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Direct Marketing Commission - Enforcing Higher Industry Standards

Minutes – 27th November 2014

Minutes – 27th November 2014

 

 

MINUTES

of the

DIRECT MARKETING COMMISSION

on

Thursday 27th November 2014
at
DMA, 70 Margaret Street, London W1W 8SS

Present:

George Kidd, Chief Commissioner
Rosaleen Hubbard, Independent Commissioner
Martyn Percy, Independent Commissioner
Danny Meadows-Klue, Industry Commissioner
In Attendance:

Suzi Higman, Secretary, DMC
Mike Lordan, Chief of Operations, DMA
John Mitchison, DMA

1.  WELCOME AND APOLOGIES

David Coupe had given apologies for absence.

2.  APPROVAL OF MINUTES OF 30th September 2014

The Commissioners had confirmed that the Minutes were an accurate account of their last meeting.  These had now been published on-line.

3.  MATTERS ARISING

Matters arising were reflected later in the agenda.

4.  CHIEF COMMISSIONER’S REPORT

a. Proposal for new Independent Commissioner
GK had proposed a replacement for MP who was due to retire from the Board.  A meeting was to be arranged between ML and one existing Commissioner to consider GK’s recommendation.  ML would then seek approval from the DMA Board this month.  It was suggested that the replacement would commence 1st January 2015 if procedures were completed by this time.  MP offered to stay on until Easter 2015 if required.

Other matters:
GK reported on the recent work of the DMA’s Governance Committee.  GK suggested to ML that he attends a future DMA Board meeting to update them on DMC matters and said that it would be helpful to invite the DMA’s Chair at a future DMC meeting to talk about DMA matters.

The Commissioners discussed the DMA Governance Committee’s Risk Register and looked at the next ‘big’ topic for nuisance calls which they thought could be the pensions market.  They discussed how the DMA and DMC could position themselves with this in mind.

JM gave background information on Operation Linden, an ICO led initiative which brings together regulators, consumer groups and trade associations to share information about the use of personal data in the context of lead generation.

Action Point:  SH to circulate Data Guidelines including section on Buying & Selling Data to Commissioners.

5.      COMPLAINTS UNDER THE DMA CODE

a. Breakdown of complaints: September/October 2014
SH had circulated reports for complaints in each of these months.  SH reported on a case which had been discussed in previous meetings which related to survey panelists who had complained that on nearly reaching the minimum payment threshold for competing surveys, ceased to receive further surveys.  The case had been informally resolved and the member had explained its panel recruitment and survey processes and assured the DMC that it had taken action in addressing the customer service issues previously highlighted by the Secretariat.  No formal action had been deemed necessary unless new and/or different complaints were received.    The member has since contacted the Secretariat to thank the DMC for input into its process.  They have said they continue to implement and apply the changes agreed in line with the new Code principles – particularly to be clear, open and transparent.  They have posted an explanation online offering an explanation and apology to customers.

SH reported on a complaint from a consumer who, though not registered on the TPS, said he had been contacted by a DMA member by telephone with the intention of conducting a lead generation survey.  The consumer had questioned the agent who had appeared uncertain as to the purpose of the call.  Following investigation it had transpired that the call had not been made by the member, but rather by a lead generation company outside of membership and the member (also a lead generator) had sponsored a question on the survey. This investigation highlighted not only the importance of ensuring agents are adequately trained as to the type of call they are making, but also the importance of transparency, so that companies that use generic trading style names when they make calls can be easily identified.

JM reported on latest issues emanating from the ‘Which’ taskforce on nuisance calls.

b. Update on formal adjudication
SH reported on the outcome of a recent adjudication on a member company which runs membership and discounts clubs for consumers.  At the last meeting, it had been decided that the case should be completed formally given the principle involved in relation to the notification of price changes, particularly in relation to contracts with an auto-renewal element. The adjudication had now taken place and the case was upheld in relation to the provision of fair and reasonable behaviour.

Commissioners thought the issue of prior notification should be shared with the DMA membership. ML agreed to look at how this could be undertaken.

c. Update on an informal investigation
At the last meeting Commissioners had been informed that SH and GK would be meeting with a member company, following an informal investigation which had related to a single complaint from a gentleman who said he had received hundreds of direct marketing calls about PPI from the company since August 2013.  The member has said that they did not source the complainant’s data nor sell it on and that they had not rung him at any time. A fuller summary of this case is detailed in previous minutes.  The Commissioners had agreed that adjudication was not appropriate whilst a court case was ongoing, but that there were concerns around their business model and affiliate systems.

