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Call and Tell The zip code tells the U.S. Postal Service where to deliver the mail. It also tells direct marketers what to deliver. Combining the zip code with census and other data provides marketers with a rich vein of demographic information concerning your income, buying habits and socio-economic preference for squash instead of handball. If all this is not enough, the past decade has given direct marketers another wedge into the collective psyche of American consumers: your telephone number. Combining the resources of massive computer data bases with the ability of an emerging "smart" telephone network to identify callers, the direct-marketing industry is using the telephone number to track down a person's name, address--and life-style. If your household is deemed "desirable" to a marketer--perhaps one of the "Pools & Patios" crowd, as one telemarketer puts it--an 800 or 900 line service representative may know it before the call is answered. Target direct marketing is not new. A company that subscribes to an 800 or 900 service can receive a monthly listing of the numbers of callers, which can then be matched with names and addresses using a reverse telephone directory. Correlating that information with demographic data produces valuable mailing or phone lists. (An 800 call is toll free, whereas the caller pays for dialing a 900 number. A caller interested enough to pay a fee is more likely to buy a product, marketers reason.) To the consumer, all this means that products can be more closely matched to personal tastes, with the result that the junk mail might just contain something worth buying. What's new is that information-age marketers have begun to acquire the technology to carry out this screening process instantly and without the caller's knowledge. Beginning this year, Telesphere Communications, Inc., and Oakbrook Terrace, Ill., company with $550 million in annual sales, will offer a service to 900 subscribers that can peg the location of an incoming call using an are code and the number's three-digit prefix. Knowing where the call originates allows a salesperson to prepare a pitch. Later a reverse directory can be used to identify the caller, and a data base can determine which of 40 demographic "clusters" fits that person. In the near future, these services may be provided while the caller is still on the lines. Telesphere gets in demographic information from PRIZM, a data base owned by Claritas Corporation in Alexandria, Va. PRIZM can pinpoint a neighborhood for virtually everyone in the U.S. using census and other public demographic information. "It works on the theory that birds of a feather flock together," says Harvey B. Uelk, a Telesphere sales director. So if you are lucky, the pitchman will know if you fall in the fifth cluster in the data base: "Furs & Station Wagons." This group is described as "'new money' living in expensive new neighborhoods.... They are winners--big producer, and big spenders." A not so fortunate caller might be lumped into the "Emergent Minorities" cluster. These people, says a promotional report, are "almost 80 percent black, the remainder largely composed of Hispanics and other foreign-born minorities.... Emergent Minorities shows...below-average levels of education and [below-average] white-collar employment. The stuggle for emergence from poverty is still evident in these neighborhoods." The risk that a household, through clustering, might become the telemarketing equivalent of a bad credit risk has not escaped the notice of the American Civil Liberties Union and other public interest groups who fear that minorities might be excluded from mortgage and credit opportunities or a gay neighborhood may be blacklisted by an insurance advertising campaign. A telemarketer might display different sales pitches on a service representative's computer screen, depending on whether the incoming caller hails from the "Money & Brains" or the "Coalburg & Corntown" cluster. Marc Rotenberg of Computer Professionals for Social Responsibility likens calling an 800 or 900 number to walking into a store. "A person should have a right to enter a store without disclosing creditworthiness, residence or annual income," Rotenberg asserts. Lobbying by privacy groups has focused so far on supporting national legislation that would, in effect, allow a caller to keep his wallet in his back pocket until he decides to make a purchase. The law would give the caller the option of blocking a number from being displayed immediately bya receiving party. This would be done by pressing "*-6-7," or a similar combination of numbers, before making a call. (Marketers could still get callers' 800 or 900 numbers with their statements each month, however.) Although the law failed to pass Congress last year, it is scheduled to be reintroduced this year. Individual states are not necessarily waiting for Congress. A Pennsylvania court has banned "Caller ID" service--a decision that is on appeal--and a number of state public utility commisions have ordered that blocking be offered free of charge. For the moment, states' actions may not affect most telemarketers, whose 800 and 900 calls are usually routed over the long-distance phone network and displayed to a clerk using a service called automatic number identification. Support for blocking has come not just from privacy advocates but from the White House's Office of Consumer Affairs, four of the seven regional Bell companies and the Direct Marketing Association in New York City. As with junk mail, the direct-marketing industry acknowledges that the consumer should have the right to choose not to receive unsolicited information. On the opposite end of the line, a number of telephone companies contend that caller identification services are a clear boon to subscribers. Bell Atlantic, an ardent opponent of call blocking, has compiled a list of subscribers who have used the Caller ID service to stop obscene phone calls or fake pizza orders and to track down burglars. For their part, some direct marketers assert that fears of misappropriatio of personal information are greatly exaggerated: they are interested in patterns of group behavior, not the personal preferences of the individual. "We try to identify market segments that are most likely to respond to a particular marketer's products or services," explains Philip H. Bonello, director of corporate planning for Metromail, a Lombard, Ill., firm that owns a data base of 86 million households that supplies the direct-marketing industry. But the public is clearly concerned about electronic privacy. In January Lotus Development Corporation, a Cambridge, Mass., software company, and Equifax, Inc., an Atlanta-based credit bureau, withdrew plans to market Lotus Marketplace on compact discs after some 30,000 people asked that their names be removed from the files. This data base contains demographic information on about 120 million individuals. The public debate over privacy could grow still more heated if telephone companies try to market their internal data bases of information about residential customers. Limited attempts to do so have sometimes met with resistance. Recently New England Telephone and New York Telephone dropped a service offering residential and business directory listings when hundreds of thousands of customers asked that their names be taken off the lists. Legislation may help stem abuses. A public outcry may force companies to lay low. But the irresistible lure of knowing name, phone number and lifestyle means that computerized telemarketing is here to stay. Caveat salutator: let the caller beware.