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Direct Marketing Commission - Enforcing Higher Industry Standards

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News

Minutes – 24th November 2015 7th January, 2016

MINUTES

of the

DIRECT MARKETING COMMISSION

on

Tuesday 24th November 2015
at
DMA, 70 Margaret Street, London W1W 8SS

Present:

George Kidd, Chief Commissioner (GK)
David Coupe, Industry Commissioner (DC)
Danny Meadows-Klue, Industry Commissioner (DM-K)
Dr Simon Davey, Independent Commissioner (SD)
Rosaleen Hubbard, Independent Commissioner (RH)

In Attendance:

Suzi Higman, Secretary, DMC (SH)
John Mitchison, Head of DMA Legal & Compliance (JM)

Mike Lordan (part)

 

1.  WELCOME AND APOLOGIES

There were no apologies for absence.

2.  APPROVAL OF MINUTES OF 15th September 2015

The Commissioners had confirmed that the Minutes were an accurate account of their last meeting.  These had now been published on-line (October 2nd 2015).

3.  MATTERS ARISING

At the last meeting it had been agreed that DMA members should be made aware of the DMA/DMC message that they are responsible for the data they trade.  The principle is supported by the Code rule which asks that members take responsibility for the conduct of their suppliers and sub-contractors. GK reported that the Commission’s stance on this rule had been fed back to the DMA and JM said this would be included in the DMA’s taskforce plans for strengthening the DMA compliance process.

RH had produced a short guidance note covering the agreed criteria for deciding whether or not a member was in breach of the disrepute clause in the DMA Code.  The note had been circulated to Commissioners for comment.  It was agreed that this rule should only be applied in exceptional circumstances where it was clear that there was ‘intent’ and where the behavior was abnormal to the industry. At the last meeting it was agreed that this decision on how to apply the rule was incorporated in our formal process.  This had now been actioned and was published online.

4.  GOVERNANCE COMMITTEE – update

SD reported on the latest DMA Governance Committee meeting which he had attended in place of GK.

5.      COMMISSION APPOINTMENTS – update

At the last meeting GK and SH reported that two Industry Commissioners, DC and DM-K’s tenure was coming to an end on 30th June this year.  Two new replacements had now been identified and interviewed and would be commencing on 1st January 2016 subject to no objections from the DMA Board.  DM-K offered his ongoing support in an advisory capacity as and when it was required.

6.      FORMAL ADJUDICATION

A formal adjudication took place during this meeting.  The case related to the role of a member’s affiliates and sub-affiliates in its email marketing campaigns and was brought to our attention by a consumer who had received unwanted emails and traced these back to the member.  The unwanted emails had not clearly identified the sender, and had utilized sender email addresses which implied legitimate companies though unrelated to the email content. Representatives from the company attended the meeting to explain their business model and answer any questions from Commissioners.

The Commissioners concluded that the member did not have sufficient transparency and visibility over its affiliates and sub-affiliates, and this had led to a lack of control over those affiliates in terms of their direct marketing activity. The complaint was upheld under rule 4.3 which asks that members must accept that in the context of the Code they are normally responsible for any action taken on their behalf by their suppliers and others.  It was agreed that a letter would be sent to the member outlining the Commissioners’ concerns together with a request that the member offers assurances that remedial action would be undertaken to ensure it does not continue to breach rule 4.3.

7. DMA COMPLIANCE TASK FORCE – update

JM updated Commissioners on the DMA’s Compliance Taskforce meetings which were looking at ways in which the membership compliance process could be strengthened.

8. COMPLAINTS UNDER THE DMA CODE

a. Summary of complaints – October
SH reported on the latest complaints in October.  A summary of the complaints had been distributed to the Commissioners.  One complaint had focused on a charity which had placed a consent mechanism for marketing purposes within a collection docket.  The charity had informed the Secretariat that they were currently reviewing their statements in terms of how and where they collect data in anticipation of future changes in the charity marketing sector including a move towards opt-in as opposed to opt-out mechanisms.  SH reported that the charity were to let us know when the Commission can expect to see changes and details of what actions had been taken.

b. Recent investigations
SH reported on recent investigations against a member which had been the subject of an adjudication in the Autumn. The investigations had highlighted specific issues around consent and timescales for consent in particular.  These had been fed back to both the member and the DMA given the member was currently undertaking an audit process of its direct marketing activity which was to be examined by the DMA early in the new year.

