What is Telemarketing? - Definition, Examples & Laws

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  • 0:01 What Is Telemarketing?
  • 1:21 Laws Affecting Telemarketing
  • 2:54 Lesson Summary
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Lesson Transcript
Instructor: Tara Schofield
Telemarketing is a very common and widely used method of contacting potential customers. There are some important laws regulating telemarketing that companies are responsible for learning and following. Learn about them in this lesson.

What Is Telemarketing?

Telemarketing is a very common form of marketing companies use to connect with potential customers of their products or services. Historically, telemarketing consisted of companies making telephone calls to existing or potential customers. With new technology, telemarketing has expanded to include video conferencing calls as well, although those are typically conducted with existing customers. Telemarketing is often used to try to sell a product or service, but it can also take the form of surveys or information gathering. For instance, political campaigns use telemarketing heavily prior to elections to inquire about voting preferences.

When companies call new customers, the activity is referred to as cold calling. This means the consumer has not purchased from the company before nor have they requested a call from the company. Companies can buy a list of potential customers to call from a list service, which will provide a list of consumers who have similar interests or purchasing histories who fit the company's target market.

There are many industries that rely heavily on telemarketing, such as:

  • Cable and Internet services
  • Home security systems
  • Financial services
  • Vacation and time share
  • Charitable organizations

Laws Affecting Telemarketing

There are many federal and state laws that govern how companies can telemarket their products. One type of law protects cellphone users from receiving telemarketing calls to their cell numbers. Additionally, two other common and impactful laws are:

Telemarketing Curfews

There are rules that govern what time telemarketers can make calls to private phone numbers. The federal laws state that telemarketers cannot call before 8:00 am or after 9:00 pm in the individual's local time zone. Likewise, telemarketing calls cannot be made on Sunday or holidays. Each state can alter the federal laws if they restrict the times even further. They cannot extend the federal curfew, but each state is allowed to restrict the curfew times to later than 8:00 am and prior to 9:00 pm locally.

Do-Not-Call List

The Do-Not-Call list is an opt-in service that allows consumers to add their telephone number to the federal list of phone numbers companies cannot call. This law applies specifically to companies calling consumers that do not have an established business relationship with the company.

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