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DMA address privacy concerns through new Code of Practice
The UK Direct Marketing Association (“DMA”) has released a code of practice (the “Code”) to address consumer concerns around data privacy and UK marketing practises, with the aim to “inspire the industry” to serve each customer with “fairness and respect”. The Code has been developed following consultation with key stakeholders including the Information Commissioner’s Office and Ofcom, and came into effect for the DMA’s 1050 corporate members on Monday 18 August 2014.
Interestingly, the DMA view that by putting customers at the heart of business activities, businesses will prosper in a sustainable way seems to reflect a wider change in market attitudes towards the importance and benefits of privacy and transparency.
The Code sets out five principles which go “above and beyond compliance with the law”, encapsulating the DMA’s view that it is possible to comply with laws whilst still failing to meet the expectations of customers in respect of how their data is used. Members are therefore required, on top of all legal requirements, to achieve each of the following principles and intended outcomes:
- putting customers first – ensuring customers receive:
- a positive and transparent experience;
- only such marketing information as is relevant to, and reflects the preferences of, that individual customer; and
- prompt, efficient, and courteous advice;
- respecting privacy:
- providing customers with an understanding of the value exchange when sharing personal information;
- being upfront and clear about why data is being collected, and how it will be used;
- being sensitive and avoiding intrusive and/or excessive marketing activities; and
- not targeting vulnerable customers (such as children) irresponsibly;
- acting honestly and fairly:
- being clear, open, and transparent about all costs and processes;
- not misleading customers (whether through omission, exaggeration, or otherwise); and
- delivering what is promised;
- being diligent with data - ensuring:
- customers always know who is collecting their data, why it is being collected, and what it will be used for;
- all customer data held is accurate, up to date, and not retained for longer than necessary; and
- customer data is held safely and securely; and
- taking responsibility of their actions:
- having resources and systems in place to carry out agreed contracts;
- taking responsibility for the entire customer experience, whether provided in-house or outsourced to a third party; and
- taking responsibility for their commitments and fixing things if they go wrong.
Whilst the hero principle, “put your customer first”, is broadly stated by the DMA as intending to encourage the evolution of one-to-one marketing as an exchange of value between businesses looking to prosper and customers looking to benefit, the remaining four principles provide a series of specific rules which guide members towards achieving the various outcomes listed above.
There is a general concept underpinning the Code that members should be clear, open, and transparent when dealing with customers, which is built on by the definitive actions that either must, or must not, be taken by members pursuant to the rules under each principle. These rules range from compliance with the Data Protection Act 1998 and Privacy and Electronic Communications Regulations 2003, in particular when sending unsolicited one-to-one marketing emails or SMS communications, to members not misleading or misrepresenting themselves to customers (for example, stating they are carrying out research when the real purpose is to sell goods or services).
It should be noted that, although the Code is only formally binding on DMA members, subcontractors (whether DMA members themselves or not) used by such members are also expected to comply with the Code, with members taking responsibility for the consequences of any non-compliance by such subcontractors.
The Code is backed by a series of channel-specific guides which cover best practice and compliance with regulations, and will be enforced by the industry’s independent watchdog - the DM Commission (“DMC”). Sanctions for non-compliance include:
- a formal recommendation to the DMA;
- a formal visit to the infringing member by the DMA;
- the member being required to provide a formal undertaking to comply with the standards set out in the Code;
- the member being required to provide an undertaking to carry out specific changes in processes, procedures, management, or other arrangements to ensure compliance with the Code;
- a recommendation by the DMC to the DMA that the non-complying member’s DMA membership should be suspended or cancelled; and/or
- referral by the DMC to the relevant law enforcement and consumer protection bodies.
Whilst only DMA members are strictly required to comply with the Code, all companies are encouraged to operate in accordance with the Code in order to cultivate a profitable and successful commercial ecosystem by addressing customer concerns around data privacy.
For further information, please contact Nicola Fulford.