The Direct Marketing Association has issued new regulations that clarify and strengthen what it considers ethical practices among data compilers. The long and short? Compilers are going to have to take a much more active interest in who their clients are and what they are marketing.
Under the new guidelines, when entering into agreements with third-party organizations for the rental, sale or exchange of consumer information, a data compiler must:
* Establish written or electronic agreements that define the rights and responsibilities of the compiler and customer with respect to the use of marketing data.
* Require customers to state the purpose for which the data will be used.
* Include language in their agreements with other DMA members that requires compliance with applicable laws and DMA guidelines. Non-DMA member customers should be required to follow all applicable laws and encouraged to comply with DMA’s guidelines.
* Require that marketing data be used only for marketing purposes. If the data are non-marketing data but are used for marketing purposes, they should be treated as marketing data for purposes of this new DMA guideline.
Furthermore, to ensure that customers are using data properly, DMA will now require its data compiler members to randomly monitor, through seeding of lists or other means, the use of their marketing databases to ensure that customers use data in accordance with their stated purpose.
Additionally, for sensitive marketing data, compilers should review materials to be used in promotions to help ensure that their customers’ use of the data is both appropriate and in accordance with their stated purpose. Sensitive marketing data include data pertaining to children, older adults, health care or treatment, account numbers, or financial transactions.
If a database compiler is, or becomes, aware that a customer is using consumer data in a way that violates the law and/or DMA’s ethics guidelines, it should contact the customer and require compliance for any continued data usage, or refuse to sell the data and/or refer the matter to the DMA and/or a law enforcement agency.
The new guidance also lays out clear requirements for data compilers in responding to consumer inquiries, including:
* Upon a consumer’s request, and within a reasonable time, suppressing that consumer’s information from the compiler’s and/or applicable customer’s prospecting database.
* Not prohibiting an end-user marketer from divulging the database compiler as the source of the marketer’s information.
* At a minimum, explaining to consumers, upon their request for source information, the nature and types of sources they use to compile marketing databases.
This is a far cry from the DMA’s original guidelines. According to the (now supplanted) article 35 of Marketing List Usage, “List owners, brokers, managers, compilers, and users of marketing lists should ascertain the nature of the list’s intended usage for each materially different marketing use prior to rental, sale, exchange, transfer, or use of the list. List owners, brokers, managers, and compilers should not permit the rental, sale, exchange, or transfer of their marketing lists, nor should users use any marketing lists for an offer that is in violation of these guidelines.”
The new guidelines have been under design by the DMA’s committee on ethical business practice for the past year, according to DMA director of public affairs Stephanie Hendricks. But in a moment of fortuitous timing, they are being released shortly after the New York Times ran an article accusing data compiler infoUSA of inadvertently aiding scam artists in their efforts to defraud senior citizens.
Shortly after the article appeared in late May, infoUSA’s CEO Vinod Gupta denied any culpability, saying “We have four million customers, and we have no way of knowing how they use our lists. We require that they abide by our policy that they use it for lawful purposes. When somebody buys a gun legally and goes and kills a bunch of people, you don’t blame the gun dealer.”
Compliance with DMA guidelines is a condition of membership.
“We are not doing this in response to infoUSA,” Hendricks said. “I wish we had been able to wrap this up a month ago.”
More information on the new guidelines is available at www.the-dma.org/guidelines/quickreference.shtml.
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