Watchdog demands reform of direct marketing practices

4th Feb 2014

The direct marketing and data sector requires an overhaul of its current practices, according to the Direct Marketing Commission (DMC), which has published its Annual Report this week.

The commission claims that investigations into customer complaints about direct marketing in the last 12 months in the UK have found an alarming level of nuisance calls and text messages, as well as a number of issues surrounding how direct marketers were sourcing and using customer data.  

Some of the worst cases, it said, included “a lack of concern by some about whether [direct marketers] had the necessary arrangements in place to ensure their activities complied with regulations and industry best practice”.  

In particular, the cases reveal common failures in companies being able to cite the actual origin of consumer data they held, or if it had been tested for accuracy and necessary permissions.

“The volume and nature of complaints we investigate shows that we need to take a root and branch look at how companies collect, source, sell and test consumer data,” says George Kidd, chief commission for the DMC.

“Some businesses make fantastic, creative use of data, delivering offers and services that are tuned to our personal needs and preferences. But there are times when other preferences and rights – not to be sent messages and calls which we have not agreed to or have said we do not want – are being ignored as companies pursue short-term gain, most obviously in the personal injury and Payment Protection Insurance (PPI) fields.

“It’s not acceptable for businesses in this sector not to be able to explain where their data and the permissions on its use came from or for firms to dupe those they mail and call with mock surveys and ‘research’ that open the door to sales and marketing calls, texts and emails from total strangers.”

Currently, responsibility for telemarketing and mobile marketing is spread between Ofcom and the Information Commissioner’s Office, however the DMC believes there is now a case for creating a co-regulatory body to tackle the issue of unwanted contact.

“There is no magic solution to these problems of privacy and the misuse of data, and it will require a concerted effort in the industry to find solutions to the problems,” George Kidd adds.

“It’s essential that this is guided by the principle of ‘putting the customer first’. Failure to do so will ensure that complaints about our industry will continue to rise and consumer confidence in direct marketing will decline.” 

The direct marketing industry’s other global association, the DMA, hailed Ofcom’s standards set on nuisance calls and spam texts in 2012, stating it could help bring an end to unsolicited contact from direct marketers, as customers had more information on best practice for blocking unwanted messages.

However, this latest round of research appears to state otherwise. Over 75% of customer complaint calls the DMC investigated were related to data, privacy and quality of source concerns.

And despite the DMA reporting last year that customer perception of email marketing was at an all-time high, this latest report suggests that data in direct marketing is likely to be a major topic of discussion for commissioning bodies, especially in relation to personal injury and PPI firms. Businesses in these two sectors are already under-fire for their targeted advertising methods, but could now be receiving further bad news in relation to how they deliver their direct marketing campaigns.         

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