what happens,” he said.

INTERNATIONAL IMPACTTelemarketers outside the United States will also be affected. Many American companies outsource their telemarketing to call centers in such countries as India, the Philippines and Ireland.

“A lot of them call the U.S., so they will be affected, but the magnitude of the effects in those countries has not been measured yet,” said Lee Waters, director of sales and marketing at Aegis.

Outbound telemarketing brings in $211 billion in annual sales in the United States, according to the Direct Marketing Association.

The new national “do not call” list will curtail outbound calling severely, said Scott Frey, president of PossibleNOW.com, a company that manages do-not-call lists for clients, and offers $10,000 worth of insurance per customer, should the company make a mistake. Violating the federal regulations will cost telemarketers $11,000 per call.

“Companies that provide only outbound telemarketing for clients will have to rethink their business strategy. The national DNC list threatens their very survival,” Frey said.

But companies like PossibleNOW.com, which help telemarketers comply with regulations by managing the database of “do not call” lists, say they have seen a short-term burst of business as a result of the new federal regulations.

“Our sales volume has doubled in the last month leading up to the announcement of the national list,” said Frey, president of the Duluth, Georgia-based company.

“But despite the initial increase in clients, the new regulations will, over time, decrease the number of telemarketing companies out there. And as a result, we’ll see fewer clients,” Frey added.

‘COLD CALLING WILL DIE’To date, about 25 states have do-not-call lists, with penalties for violations running from $500 to $25,000 per call.

The national list, however, will have wider impact and will change the industry, according to Aegis’ Waters.

“Cold calling will die, and what you’ll see is the Internet supplanting the telephone,” Waters said. Aegis provides outsourced telemarketing for companies such as Blockbuster Inc. , American Express, AT&T Corp., and BellSouth Corp.

“You’ll see clients move away from the phone and rely more on television, direct mail and the Internet to motivate you to call me instead of me calling you,” Waters said.

“Basically, there will be a shift from outbound marketing to inbound marketing.”

It is this shift that 23-year-old Jennifer Smith is worried about. Smith is an outbound telemarketer for Aegis, currently working on a project for BellSouth.

A single mother to a 3-year-old, Smith said she is concerned, but feels fortunate to have this job.

“When the economy is so bad, and I never went to college, and I have a little girl and no husband, I’m just happy to have a job. And I don’t want to lose it.”

© 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.

© 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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