SH also reported on a recent adjudication on a member in the timeshare resale business.  The matter had been subject to appeal.  Whilst the member had not appealed within the timescales required, a decision had been taken to extend the appeal “window”.  The Commissioners sought assurance that the DMA provided adequate insurance cover were this or other cases to be pursued in the courts. Mike Lordan joined the meeting to discuss this further.

c. Responses from charities following newspaper article
The DMA and Direct Marketing Commission had written a joint letter to all those members highlighted in a recent national newspaper article which had provided details of an investigation into charities and others who allegedly passed on the personal details of a consumer.  The consumer had subsequently been contacted by many charitable and commercial businesses, and the article highlighted the issue of trading data in ways that expose vulnerable consumers.  In the letter the Commission made it clear that it had investigated other claims made by the same national newspaper in relation to the consents given for the use of personal data by third parties.  It had informed the DMA of its findings and presented these at an industry seminar.  Statutory regulators and other organisations were already undertaking investigations so the DMA and Commission had told the charities that it had decided not to proceed with investigations at this time but reserved the right to do so if it seemed appropriate.  The DMA and Commission had, however, asked for sight of any information submitted to the newspaper in response to the article.  This had now been provided and the Secretariat had copied these responses to Commissioners for their information.  GK did not think the responses required further investigation at this stage.

d. Update on recent adjudications
SH updated Commissioners on developments following recent adjudications.  One adjudication had involved a member which had not undertaken sufficient due diligence on its off-shore suppliers.  Similar issues around consent, sourcing and cleansing of data had been raised and the Commission had written to the DMA seeking their agreement to the principle that members should take responsibility for the data they trade.  The DMA had agreed with this view and were going to undertake an audit on the member early in the new year.

9. GENERAL MATTERS

a. DMA activities
JM reported on recent DMA activities and updated the Commissioners on latest ICO action concerning data brokers and lead generators.

b. Governance, Preference Services & Compliance Report
SH had circulated a copy of this report to Commissioners.

c. Annual Report 2014-15
SH reported that the DMA communications department were to start work on the design of this year’s Annual Report in December.  A draft would be circulated to Commissioners for approval. DM-K suggested a visual addition to the report in the form of a selection of ‘headlines’ from media reportage this year.

Action Point – SH to circulate draft of Annual Report.

d. Sanction, test and policy
SH circulated a draft paper which tested what guidance the Commission might give to its adjudication panel in terms of the scale of sanction and when a particular conduct merits a particular response.  SH said that nothing has yet been written or published on how we reach decisions.  It was agreed that Commissioners would revert with their comments on the draft within one week.

Action Point – Commissioners to comment on draft sanctions policy.

10. ANY OTHER BUSINESS

GK recorded thanks to DM-K and DC for their support to the Commission over the last few years.

11. FUTURE MEETINGS 2015

Tuesday 9th February, 2.30pm (please note the later time)
Tuesday 17th May, 10.30am
Wednesday 14th September, 10.30am
Wednesday 23rd November, 10.30am

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Minutes – 15th September 2015 2nd October, 2015

MINUTES

of the

DIRECT MARKETING COMMISSION

on

Tuesday 15th September 2015
at
DMA, 70 Margaret Street, London W1W 8SS

Present:

George Kidd, Chief Commissioner
Danny Meadows-Klue, Industry Commissioner
Dr Simon Davey, Independent Commissioner
Rosaleen Hubbard, Independent Commissioner

In Attendance:

Suzi Higman, Secretary, DMC
John Mitchison, Head of DMA Legal & Compliance

1.  WELCOME AND APOLOGIES

David Coupe had given apologies for absence.

2.  APPROVAL OF MINUTES OF 21st MAY 2015

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

At the last meeting GK reported that he and Mike Lordan had met with the Better Regulation Executive (BIS – Business Innovation Skills) and CMA (Competition and Markets Authority) to discuss the DMA Code and other alternatives to regulation. GK had produced a pyramid style chart which identified the nature of problems and behaviours (harm, risk, intent, purpose) as a hierarchy in terms of solutions.  GK agreed to re-examine the chart to see if it could be helpful to our process at the current time.

4.  GOVERNANCE COMMITTEE – update

GK updated Commissioners on issues discussed at a recent DMA Governance Committee meeting.

