"It's a fundamentally flawed act,
argues Tony Lamb, chair of the DMA's Data Council. "It's legislation for legislation's sake. There seems to have been no understanding of what businesses need to do to comply with the act. No company is able to adhere to it."
Under the provisions of the Act, direct marketers have to maintain 'clean' data (of which there is no definition) and ensure that any marketing information sent to consumers has their consent. "We're not talking about not wanting legislation,
says Alex Walsh, head of legislative development at Royal Mail Media Markets. "Not targeting people who don't want mail is a good thing, but it's the nature of the act.
It is still unclear, the panel argues, if doing even the simplest customer service activity contravenes the act - something as benign as mailing existing customers about other products.
"If I'm Prudential and I have insurance customers, I can't mail them with pensions information because they now have a right not to receive DM,
explains Tony Coad, founder of NDL (now Claritas), and now head of data consultancy CCB. "Any future data gathering has to ask customers if they object to being contacted, even though these people are on my database."
It's a confusing area because, according to Steve Rand, board secretary at book club BCA and the man to whom the legal team reports, there seems to be no room for common sense. "The Data Protection Act doesn't seem to revolve around what can be reasonably anticipated,
he says. "If someone applies for book club membership it's a leading implication that we're going to send them material. As I understand it though, any consumer responding to one club from a newspaper coupon can't be mailed with information about another club because that was not what they originally enquired about."
Taking the legal word to the letter, all companies are likely in some respect to be in breach of the Act, and that's why the group believes this Act is of little use to the industry.
"The irony,
says Coad, "is that people are not overwhelmingly disgusted by direct mail; the industry has done a lot in the last ten years to clean itself up. With this Act we're getting into very academic discussions about data that fail to recognise business requirements." This point, he argues, is backed up by statistical evidence.
Complaints about direct mail fill four per cent of the Information Commissioner's post-bag compared to 44 per cent ten years ago. And, adds Walsh, this lower figure comes at a time when the propensity to complain is greater.
The background to the implementation of the Act in the first place is also a bone of contention. "It wasn't bad DM that first highlighted us to the then registrar Eric Howells,
says Coad, "it was unscrupulous timeshare companies flooding the market.
It's a shared sentiment. "All of a sudden,
supports Walsh, "an area that hadn't been on the radar was suddenly the worst thing that could be done to people's information. It still seems to me that if you receive some direct mail that you didn't specifically ask for it's not in the same league as corruption and misuse of data that is the original intention of the Act."
But is the industry just smarting at being told to clean up its act or is compliance truly unworkable? According to Coad the only people who are benefitting are the lawyers, who have spotted a commercial opportunity by "interpreting the law in a totalitarian way". It is a point that Iain Garfield, solicitor at BPE, refutes, saying that marketers cannot afford to be belligerent on this subject.
"All companies must place data protection compliance on their list of priorities.
He accepts that "total compliance is virtually impossible", but argues that because the Act is complaint driven, many companies "do not have the incentive to become compliant".
Coad, however, argues that the reason for non-compliance is not for want of trying, but because companies cannot warrant the cost. "Companies, with world-wide subsidiaries, cannot have a centralised database anymore.
You may well record permissions on one part of a system, but these could easily be replaced by another somewhere else on the system that does not get noticed,
he explains.
Small companies - those who may be thinking of doing CRM-type relationship building - could be priced out of the market, chips in Walsh, because of the high cost of a robust IT infrastructure. And, with no clear lead from the Information Commission or Europe on whether the choices offered to consumers are to be opt-out or opt-in, designing these systems is, he argues, likely to be even harder still.
As soon as these problems become more commonplace, and when consumers find themselves unable to secure credit references because they have opted out of direct mail, the Government will be forced to pull this thorn from its side, says Lamb.
Walsh, however, is less optimistic. "The rest of Europe is moving more and more towards agreement on permission- based marketing. I think the Government would have to fight a hard battle against this and they won't because it's something that I don't think is important to them."
Who exactly values the law was a moot point. Key to the DM industry's resistance to the Act is a sense that complying with it - even if it means better customer relationships - is a fruitless exercise. Most significantly the Information Commission has no budget for taking errant companies to task for not complying. This also creates a lack of case law to inform any legal team about how best to act.
"The Commissioner only has enough money to take one or two companies to court per year, and this makes it a nonsense,
says Coad. "As for consequences, this can be explained by work we did with The Telegraph. I had a customer request that his details be totally removed from our mailing list. I explained that by doing this, we will have no record of his wish not to receive DM in the first place, because we process this wish within our internal suppression files. The Act tells us we must remove this data if the customer so requests, which means far from getting less DM, they will get more."
