Do Not Call Registry expected to impose compliance costs on companies
- POSTED: 09 Oct 2013 22:50
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With three months to go before the Do Not Call Registry kicks in, companies expect to incur costs of compliance, such as employing a data protection officer.
SINGAPORE: Tighter personal data protection rules will kick in next year on January 2.
And one key feature is a Do Not Call (DNC) Registry that consumers can apply to, which will open for early registration on December 2.
This means companies that use telemarketing will need to make sure they are not calling users on the registry.
With three months to go, Channel NewsAsia finds out how some companies are gearing up.
One company gearing up for the tighter rules is PropNex, which has a 5,200-strong sales force, making it one of Singapore's largest real estate agencies.
Some 3,000 of its agents currently utilise telemarketing methods.
And over the next two months, the company will put these agents on a course, to ensure that their sales practices comply with the new personal data protection rules.
Mohd Ismail, chief executive officer of PropNex, said: "All in all, it will cost the company a start-up cost of at least S$100,000 for the first year.
“Moving forward, it will be more stable, probably to the tune of S$50,000 to S$60,000 annually. This is the cost of compliance."
The costs of compliance can be broken down into three key components.
Firstly, organisations will have to designate or employ a data protection officer to ensure that the firm complies with the Personal Data Protection Act.
PropNex estimates it would cost S$50,000 per year to have this new data protection officer on its payroll.
Telephone numbers will also have to be checked against the Do Not Call Registry -- it costs between one and 2.5 cents to check each number.
Depending on the data usage, a company could be paying between S$10,000 and $20,000 a year to check the numbers.
A one-off training cost will also be incurred, as companies educate their salespersons on compliance.
Wong Shih Shen, associate director of business development at Protiviti, said: "Small and medium enterprises that are new to the Personal Data Protection Act (PDPA) will be looking at an increase in cost to comply with the PDPA.
“But there are industry-related schemes, like the IDA’s (Infocomm Development Authority) iSPRINT,as well as SPRING's innovation and capability voucher that allows them to defray some of the costs."
According to PricewaterhouseCoopers (PwC), the telemarketing pool in Singapore could shrink by 50 per cent or more.
Tan Shong Ye, head of PwC’s head of Singapore IT risk and cyber-security practice, said: "The Do Not Call regulation will fundamentally change the telemarketing industry, in that telemarketers would have to think of how to make telemarketing messages enticing and attractive, so that consumers will provide the required consent.
"In other words, telemarketing will move from the ‘push’ model to the ‘pull’ model.”
But some analysts said this will not spell the end of the telemarketing industry.
Ajay Sunder, senior director of telecoms (Asia Pacific) at Frost & Sullivan, said: "Once the registry is opened up, there'll be a segment of the population which will register themselves, but within the first few months, that number will typically plateau off."
Mohd Ismail, CEO of PropNex, said: "Obviously, there are many other modes one can reach out --print and online media, roadshows, door to door visits, etc.
“But one of the more effective methods has always been telemarketing, for a simple reason. It is an active form of marketing versus a more passive approach.
“For instance, if you distribute flyers, people may not even bother (looking).”
Sectors likely to feel the brunt of the new data protection rules are property agencies, consumer banks and insurance agencies.
But analysts said it is the smaller companies that may incur heavier compliance costs as they do not have economies of scale.