Proposed Dncr Extension A Blow To Small Business

Proposed DNCR Extension a Blow to Small Business

Media Release

Date 5 February 2010

The Australian Direct Marketing Association is today strongly urging the Government to reconsider its plans to extend the Do Not Call Register Act to include business numbers; a move which Chief Executive Officer Rob Edwards has labelled "unjustifiable".

Addressing the Senate Committee Inquiry into the Do Not Call Register Amendment Bill in Canberra, Mr Edwards' comments come hard on the heels of findings from a detailed Access Economics survey on the matter, which concluded "the resulting cost [to business] will outweigh any benefits in large measure".

Whilst remaining supportive of an extension to include fax marketing and emergency service call centres, ADMA, backed by the body of evidence from the survey, contends including business numbers is unfounded and potentially harmful. "The expected benefits to business just don't stack up. It's a clear case of the cure being worse than the perceived ill," Mr Edwards said.

Restriction of trade

ADMA has been and remains supportive of a DNCR for consumers. However, Mr Edwards argues that the proposed extension, which effectively treats legitimate business-to-business calls in the same manner as the highly emotive issue of telemarketing to the public, is nonsensical. "Companies are 'open for business'. They understand that the price of being able to make calls to other businesses to discuss opportunities is receiving calls in return. It's an accepted part of doing business which fundamentally underpins Australian commercial activity," said Mr Edwards.

Hardest hit will be small business, for whom a B2B extension to the DNCR would amount to an effective restriction of trade, with consequences including:

* Suppressed innovation - new entrants to the market with no "existing business relationships" will have limited capacity to contact prospects

* Hindered competition - small to medium enterprises (for whom the phone is one of the few or only viable means of promoting goods and services) will have few, or any marketing alternatives

ADMA further contends that there would be a flow-on effect to the general economy as restricted trade leads to unquantifiable loss of revenues.

Underestimated costs

ADMA is also gravely concerned that the true price tag of compliance has been oversimplified and therefore underestimated, such that the sought-after benefits to productivity would be eclipsed by costs.

"If extended, every business person would have to check the Do Not Call Register every time they want to make a business call to a business or government number, unless they have consent. This checking would have to be done day in, day out at a significant ongoing cost to business," Mr Edwards says.

Such "number washing" against an expanded DNCR would also constitute but one component of new costs to business, with the establishment and maintenance of compliance systems representing an even greater outlay.

Increased penalties

Through engagement with its members, ADMA has also established that there is limited true understanding of the scope of proposed amendments, which could lead to a substantive increase in penalties.

The extension would apply to any outbound call made from any office or small business arrangement where at any time goods, service, supplier, business opportunity or investment opportunity is promoted, offered or advertised.

Mr Edwards has stated that many businesses mistakenly believe their activities wouldn't fall under the provisions of the Act. He says also that, worryingly, some believe complaints would not be made against them if they do call numbers on the DNCR.

"The creation of regulatory obligations that a significant proportion of businesses are unlikely to be aware of, or have no intention of complying with, cannot be a satisfactory outcome from a best practice perspective," Mr Edwards concluded, also noting that the Australian Communications and Media Authority (ACMA) is a well-resourced and diligent regulator with the power to impose substantive fines on organisations who do not comply.

Balance should be sought

"It's a matter of perspective," Rob Edwards said. "Whilst some calls may be annoying to some businesses, the impact from the proposed extension to business numbers will be much, much worse. We urge the Government to engage with industry to achieve the fine balance required in the legislation and find a workable outcome protecting legitimate B2B calls."

- ENDS -

For further details contact Kate Furey, Communications & Awards Director, ADMA
Ph: 02 9277 5408
Mobile: 0404 305 316
Email: [email protected]


SOURCE: Australian Direct Marketing Association (ADMA)