5.      COMMISSION APPOINTMENTS – update

DC and DM-K had now completed their tenures on the Commission.  They had both agreed to remain on the Commission Board until the New Year at which point two new Commissioners would be appointed. Two potential candidates had been identified and one had already ‘observed’ at a recent adjudication.  It was hoped that both candidates would be available from 1st January.  DM-K expressed his interest in supporting the Board in some capacity – it was agreed that this could be very helpful and that Danny might be called upon from time to time informally as a consultant or advisor to the Commission.

6.  FOLLOW UP TO CASES AND COMPLIANCE

• Letter to DMA – 22nd June
• Letter/report to DMA following data event – 16th July
• Compliance Task Force presentation
• GK correspondence with DMA

GK updated the Commissioners on recent correspondence with the DMA.  This followed two investigations in the Summer which had been referred to the DMC as the businesses concerned were the subject of a national newspaper article about the buying and selling of ‘sensitive’ financial data. The adjudications had raised a number of concerns relating to the value chain in terms of due diligence, consents and sourcing.  GK had fully reported the DMC’s concerns to the DMA and was looking for assurance that having identified the areas of concern, the DMA would take action to apply any necessary changes. JM updated Commissioners on the DMA’s Compliance Taskforce meetings which were looking at ways in which the compliance process could be strengthened and Commissioners discussed different ways in which this new process could progress.  GK was keen that the message that the DMC had raised, that members should take responsibility for the data they trade, was applied within the vetting process for new members.  GK asked if DMA membership terms could commit members to agreeing that the data gathered by the DMA compliance team during the vetting process could be shared with the DMC in the event of an investigation.

Discussions led to a more recent adjudication into a member which had not undertaken sufficient due diligence on its off-shore suppliers.  Similar issues around consent, sourcing and cleansing of data had been raised and the DMC had written to the DMA seeking their agreement to the principle that members should take responsibility for the data they trade. Recent adjudications suggested matters were out of control. The Commission sympathised with some industry comment over the need for different and robust rules regarding third party consent and when and how data can be shared. It was agreed that there was a need for a joint set of DMA and DMC messages regarding data providers  and their clear and direct responsibility for the conduct of their suppliers and that these messages should be actively promoted across DMA membership, on DMC and DMA websites and via a PR message with an accompanying interview/profile piece in a national newspaper.

ACTION GK to reach agreement with DMA on next steps based on the principle that members have responsibility for the conduct of their suppliers and sub-contractors.

7. CHARITIES – direct marketing

The Commissioners discussed a recent national newspaper article which identified a number of charities in DMA membership and issues around how they trade data in ways that might expose vulnerable consumers to numerous requests for charitable donations. It had been decided that a joint DMA and DMC letter should be sent to the charities in question seeking their assurance that they apply the DMA Code rules to their marketing and asking for a copy of a response that they submitted to the newspaper.  Commissioners were told that other investigations were underway by statutory regulators and other compliance organisations. On this basis it was not thought necessary or appropriate to proceed with a parallel DMC investigation at this time. All Commissioners agreed that the DMC should reserve the right to investigate at some later stage if this seemed appropriate.  It was agreed that this should be made clear in the letter to the charities.

8. COMPLAINTS UNDER THE DMA CODE

• Summary of complaints – July/August/Ongoing investigations
• Formal Investigations
• Adjudication

SH had circulated summaries of complaints for July and August, as well as a report on the status of open cases.  DM-K raised the issue of unaddressed mailings because complaints had been received against a member which was sending out mailings addressed to The Householder, thereby by-passing MPS which only registers personal data and also by-passing opt-out services which are for unaddressed mail only.  SH said the member should have suppression procedures in place to ensure that those who do not wish to receive these types of mailings, can opt-out.  DM-K believed that the DMC should take a collective view on this type of issue.

A formal investigation had been undertaken into a member which re-sold timeshares.  SH reported that this was a complex case and with a large amount of paperwork.  SH agreed to distribute papers in good time prior to the adjudication meeting set for early October.

SH also reported on a formal investigation into a member whose publisher/affiliate had sent out a number of unwanted emails to the complainant.  The emails were not clear as to the sender as they used domain names of other well-known companies, such as Ebay and Debenhams, provided a registered office address in the States but appeared to link to a DMA member.  The member runs an affiliate network and had not supplied adequate assurances or sufficient information as to the consents, process of data collection and responsibility or otherwise for their affiliates.  The adjudication would likely take place at the next DMC Board meeting.

