DMA Blasts California Disclosure Bill

The Direct Marketing Association is taking no chances that California Senate Bill 27, requiring that companies inform consumers when they have shared data with third parties, will make the final cut.

The DMA called the bill, which is up for reconsideration following a 38-12 defeat in the state assembly on Aug. 21, a “serious attack on direct and interactive marketing in a state that accounts for over $60 billion in sales.”

DMA president H. Robert Wientzen added in a statement yesterday that “this proposed legislation is the equivalent of California shooting itself in the economic foot.”

Introduced last year by state Sen. Liz Figueroa (D-Fremont), the bill would require companies that sell information to direct marketers to disclose to customers — on request — exactly what data has been shared on them. They would also have to identify the direct marketers by name.

The information would include what products the consumers bought, the age and gender of their children, height, weight, race, religion and income.

Consumers with an established relationship with a firm would be able to request the information once a year. Firms that ignored the requests would face fines of up to $3,000.

The DMA argued that the bill could facilitate identity theft because there is no way to verify the identity of the requestor. It also said that the bill would pose “logistically difficult challenges” to direct marketing companies doing business in California.

The association continued that California’s direct marketing sales represent one eighth of all DM sales nationwide, and that the industry employs roughly 259,000 people in the state.

Figueroa said in August that “current privacy notices say nothing specific about what information is shared and what businesses get it. Consumers have the right to know what personal information is sold and whether it is sold to reputable affiliates, fly-by-night companies or adult businesses.”

Meanwhile, a motion to reconsider the bill has been introduced in the assembly, but no action had been taken at deadline.

Figueroa blamed the financial services industry for the assembly defeat. She argued that when “banks and insurance companies decide to remove their opposition to a private bill, it passes almost unanimously. But when they still vehemently oppose a bill — even a bill that just requires disclosure of what they say about us — it dies.”

On Aug. 27, California Gov. Gray Davis signed SB-1, Sen. Jackie Speier’s financial privacy bill requiring banks to obtain a consumer’s permission before sharing information with outside companies.