Direct Marketing Commission - Enforcing Higher Industry Standards

The Information Tribunal has awarded Reactiv Media an fine of £75,000, increased from £50,000 during an appeal hearing held in York last week. Reactiv had consistently called consumers registered with the Telephone Preference Service (TPS).

The story begins last year, when Reactiv Media, then a DMA member, was investigated by the Direct Marketing Commission (DMC) for making nuisance calls about spurious PPI claims to consumers registered with the TPS.

The DMC concluded that Reactiv should be expelled from the DMA in April 2014.

George Kidd, chief commissioner of the DMC said, “Other telemarketing companies have worked with us and turned past problems around. Those who use companies like Reactiv Media to generate leads share a responsibility. They should not be encouraging firms to bend or break rules that are there to make sure the public’s wishes are respected when it comes to telemarketing.”

Reactiv Media then came under the scrutiny of the Information Commissioner.

Between 13 November 2012 and 31 December 2013, the TPS received 481 complaints about Reactiv Media, and referred those complaints to the Information Commissioner. The Information Commissioner received a further 120 complaints.

In July 2014, the Information Commissioner issued a fine of £50,000 to Reactiv Media for ‘bombarding people’ with nuisance calls. The full notice is here.

Reactiv Media then appealed this decision.

In the appeal decision, which reported its findings on 13 April, the tribunal concluded that Reactiv Media displayed, “A culture of denial and minimisation of the breach, weak governance of the company and a tendency to blame others rather than accept responsibility. There is little evidence of robust policies and procedures coupled with a culture which properly respects telephone subscribers and their right to privacy.”

In addition, when the Information Commissioner awarded the initial fine, it had limited access to Reactiv Media’s financial records, and was “Hampered in its consideration by the lack of co-operation from the company.”

The appeal hearing gave greater access to the company’s finances, and concluded that not only should the sanction stand, but the fine should be increased by 50% to £75,000.

Assistant manager of the TPS, Arthur Cummins, was a key witness. “Mr Cummings, Assistant Manager of TPS demonstrated the robustness of the procedures used by the TPS to ensure that only eligible complaints were processed. He confirmed that Reactiv had been in the top 20 most complained list for five months in 2013, most recently in October 2013 but had not figured subsequently. He gave clear and convincing evidence which the tribunal accepted.”

By Ed Hall, DMA PR & Content Manager

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From April, new pensions rules will give hundreds of thousands of those aged 55 and over direct access to their pensions and large sums of cash for the first time.

In the first four months, pensioners will remove an estimated £6 billion of cash from their pensions, which will in turn create many new selling opportunities for brands. However, lessons from PPI and accident claims should serve as a warning.

With this in mind, the DMA has created a toolkit for marketers.

This guide will help ensure your marketing activity meets the expectations of consumers.

We have included helpful at-a-glance information for brands to share with their customers including some to help them understand what to do, should their retirement be disturbed and they receive unwanted one-to-one pensions-related marketing.

Advice for brands to share with customers

Consumers generally object to nuisance calls, which are usually the result of poorly targeted or irrelevant marketing. Such calls are often illegal and in breach of the DMA regulations.

Annoyance is an issue but problems can be worse, particularly for vulnerable consumers. Consumers must be reassured that they can opt-out of future telemarketing calls if they wish.

The DMA runs the Telephone Preference Service (TPS) on behalf of Ofcom. Consumers can register their mobile or home telephone number to the service free of charge and opt-out of future marketing. Consumers can sign up to the service here

If a person continues to receive unwanted nuisance calls in spite of TPS registration then they may complain to the Information Commissioner’s Office (ICO), which is the regulator in charge of enforcement, to report the offending business. The more information a person can provide to the ICO the better, in particular:

• the organisation responsible for the call
• the number the call came from
• the date and time of the call
• the nature of the sales/marketing that occurred during the call

Complaints can be made directly to the ICO by ringing their helpline on 0303 123 1113 or by visiting their website

Financial Scams

Beyond nuisance calls, financial scams are another potential problem. Such calls may start as nuisances, but develop into something else. Such calls are likely to fall outside our remit, and may be more appropriate for the police. However, there are two more sources that can be helpful for consumers:

• The FCA’s Smart Scam Investor for advice on avoiding scams.
• The Pensions Regulator also offers advice on how to avoid pension scams.

Government assistance

The Government will provide free, impartial advice to anyone who wants to know more about the pension changes, to help people make informed choices.

This advice will be available:

• Face to face at the Citizens Advice Bureau
• Online at GOV.UK
• Online at Pension Wise

Lead generation activity and marketing calls

Firms engaged in lead generation work should be up-front about the purpose of calls and be clear about the identities of those parties they intend to share information with. They should not call TPS registered consumers unless they not only have consent to do so, but can also demonstrate they have this consent.

If your firm uses data supplied by third parties (such as lead generation companies) then your marketing activity is not exempt from TPS responsibilities. Your firm could be held responsible for calls made to consumers registered with TPS without named consent. Action could include action by the ICO and dismissal from the DMA if our laws and Codes are wilfully broken.

Responsible marketing

DMA Code – Marketers should use the DMA Code and how-to guides when creating their marketing campaigns, especially when targeting the over-55s. The DMA Code contains five aspirational principles:

1. put the customer first;
2. respect privacy;
3. be honest and fair;
4. protect your customers’ data; and
5. take responsibility for your actions.

Good one-to-one marketing is an exchange between business looking to prosper, and the customer looking to benefit.

Telemarketing guide – The DMA has produced channel-specific guides, and marketers should read these to learn about industry best practice. Telemarketing will come under intense scrutiny once these pension changes come into force. Marketers need to uphold the highest possible standards.

Picking up the phone and having a conversation can be a tremendously powerful way to convert a consumer into a customer. As the experiences around PPI demonstrate, it’s also easy to get it wrong. Getting it right is more important than ever. The Telemarketing Guide will help you get it right.

Vulnerable consumer guidelines – Those aged 55 and over are more likely than the rest of the population to be considered vulnerable, due to age-related illnesses. Marketers should factor this into any campaign aimed at older consumers. This guide is for call centre staff who may come into contact with vulnerable consumers. It includes a step-by-step guide to spot a vulnerable consumer during a telemarketing call, and how to best communicate with that person. The guide includes details for managers on how to ensure their staff behave responsibly in their contact with vulnerable consumers.

Data guide – This guide gives marketers the lowdown on data privacy and the best ways to collect and use customers’ data for one-to-one marketing.

Ad mail guide – Rules and regulations for ad mail and the right ways to target the right letter boxes

Email guide – Email is generally something consumers have opted into, so consumers have already consented to contact, which makes email less of an issue. This guide contains great tips for using this channel effectively.

Mobile guide – Like email, SMS is another opt-in channel, so consumers will expect contact. The mobile guide takes marketers through many of the other communication channels available via mobile and other devices, including proximity marketing, geolocation and more.

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The Direct Marketing Commission is formally investigating two companies following allegations in the Daily Mail that personal data was shared inappropriately and without the consent of users.

The two companies are:

• B2C Data Ltd, based in Milton Keynes
• Data Bubble, based in Bradford

DMC Chief Commissioner George Kidd said:

“The allegations in the Daily Mail are serious.  People must be able to trust those with whom they share their data.  We will look carefully at the roles and conduct of these two companies and advise the DMA on our findings quickly.”

The DMC will determine whether either company has breached the DMA Code. All companies that are members of the DMA are expected to follow both the spirit and the letter of the DMA Code.

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