9. CODE RULE OF DISREPUTE

RH had produced a short guidance note covering the agreed criteria for deciding whether or not a member was in breach of the disrepute clause in the DMA Code.  The note had been circulated to Commissioners for comment.  It was agreed that this rule should only be applied in exceptional circumstances where it was clear that there was ‘intent’ and where the behavior was abnormal to the industry.  SD asked that this decision on how to apply the rule was incorporated in our formal process.

ACTION SH to draft simplified note confirming the key tests the Secretariat should apply.

10. GENERAL MATTERS

JM updated Commissioners on the latest Governance, Preference Services & Compliance Report which had been circulated.

11. ANY OTHER BUSINESS

Annual Report:
The Annual Report was now due for the year of 1 July 2014 – 30 June 2015.   It was suggested that we publish a ‘risk register’ in the form of a table which identifies the recent issues/risks that have been established in recent months.  DM-K suggested we publish examples of ‘Data Journeys’ in the report, as well as a ‘referral’ chart which identifies which organisations are receiving non-member complaints.

SH circulated the Commissioners’ biographies and asked them to update and return for use in the Report.

ACTION SH AND GK to prepare draft Annual Report and seek Commissioners’ input and comment. The draft should be informed by and circulated with a basic list of risks and live issues.

12. FUTURE MEETINGS 2015

Tuesday 6th October, 9.30am – Adjudication
Tuesday 24th November, 10.30am DMC Board meeting

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Minutes 29th May 2014 13th June, 2014

MINUTES

of the

DIRECT MARKETING COMMISSION

on

Thursday 29th May
at
DMA, 70 Margaret Street, London W1W 8SS

Present:

George Kidd, Chief Commissioner
David Coupe, Industry Commissioner
Rosaleen Hubbard, Independent Commissioner
Danny Meadows-Klue, Industry Commissioner
Martyn Percy, Independent Commissioner

In Attendance:

Suzi Higman, Secretary, DMC
John Mitchison, Head of Preference Services & Legal and Compliance, DMA
James Milligan, DMA Solicitor (in part)

1. WELCOME AND APOLOGIES

There were no apologies for absence.

2. APPROVAL OF MINUTES OF 10th February 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

At the last meeting, the case for ‘mediation’ or “adjudications by consent” was discussed and how this type of intervention could be usefully applied to the Commission’s investigative work. The Secretariat had agreed to look at alternative terms to describe the type of support we were offering and how this could be fitted into our complaints process. SH had produced a new DMC flow chart of our processes together with amended wording and would circulate this to Commissioners for approval. DM-K had also suggested that the Secretariat could add to the flow-chart the average percentage of complaints that apply to each of the stages of the complaints process.

Action Point – Secretariat to circulate flow chart and wording to Commissioners.

The Commissioners discussed the issues of companies which had been expelled from DMA membership but that did not subsequently remove the DMA logo from their website. This was the case following a recent expulsion. JM said he was chasing the company concerned. DM-K suggested that a page on the DMA website of those improperly using the DMA logo would be helpful. JM said he would raise the matter with Chris Combemale.

GK raised the issue of continuing complaints post adjudications, querying whether more could be done about companies who, post expulsion, continue to produce complaints to the Secretariat.

It was agreed that a link would be placed on our website as a Consumer Alert – this would list companies who had been expelled from membership or who have left the DMA following an adjudication and were continuing to receive complaints. It would also give consumers information on where to refer their complaints against companies who were no longer in DMA membership.

Action Point – SH to set up new Consumer Alerts page on the DMC website and to ensure arrangements are in place to inform the relevant external regulators of such cases and of our referral plans.

GK raised the issue of sharing case information with the ICO and vice versa. We talked about how and when we could share details of our investigations. It was agreed that we would write to the ICO, giving them information about our recent adjudications and proposing a discussion on how and when we can share data on the status of cases.

Action Point – SH to draft letter to ICO in relation to sharing information about cases.

Commissioners discussed the need for care when dealing with complaints relating to a member where there had been a recent adjudication and where the member had been reminded of their obligations and had given undertakings to comply, perhaps through process changes. It was not thought appropriate always to open new investigations over complaints related to the specific issue adjudicated upon. There were double jeopardy and natural justice considerations. The Commission had, however, to be alert to new issues surfacing or to evidence that the reforms promised had not been seen through.

4. CHIEF COMMISSIONER’S REPORT

GK reported on a recent Governance Committee meeting and circulated minutes from that meeting to the Commissioners for their information.

GK circulated recent amendments to the revised Code of Practice.

