A preliminary report into the Government’s plan to include extending the Do Not Call Register to cover business numbers has found that compliance costs for businesses that use telemarketing for B2B sales could be a high as $2 million.
The preliminary report by Access Economics was commissioned by the Australian Direct Marketing Association, which is angry with plans announced in the May Federal Budget to allow businesses to add their details to the DNCR.
While Access Economics is still working to quantify some of the costs to business that will result from the extension of the DNCR, research shows that businesses that use telemarketing to sell to other businesses will face substantial compliance costs if they wish to “wash” their own contract database against the DNCR.
“Anecdotal evidence obtained through stakeholder consultation revealed that the cost to establish a comprehensive IT compliance system could range from $50,000 for a medium size business to $2 million for a large business,” the report says.
The costs for smaller businesses have not been estimated. Access says small businesses would be likely to set up an administration account with the operator of the DNCR and would then need to keep up-to-date records. “However, small businesses will be more heavily impacted due to their smaller economies of scale,” Access says.
The report also claims that extending the DNCR could have an adverse impact on competition and innovation in Australia.
“Any policy that limits the ability to ‘steal’ customers from other firms will reduce incentives for firms to ‘guard’ their customers through price and quality. Therefore, the extension of the DNCR can reduce competition between firms leading to higher prices, lower quality and less innovation.”
Access argues that new market entrants will be especially affected, as new companies have often relied on B2B telemarketing to gain a foothold in the Australian market.
The report also examines the potential impact on the call centre industry, and found that up to 50,000 workers may be affected.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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