DMA Ethics Panel Hears 22 Cases in Fourth Quarter

The Direct Marketing Association’s committee on ethical business practice handled 22 cases between September and November, 1998, with eight of the cases addressing sweepstakes, six pertaining to collection, use and maintenance of marketing data and eight concerning general advertising and business practices.

In one case, the ethics committee decided that marketing of a weight-loss product and a consumer’s possible need to lose weight is considered to be sensitive in nature, and should not be the basis for list rentals. The committee is awaiting the company’s substantiation of weight-loss claims as well.

Among the data practices cases, one case was closed when a company employing telephone marketing demonstrated that it had a written do-not-call policy, as required by the Telephone Consumer Protection Act, and documented that it added a consumer’s telephone number to its “do not call” list.

In one sweepstakes case, qualifying language connected to a prize was omitted, and the company involved acknowledged the omission as an error and modified its promotion to the ethics committee’s satisfaction. In another concerning the likelihood of a consumer winning a prize, the committee decided the sweepstakes package, taken as a whole, included all the necessary disclosures in appropriate places, placing the package within the bounds of acceptable, ethical copy.

Two cases where companies asked respondents to remit money “to purchase a sweepstakes report” or purchase costume jewelry are pending closure. It is illegal to require consumers to pay any amount, or to make a purchase, in order to enter a sweepstakes. A third case, regarding a prize promotion that is not a sweepstakes, is also pending, awaiting an explanation of the prize offer from the company.

In addition, DMA consumer services staff handled approximately 250 complaints from consumers through the association’s mail order action line, most concerning non-delivery of promised merchandise refunds, or receipt of unordered merchandise.

“This process of reviewing cases, making inquiries of companies, and reporting the results is extremely successful in educating the industry about the right way to conduct business affairs,” said Marsha Goldberger, DMA director of ethics and consumer affairs, in a statement.