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THE IMPACT OF NEW TELEMARKETING AND CALL CENTRE LEGISLATION IN ASIA

While the situation varies from country to country, there are very few rules governing telemarketing in Asia. The rules that do exist are relating to specific industries, particularly the financial industry.

The amount of consumer telemarketing in Asia is very low which negates the current need for legislation. The main reason why it is unlikely to be an issue in the short term is the lack of good quality, affordable residential data that is preventing a dramatic increase in telemarketing activity.

With the economies of countries such as China and Vietnam continuing to grow at amazing rates, it is no surprise that foreign companies will increasingly view telemarketing as a quick and low risk route to market.

There is one major area of concern in some countries. Because of the low availability of data, one way that companies are telemarketing for prospects is simply to use area codes and then randomly select telephone numbers. In countries with low landline penetration, this is even being tried with cell phones. While this may sound entrepreneurial, it is very similar to tactics, which were used in industries such as home improvements and timeshare in The United States and United Kingdom. These are the two industries, which tarnished the entire reputation of telemarketing. Could it be that these tactics in Asia could hasten the push towards legislation?

The obvious answer would be that the Asian call centre industries should pre-empt legislation by adopting strict guidelines. However, the history of such optional schemes has been unsuccessful in dealing with the serious offenders.

There seems little doubt that Asia will follow behind Western economies in introducing some form of legislation. The severity of this legislation and the speed of its introduction will undoubtedly be determined by the way in which the industry conducts itself in the short to medium term.

The new legislation will have mixed impact on the offshore call center industry in India and The Philippines.  Almost all call center companies specialize in either inbound or outbound.  Those in the inbound sector will be barely affected. However, the offshore outbound industry will be acutely impacted because such a high amount of the “low value consumer outbound” which this legislation targets has already been moved offshore through brokers and middlemen.

From recent discussions I have had, it is also quite clear that many offshore companies are unaware of the new rules and their implications.  This apathy in the new legislation is compounded by an acceptance of the ineffectiveness of the Indian legal system.  Theoretically, it is possible to sue an Indian company for non-compliance but ask anyone who has gone through the Indian legal system and they will tell you a different story.  However, it will be easy to sue the clients or the US based brokers/middlemen, which seem so prevalent in the offshore industry.  The situation is slightly different in The Philippines which has a more effective legal system and where most of the call center companies are owned by Americans who are very aware of the severity of this new legislation.

One specific area of concern is that a number of offshore call center companies have invested in the wrong technology, which won’t be able to deal with the new regulations concerning “abandoned calls”.  A number of centers have purchased dialing technology relatively recently and these new requirements may render their investments useless.

The one final point to note is that there is already excess capacity in the offshore call center industry and this new legislation will hasten the imminent shake up.