Start making phone calls, marketers: Congress and the Obama administration are mulling or implementing a number of new policies regarding regulatory oversight, and if these are left unchallenged the direct marketing community is not going to like the results.
The first threat is a Congressional attempt to create a new Consumer Financial Protection Agency (CFPA), according to Linda Woolley, executive VP for government affairs at the Direct Marketing Association. This bill would create a new governing body which would monitor many basic actions marketers take. Such as? Buy one, get one free offers, negative option programs and offers that allow customers to take six months (or however long) to pay for their purchases.
In short, “Any extension of credit for any reason,” Woolley told the Direct Marketing Club of New York during a presentation last week.
The good news, according to Woolley, is that tweaks to the House version of the bill (H.R. 4173) provide for exemptions to the bill’s provisions for marketers and retailers – at the discretion of the proposed CFPA’s director. But the bad news is that exemption might not survive the Senate’s tweaking.
The better news for marketers is that as of late last week – after Woolley’s presentation – reports out of Washington have the Senate version of the bill stalled, primarily due to Republican opposition to creating the new agency.
According to a report in the Los Angeles Times, Republicans would be willing to support the bill if the new agency were moved under the Federal Reserve – an option rejected by Democrats. With both parties drawing their lines, the bill’s future has become much murkier.
This isn’t the only front on which marketers are facing more regulation. Other efforts afoot call for expansion of the Federal Trade Commission’s authority. Under a current proposal, the FTC would be given immediate civil penalty authority – the ability to levy judgments without current processes or negotiations, Woolley said.
Additionally, the FTC would be able to prosecute organizations for “aiding and abetting” fraudulent marketing practices, even if these organizations weren’t the marketers themselves. And these legal challenges would be made through ain independent litigating authority, as opposed to the Department of Justice.
Then there’s online privacy and data security. House Rep. Rick Boucher (D-VA) is preparing a bill which would provide more stringent opt-in requirements for marketers, as well as creating standards for data security and data breach notification. Boucher’s bill is expected to be presented in the spring.
The FTC is holding privacy workshops, Woolley said, and the DMA has participated in these, advocating industry-wide implementation of self-regulatory principles for online behavior advertising practices. Ideally, these would be identical to the ones the DMA mandates for its members.
Finally, Woolley noted the proposed five-day delivery plan for the postal service. Officially the DMA does not have a position on this proposal and is waiting to have some ambiguities in the proposal cleared up. What, exactly, would be limited to five days? Delivery? Retail operations? Current plans bandied about don’t say.
Asked what concerns her, Woolley listed five items. These included the efforts to strengthen the FTC and Rick Boucher’s proposed privacy legislation. But she also mentioned Senator Jay Rockefeller’s (D-VA) investigation into post-transaction credit card activities, an investigation which could result in close examination of negative option programs.
Additionally, she said the DMA is keeping an eye on local do-not-mail bills, as well as a Colorado effort which would require marketers to either notify customers of their need to pay taxes, or to collect them on behalf of the state.
Woolley urged marketers to keep abreast of issues through the DMA’s legislative action Web site (http://www.dmaaction.org/).
