Why pesky calls and SMS won't stop soon

A recorded telephone conversation from Arvind Kejriwal, president of the Aam Aadmi Party, is hard to miss these days.

Even if a person doesn't wish to receive such communications, he is compelled to attend to it.

These calls are not only a violation of a person's right to privacy but a reminder of the rising menace of unsolicited communications, originating through registered and unregistered telemarketers.

Dilip Pandey, who is leading Kejriwal's phone campaign, says they have hired a registered telemarketing company and people are called after their numbers are filtered from the database of the National Do Not Call Registry.

However, he admits there could be Kejriwal supporters who might have been calling people on their own, to further the party's chances in the Delhi assembly elections.

There are also people who receive at least three to four calls a week from people selling credit cards and property.

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As of now, there are 200 million mobile phone users who have opted against unsolicited communications to save themselves the harassment of telemarketers.

For the record, India had 876.72 million (urban, 525.78 million) subscribers for wireless services, including mobile phones and movable landlines, by the end of August this year. It means every fourth person prefers not to be disturbed with promotional calls.

Rule & reality

For this purpose, the National Do Not Call Registry, now renamed the National Customer Preference Registry, was introduced in 2007.

As it completely failed to rein in the errant telemarketers, the new and more stringent rules were introduced through the Telecom Commercial Communication Customer Preference Regulations, 2010, and it came into effect on September 27, 2011.

These services allow consumers to fully or partially block all unsolicited calls and text messages. For instance, if a person wishes to receive selective calls, he can opt from seven categories.

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These are broadly classified as banking (insurance, financial products and credit cards), real estate, education, health, consumer goods and automobiles, communication (broadcasting, entertainment and information technology) and tourism.

On paper, it seems a well-oiled system to weed out the menace of pesky calls.

Whether it has actually spelt relief to people can be gauged from the fact that since the introduction of new regulations, the Telecom Regulatory Authority of India (Trai) has amended its provisions at least 13 times. The last one was notified on August 22 this year.

And, if Trai is to be believed, both registered and unregistered telemarketers, telecom service providers, banks, insurance companies and builders are to be equally faulted for the rising menace of undesired calls.

All stakeholders have huge business interests and are reluctant to stamp it out.

"Since telemarketing is a direct and cheap medium to connect with people, the unregistered telemarketers always find ways to circumvent the law. These people don't mind paying a hefty amount in penalties, as the overall cost to reaching out to people continues to remain miniscule," says Trai secretary Rajeev Agarwal.

"These days their (telemarketers) focus is more on SMS. People can still choose to refuse calls but they are forced to read text messages."

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The cost-revenue model overwhelmingly supports the idea of telemarketing. For instance, a front page print advertisement costs, on an average, Rs 18-20 lakh (Rs 180 - 200 million), whereas millions can be reached by spending a mere Rs 100,000 the other way. The per head SMS cost is only five to 10 paise.

Marketers try to further reduce this by engaging unregistered telemarketers. By the rules, only 6,129 registered telemarketers in India are supposed to call people.

Before they start making calls, they need to register with Trai, after paying a one time-fee of Rs 10,000.

Also, these registered telemarketers need to bear an additional cost of five paise for each promotional SMS they send to the targeted customer.

They are governed by the provisions and are liable to be prosecuted for any wrongdoing.

But they don't stick to the script. Trai has noticed that the registered telemarketers bag big contracts from mostly private banks, insurance companies and builders, and then branch out to unregistered telemarketers.

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This way, they get a good commission and avoid a legal penalty, which could be a criminal case, a fine or both.

Also, there is no way to quantify the number of unregistered telemarketers or to even go after them.

They could be in tens of thousands. So far, Trai has collected Rs 1.47 crore (Rs 14.7 million) in fines from registered telemarketers.

Measures

The regulator says it has adopted various measures, including the capping of bulk SMSes, which have created more nuisance than phone calls.

On September 5, 2011, it put a ceiling of 100 messages a day per SIM but this failed to deter the rogue telemarketers.

The latter resorted to ingenious tricks, such as routing messages through international gateways or servers located outside India.

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Their messages were cleverly designed, not carrying headers or telephone numbers, to hide the identity of the source and evade prosecution.

"It's like a 'catch the mouse' game. If you cover one hole, they dig another," says a Trai official, who refused to be named. For unregistered telemarketers, it's a mammoth business and has to go on. The returns are impressive and investments are miniscule, explains one who quit the business some time earlier.

Trai got wind of the new methods and directed the telecom service providers on January 20, 2012, to block communications (SMSes) having similar signatures and originating from outside India.

Subsequently, Trai raised the SMS cap to 200 per day per SIM card and 6,000 a month for prepaid customers, to accommodate the genuine need of a certain category of subscribers.

However, on July 13, 2012, the Delhi high court struck down the instruction.

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Trai recovered its wits and decided to hit at the financial side of the business. TSPs were instructed to charge 50p for each message after the first 100 SMSes, available at a concessional rate.

"Even then, there are people ready to bear this additional cost. Striking a balance between the needs of real users and unregistered telemarketers is truly a challenge. A genuine customer should not feel the pinch," says an official.

"While the regulatory interventions have tempered the menace, it has not altogether abated. UCCs (unsolicited commercial communication) from persons not registered as telemarketers continue to irritate and harass normal subscribers," Trai says in its last amendment.

Road ahead

The number of people complaining against unsolicited calls and messages is alarming. Between September 2011 and October 2013, 840,000 complaints were received. Between August 5, 2012 and August 4, 2013, about 556,000 made these complaints.

"Since unregistered telemarketers are not complying with the directions and regulations, it has become necessary to make the regulatory framework more stringent, so that not only the unregistered telemarketer but the telecom service providers and entities engaging (mostly banks, builders and insurance companies) such telemarketers to promote their business are accountable," Trai has stated.

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All the three are responsible for UCCs, alleges Trai, adding the TSPs are encouraging such activities by providing attractive SMS packages and allowing bulk connections, knowing fully that these would be used for telemarketing. They are breaching the directives for additional revenue.

Market leaders such as Bharti Airtel, Vodafone and Idea Cellular Services refused to participate for this story, by shifting the onus of answering to the Cellular Operators Association of India.

"It is a problem for us as well. We pay too much of amounts in fines but still cannot stop unregistered telemarketers from using our network. We don't have a mechanism to check such people and initiate criminal proceedings against them. We have been asking Trai to bring a law through Parliament," says Rajan Mathews, director-general of COAI.

Trai has collected Rs 37.45 lakh (Rs 3.74 million) in fines from eight service providers. It has also got 960,000 phones disconnected.

It says the private banks, which mostly employ unregistered telemarketers, are falling in line.

The biggest concern continues to be builders, who continue to exploit the numbers databank, easily available in the open market.

"We don't engage telemarketers. Our people only contact those who have bought properties, even if it was 15 years ago. The attempt is worth it, as the entire telemarketing cost is recovered if we manage to sell properties to two out of 100 people," says Pradip Jain, chairman of Parsvnath Builders. However, he refused to speak on behalf of fellow builders.