India’s card issuers are bracing for a change in telecommunication rules that, while fighting mobile spam, prohibits them from sending text message solicitations to some prospective credit card customers.
The new rule from the Telecom Regulatory Authority of India took effect Sept. 27. It prohibits any telemarketer from sending promotional text messages to individuals on the regulator's Do Not Call Registry.
The registry blocks any telemarketing agencies or service providers such as banks, insurers and telcos from trying to contact listed individuals. The rule previously applied only to phone call solicitations. Violators face fines of up to 2.5 million rupees (US$51,000 or 38,000 euros).
This has dealt a severe blow to the customer-acquisition process, says an official at one Mumbai-based multinational bank, which is looking to increase its card base in India.
“Text messages were a nonintrusive way for us to send our offers to prospects,” he tells PaymentsSource, noting he did not want his name or that of the bank’s to be identified. “But because of mobile spam from everywhere else like real estate agencies, shopping portals and clinics, we too have been barred.”
The bank probably will cancel only some of its contracts with telemarketing agencies because many consumers have not signed up for the registry and still may be approached via text message, says the official.
An official at Mumbai-based HDFC bank Ltd. said the rules will affect customer acquisitions but hoped it also would help to generate a more loyal customer base because “now only those who really want a credit card will call the bank themselves.”
The rule change does not prohibit banks from sending customers text messages for transaction alerts.
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