Telemarketers Faking Surveys, and some Tormenting Telemarketing Math

Well, you really just can’t trust some Telemarketers to not violate the Telemarketing Sales Rules. The Consumeristand Network World have a couple of nice articles, and a link to a PDF of a complaint filed on behalf of the Federal Trade Commission and 10 different State AG’sagainst Caribbean Cruise Lines and other related entities. They are accused of using a “Survey” as a ploy to sell tickets on a converted car ferry known as the “Bahama Celebration” and travel products, as well as a few other Telemarketing Sales Rule violations (including Robocalls).

The gist of the operation is that the Telemarketers would call you for a “survey”, and for taking part, you get a “free” cruise to the Bahamas. Well, not quite free. You have to pay some amount of money (around $50+ per person) in order to “reserve” your ability to take the cruise. Supposedly, these are “Port Taxes”, which of course aren’t actually due until you book your actual ticket. Out of the goodness of their little hearts, I suppose, they hold on to those Port Taxes for you until such time as you are able to schedule your cruise. According to the complaint, they would try to get people to purchase other “upgrades”. Which is selling. Which is not a “survey”. The complaint covers an Oct 2011 through July 2012 time period.

“So in war, the way is to avoid what is strong, and strike at what is weak.”
― Sun Tzu, The Art of War

One thing that was pointed out in the complaint is how the finances worked. The robocalling company (and a couple of others) got paid by Caribbean Cruise Lines for each “lead” generated that was interested in the “free” cruise. If you were a Tormenting Telemarketer – you would cost Caribbean Cruise Lines $2-3 dollars just for the privilege of talking to you. Each bad lead reduces their profit. Following up on these bad leads further reduces those profits. Tormenting the Telemarketer by discussing the “free” cruise for 10-20 minutes reduces the profits even more. The complaint states that there was something on the order or 12 to 15 million robocalls placed per day. Just imagine if only 0.01% of the people called exercised Tormenting Telemarketers. That’s only 1,200 or 1,500 per day of people answering the phone and talking to them:

  • Caribbean Cruise Lines would have to pay $2,400 to $4,500 for the leads per day.
  • If each Tormenter spent 10 minutes with an Agent, that would be 200 to 250 hours of Agent time consumed per day.
  • That’s 25-30 Agents (@ $8/hr) or $1,600-$1,920 per day. Probably even higher than that.
  • Over the life of the complaint (10 months), that would be $1,200,000 to $1,926,000 in extra costs to them.
  • At the $56 “Port Fee” rate, that’s 21,428 passengers they would have to “book” to recover.
  • The Bahama Celebration has a capacity of 892 passengers, so that’s 24 full loads of passengers.
  • At 2 cruises/week, that’s 12 weeks or 3 months of cruises they would have to book just to cover the costs of Tormenting Telemarketing.

You can see that an extra $1,200,000+ in marketing costs is going to have a negative impact on their profits. Call-Blockers, hang-ups, and such will not have that kind of negative impact on their business. In fact, based on the financial arrangement, using Call-Blockers or not answering the phone would have no effect on their profits at all.

According to the FTC, the growth in robocalls has been enabled by technological changes that have drastically decreased the cost of making phone calls.The articles state that Caribbean Cruise Lines will likely only have to pay $500,000 in penalties. This penalty is after Caribbean Cruise Lines has gone defunct, and more than three years after all the telemarketing. It’s obvious that the FTC and State AG’s can’t act fast enough to have a significant impact. Tormenting Telemarketing would have resulted in these “penalties”, and much more, to be extracted immediately by increasing their costs. It would also reverse the impact of the technological cost savings by hitting them at their weak point – they still need a live Agent to close a sale.

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