Dialing for dollars.

• Author: Glastris, Paul
• Position: Telemarketing industry

DIALING FOR DOLLARS

The sign on the window of the shabbybuilding in Silver Spring, Maryland reads "positions available: telephone solicitations.' In the basement office, three dozen people sit under flourescent lights at folding tables placed against the walls. Each works a yellow push-button phone. Some are fundraising for a local Kiwanis Club; others are calling those who have let their magazine subscriptions lapse. In subdued, conversational tones like those of late night DJs, they work from scripted pitches, though most of them also ad lib. They work 4-to-6 hour shifts and make between $5 and $10 an hour. "We've got a low overhead philosophy here,' explains a 30-year-old in jeans and sneakers named Bill Taliaferro, one of the owners of Nevus Communications Group, the telemarketing firm. "That beautiful operator from Time/Life who you see on TV, with her computer screen and her plush office; she's in telemarketing, too,' his partner, Paul Holland, explains. "But believe me, most telemarketing firms don't look like that; they look like this.'

Telemarketing is very likely the fastest growingindustry in America. Banks, real estate firms, stock brokerages, insurance companies, sporting goods manufacturers, distributors--nearly every industry in America is "into telemarketing.' Arts, charities, and other non-profit groups are, too. "Telemarketing really has become the lead method of marketing in the arts,' Joanne Steller, director of marketing for Washington's National Symphony Orchestra, told The Washington Post recently. "It went from not being done to everybody doing it in the last four years.' Political organizations are also on to the trend: telemarketing is eclipsing direct mail as a means of canvassing and fundraising. For last month's midterm elections, the Republican party hired a private telemarketing firm to contact an estimated 11 million voters in what party officials describe as the largest telemarketing effort by a political party in history. (For lack of money, the Democratic Party went the traditional route and relied on volunteers to do most of its phone canvassing.)

Only in recent years has the longstanding practiceof doing business over the phone become an industry. The best estimates of telemarketing's size and growth are staggering. In 1983, companies generated $56 billion in revenue through the systematic use of telephone sales and marketing. This year telemarketing revenues are expected to be more than double that amount: $118 billion. There were 1,650 companies employing 4,500 people in telemarketing in 1980. Today, 140,000 companies employ over 2 million telemarketers. Marvin Cetron, author of Jobs and the Future, puts telemarketing at the top of his list of fastest growing fields and predicts 8 million Americans will be employed in it by the year 2000.

Not everyone is pleased with the telemarketingrevolution. Many consumers simply don't like receiving telephone solicitations at home. A number of states have considered legislation to restrict the practice, although industry lobbyists have blocked most attempts. Also, the growth of telemarketing has brought an explosion in telefraud. Usually operating out of low-rent offices called "boiler rooms' or "bucket shops,' the con artists behind telephone frauds use the same kinds of carefully crafted scripts, the same phone call technology that honest telemarketers do. Travel packages, health spas, college scholarships, satellite dishes, investments, charities--if it can be sold over the phone, there's a good chance somebody is selling it fraudulently.

Telephone fraud has even slipped into politics:phone solicitation is the chief source of campaign contributions to the Lyndon LaRouche organization. According to John Mintz of The Washington Post, LaRouche supporters have sold subscriptions to a LaRouche magazine over the phone, convinced people to pay for it with their credit card, and then made unauthorized withdrawals from their accounts. The wife of a World War II veteran and stroke victim told Mintz that the LaRouchies got $5,000 from her husband by calling him as often as ten times a day and saying it was his patriotic duty to contribute. A 75-year-old widow living in a mobile home complained to the Federal Elections Commission that she lost $30,000, her life savings, in "loans' to a LaRouche affiliate organization.

No one knows for certain how many peopletelephone scammers defraud each year, but law enforcement officials agree that this kind of fraud is on the rise. In 1982, the Senate permanent subcommittee on investigations estimated that investment phone scams alone took in $200 million. Two years later the subcommittee raised that estimate to $1 billion. Federal efforts to crack down on telefraud have been largely sporadic and uncoordinated. Though Washington has helped some states in their efforts to put boiler rooms out of business, few investigators think they have made more than a dent in the problem.

Calling the obstetricians

The telemarketing industry awaits its historian,but as far as anyone knows, the crooks seem to have preceded more legitimate users. Boiler rooms date back to the 1920s, when the purveyors of worthless penny stocks first discovered that a few dozen phones set up in a basement gave them the power to cheat and deceive on a national scale. Only in the 1950s did legitimate companies in fields such as publishing begin to utilize inhouse phone sales staffs. With AT&T's introduction of the WATS line in 1961, a few companies began to...