GK discussed the ongoing issue of lead generation companies and the data supply chain, and how this impacts the consumer. It was important that consumers were given clear information about where their data was going to be used and how. JM stressed that it was best practice for a telemarketing company to tell consumers up front where they had gathered their information. GK said the new Code guidance would be likely to reflect these issues of transparency and clarity.

5. COMPLAINTS UNDER THE DMA CODE OF PRACTICE

a. Breakdown of complaints – February to April 2014
SH presented Commissioners with a breakdown of complaints between February and April 2014.

SH reported on continuing complaints against one DMA member which had been the subject of an adjudication a few months previously. No breaches had been found for two complaints, one complaint had not been pursued further but the member had admitted fault for one of the cases. SH said that any ongoing complaints would be carefully monitored.

b. Cases for discussion
(i) SH informed Commissioners about a recent case where three consumers who were survey panelists had complained that on nearly reaching the minimum payment threshold for completing surveys, they ceased to receive further surveys. The case had been informally resolved but the Commissioners agreed that a letter should be sent to the company stating that there was clearly an issue in that more than one complainant had the same concern and seeking further clarity in terms of the statistics they had provided to the Secretariat. We would also explain that the matter may be of interest to Trading Standards and that we would take relevant advice in that regard.

Action Point – SH to draft a letter to the member seeking further clarification.

(ii) SH informed Commissioners about a second case which related to a time-share company and allegations made by a TPS registered complainant who said he had been cold-called and that he had not given his consent. The member maintained that they called the complainant as a result of a web enquiry. The complainant disputed this and other aspects of the member’s response in relation to TPS screening and customer service. A clear breakdown in communications was apparent from the material shared and the comments made. There were uncertainties over the cleansing of data against TPS but no evidence of regular or widespread problems in terms of complaints.

It was agreed that a letter should be issued to the member clearly outlining the range of issues raised by the complainant and make clear the member company’s obligations under the DMA Code of Practice. The complainant would be informed of this action and the case closed.

Action Point – SH to draft letters to both parties.

(iii) SH informed Commissioners about a third case where a complainant had been rung by a financial services company where they stated he had had a loan declined and was therefore suitable for a trust deed. The company informed the complainant that they had sourced his details from a member company. The complainant had, however, given permission to be contacted by third parties. However, two datasets had been provided to the financial services company, and there had been a subsequent crossover in the use of the scripts so that the complainant was given incorrect information when they called him. It was agreed that the Secretariat would contact the financial services company and inform them that the matter had been brought to the Commission’s attention,that this error may have affected a number of consumers and asking that the situation does not recur.

Action Point – SH to contact the financial company.

c. Update on previous adjudication 1
SH had circulated papers to the Commissioners which referred to a previous adjudication which had culminated in termination of membership. The company had sent copies of letter which they claimed to have sent to the DMC post adjudication but these letters had not been received. The DMA wrote to the company to inform them that these letters had not been received and that the decision to terminate membership still stands. The company had not yet removed the DMA logo from their website and JM had contacted them again to request removal.

d. Update on previous adjudication 2
SH had circulated papers on a previous adjudication where the member had asked to see the DMC’s website adjudication piece in advance of online publication. The Secretariat agreed to this, and the member had asked for a slight amendment to the copy. The Commissioners had agreed that the copy did not need amending. The adjudication was now live on the DMC website.

6. UPDATE ON DMA CODE

a. Key messages on nuisance calls:
It was agreed that the DMC would produce five key messages on nuisance calls which could be promoted to the public, data buyers and users and sit alongside the DMA best practice guidance with the revised Code of Practice.

Action Point – SH to circulate GK’s draft key message to Commissioners for amendment and comment.

b. ICO DMA guidance on consent/optin:
James Milligan attended the meeting at this point to update Commissioners on the new ICO guidance on consent, third party opt-in and timescales for consent. He agreed to send a link to Commissioners to the new ICO guidance section on selling and buying lists.

Action Point – James Milligan to send link to new ICO guidance

7. THE INTERNET OF THINGS

DM-K gave a presentation on the Internet of Things – “uniquely, identifiable objects and their visual representation in an internet like structure” and how they can impact winning, losing and decision making. The presentation looked at the consequence and complexities of data sharing in this new digital structure.

8. GENERAL MATTERS

Governance: Compliance, Preference Services & Accreditation Report
A report had been circulated to the Commissioners.

9. ANY OTHER BUSINESS

There was no other business.

10. FUTURE MEETING DATES 2014

Tuesday 30th September, 10.30am
Thursday 27th November, 10.30am

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