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Direct Marketing Commission - Enforcing Higher Industry Standards

Phruit Ltd – complaint about direct marketing

November 22nd 2010

This case related to telemarketing activity undertaken by Phruit. The Commission investigated following a complaint from an individual consumer who was registered with the Telephone Preference Service (TPS).  The consumer had been contacted with the offer of will-writing services having previously been contacted by Phruit in what seemed to be a lead-generation exercise carried out in the guise of research.  The investigation involved contact with the original complainant, a review of  TPS and other web-based complaints and an attempt to validate compliance with TPS cleansing. Over 100 complaints involving people who had registered with TPS were attributable to Phruit directly or to companies using their data. The Commission had access to over two years of dialogue between the DMA’s compliance team and Phruit that was anchored in ongoing concerns over TPS compliance and the misrepresentation of research.

Based on the evidence presented – including a number of admissions by the company – the Commission reached a view that the company had been misrepresenting itself as a researcher when making calls that were really designed to sell goods or services. The practice was found to be the cause of the considerable number of public complaints over what was seen to be Phruit’s cold-call marketing. This, in turn generated subsequent complaints when UK firms used Phruit data and called TPS subscribers in the possibly misplaced understanding these people had opted-in to receiving marketing calls. While Phruit responded in part to some questions the company failed to provide key data and information over its TPS practices and its commercial arrangements.

The Commission found Phruit in breach of the following provisions of the Code – 21.18 and 21.20 on TPS compliance and data cleansing, 3.11 under which Phruit has a responsibility for compliance by suppliers and 3.18 on “sugging”: marketing in the guise of research.  The Commission decided this was a very serious case involving fundamental code provisions on TPS compliance, misrepresentation and the failure to ensure contractors were code-compliant. The Commission proposed membership of the DMA be suspended for a period of at least one year and that the lifting of this suspension thereafter be conditional on evidence from Phruit of action taken to ensure compliance with the Code of Practice.   This proposal has now been implemented by the DMA – please see here for a link to details of the suspension on the DMA website.

If you believe a DMA member is in breach of the Direct Marketing Code of Practice then contact the Direct Marketing Commission – you can alert us to an issue you see here.