This so-called 'evangelical' position, which Coad says the Commissioner is now adopting, means the Act is fast turning into a farce. And, says Rand, finding alternatives to get round this - such as sending non-personalised 'occupier' mailings - will only make the industry go backwards. "As we all know your response falls and you send out more mail - the opposite effect to that which is desired is created,
he says.
Garfield concedes this is a serious problem. "The Act does has teeth but perhaps the problem lies in the fact that the Information Commissioner does not bite. Unlimited fines for both the company and its directors are substantial penalties, but these are not backed up by actual prosecutions."
So do the practicalities of the Act and the lack of any legal will to enforce it signal that there is no need to panic? Garfield says this is not the case. "You can't afford not to know about it, and you can take steps to help you avoid contravening the act,
he argues. "It doesn't cost a lot of money to read about the Act and contact your local trade association for advice. The important thing to know is that if you breach it you are in breach of the law, and you need to know what could happen to you."
It is within this climate that Rand, Coad, Garfield and Walsh believe the DMA has an opportunity to champion itself among this muddle. Lamb says the DMA does not want to become a centre for legal advice and nor does it have the resources, although it has produced a booklet which is an abridged version of the Act and how to follow it.
Significantly, the DMA has just launched the first Data Protection Compliance Award, a three-day scheme which aims to help marketers navigate through the complexities of legal compliance. Lamb says at the moment there is simply nothing else out there for marketers to learn from. The Information Commissioner's website points visitors to contact their appropriate trade body. This, argues Coad, not only reinforces the fact that the Commissioner isn't really interested in the minutiae of the direct marketing industry, but is insulting to the DMA given the lack of equal consultation that Lamb feels the organisation has had in the process. "The great success of the Data Protection Act,
sums up Coad, "is that it has struck so much fear into people with such little force behind it."
But for all the controversy, there's no doubt that marketers cannot afford to take a cavalier attitude to their data strategy. There is a suggestion that the Act is deliberately vague about how often data is cleaned so that each industry sector defines its own standards. In a sense then, allowing self regulation - what the industry really wants - could still be the way the Act operates. The Act also points the way for standards to be observed in direct marketing, which has to be a positive principle for all the industry to accept. One thing's for sure - Information Commissioner Elizabeth France won't be on any of our Think Tank panelist's Christmas card lists this year - but then if she was, maybe she'd need to be asked first.
Marketing Direct is pleased that our Think Tank is in association with Broadsystem, leading provider of outsourced marketing solutions. For more information contact Paul Gill on 01753 433000 or www.broadsystem.com
THE PANELIST LINE UP
Tony Coad - co-founder and chairman of CCB
Tony Coad managed an evening newspaper and EMAP Business and Computer Publications before setting up lifestyle database company NDL International (now Claritas) in 1985. He joined the board of Telegraph Publishing in 1994 and was responsible for its data-driven initiatives. He co-founded CCB in 2001 with colleagues David Cole and Bill Burey.
Iain Garfield - commercial solicitor at BPE Solicitors
Garfield's main activities at BPE in the data protection field includes interpreting the Data Protection Act, drafting compliant contracts,advising on procedures for demonstrating compliance, responding to subject access requests and defending actions for non-compliance. He also specialises in e-commerce.
Tony Lamb - owner of Lamb Direct Consulting and chair of DMA Data Council
Before starting his own consultancy, Lamb was managing director of business marketing data and database solutions for Conduit Business Information, which he founded in 1995.
Stephen Rand - company secretary of BCA
Stephen Rand joined BCA 24 years ago and is now responsible for its legal and regulatory affairs and has overseen the introduction of the Data Protection Act.
Alex Walsh - head of legislative development, Royal Mail Media Markets
Walsh started his career at Chevron Oil as a marketing analyst working on pricing and promotions for the UK market. He then moved to Bell & Howell as European product manager of consumer products and eventually global product manager of business products. He joined the Royal Mail in 1998.
THINK TANK: WE'D LIKE TO HEAR FROM YOU
We are interested in hearing your ideas for issues to discuss in Think Tank. If there is a subject you think deserves an airing, please contact Holly Acland, editor, Marketing Direct, 174 Hammersmith Road, London W6 7JP. Tel 020 8267 4234 Fax 020 8267 4192. Email: holly.acland@haynet.com
.jpg)
.jpg)