GK and SH had met with the member’s Managing Director who had clarified their affiliate process and offered assurances of their due diligence and TPS and DNC procedures. The MD had explained that his company had ceased working with affiliates overseas and since May this year only worked with affiliates in the UK.  He said that was not a decision made simply due to the current complainant’s case but rather because the risk of issues occurring with these types of affiliates was higher when compared to working with UK affiliates where he had a greater degree of control.

The MD had made some general suggestions which he believed the DMC could lead on to help improve compliance in the lead generation industry – this included the provision of a central register of DNC lists; the importance that companies in the lead generation business understand the consequences of their processes; and the suggestion that the DMA undertakes ‘spot-checks’ on its members as part of the audit process.  In the meeting, GK had tested the strength of clause 4.3 in the Code which asks that members normally take responsibility for their suppliers and others.  He questioned if this clause was clear as to members’ responsibility for their affiliates.  The member did not think companies considered themselves liable for the action of affiliates and thought making this clause more explicit would make a difference.

It was agreed that no further action needed to be taken at this stage in relation to this particular complaint, and that the company appeared to carry out adequate due diligence.  It was felt likely, however, that complaints of this nature would arise in other situations where there is a business model working with affiliates in this way.  The Secretariat would liaise with the DMA to ask the relevant Councils their view on the Code clause in question and whether they considered it to cover responsibility for affiliates.

6. FORMAL ADJUDICATIONS

(i) SH reported on a recent referral from the DMA to the DMC following a fine issued by the ICO to a DMA member company.  The fine was in relation to calls made to TPS registrants about PPI claims.  SH said that information is currently being gathered and a date for adjudication would be circulated in due course.  As a detailed investigation has already been undertaken by the ICO, the DMC would be looking at the case in relation to clause 4.2 of the new Code which asks that members should not do anything to bring into disrepute the public image of one-to-one marketing or the DMA.

(ii) A formal investigation into a member company, recently the subject of a fine from OFCOM, was discussed by Commissioners.  The case had related to a fine for making abandoned calls over three separate days during a seven week period.  The DMA had referred the case to the DMC and Commissioners discussed the case in relation to clause 4.2 of the new DMA Code on disrepute and public image.

RH declared a conflict of interest on this case and left the room so that the discussion could take place.

Commissioners decided that there was no necessity to conduct an adjudication because the investigation had already taken place by the regulator, and remedial action had been taken. A letter would be written to the company to explain that we had noted that this action had been taken.

Action Point: SH to write to member informing them of the Commissioner’s comments.

7. ICO MEETING – DATA-SHARING

GK and RH reported on a recent meeting with the ICO to discuss data-sharing between our two organisations. It was agreed at the meeting that DMC would be added to a distribution and attendee list for Operation Linden – a group set up to focus on the relationship between lead generation companies and unwanted communications.  The ICO had circulated the latest delivery plan, minutes and strategic threat assessment paper that could lead to these types of unwanted communications.  Operation Linden includes regulators, consumer groups, and trade associations. The ICO also agreed to provide the Secretariat with details on contacts at ICO for data-sharing requests on specific cases and to provide a template for a statement which could help formalize our data-sharing arrangements.

SH and GK agreed to produce flow charts describing what the ICO are looking for from the DMC and vice versa.

Action Point:  Secretariat to produce flowcharts.

8. DMC ANNUAL REPORT – UPDATE

SH reported on the status of the Annual Report.  It had previously been agreed with the DMA communications department that work on the report would commence in November.  However, it had been delayed because of the workload at the DMA.  It had now been agreed that the report would be produced in December.

9. GENERAL MATTERS

a. DMA activities
ML reported on latest activities at the DMA.  ML also updated Commissioners on the serious issue of ‘spoofing’ and ‘cloning’ in the telemarketing industry.

DMK suggested that the DMA produce a written item on the issue which could be placed on the DMA and DMC website.

b. Governance, Preference Services & Compliance Report
The Governance, Preference Services & Compliance Report had been circulated to Commissioners.

10. ANY OTHER BUSINESS

There was no other business.

11. FUTURE MEETING DATES 2015

Tuesday 24 February
Thursday 21 May
Tuesday 15 September
Tuesday 24 November