DMC Quarterly Newsletter
10th November, 2009 at 17:03pm
Foreword from the Chairman Matti Alderson:
Welcome to the Direct Marketing Commission’s third email newsletter. Having now completed our latest quarterly complaints index, we can see that there continues to be a high level of compliance in the industry. Through our strict enforcement of the Code, we have found that there are few occasions where we are required to apply serious sanctions because most companies are willing to take expedient remedial action when we contact them and are prepared to work with us to keep improving professional standards of direct marketing.
Throughout the rest of 2009 and into the new year the DMC will be working to increase its profile further by encouraging consumers to contact us for help and advice, investigating complaints and examining and investigating new issues that face the direct marketing business. Watch our website: it tackles key questions every month to reflect debate within the direct marketing industry and to report what we hear from consumers about their prime concerns, aided by the wealth of expertise that we have in our Board of Commissioners and the willingness of the industry’s support through the Direct Marketing Association.
Industry News
Phone Scams
BT has warned customers that they should be on their guard against phone scams involving people claiming to be calling from the company.
The scammers warn customers that they are in arrears and then ask for card or bank details to settle the account. If the customer refuses or asks for proof, the scammers offer to establish their credentials by disconnecting the phone line, which they are able to do by suspending the call.
Once the customer puts the phone down, the scammer stays connected to their line, which gives the impression that it no longer works. Evidence has shown this type of scam has been happening all over the country.
At the DMC, we would advise consumers to never give out any banking details over the phone unless you know exactly who you are dealing with, and customers who have suffered a scam like this should contact OFCOM or Consumer Direct.
Debt management firms could face regulation
The Government has launched a consultation to determine whether to regulate the UK’s 150 debt management companies who charge a fee to negotiate with lenders on behalf of borrowers. The companies in question set up debt management plans designed to reduce monthly repayments for borrowers, but these can prove expensive in the long-term when fees are added to the repayments. A recent review of the sector by debt charity Money Advice Trust concluded that the advice given by these companies was mixed and that the Office of Fair Trading should require them to be clear in their promotions about the cost of their services they offer.
Complaints trends
Of the complaints received by the DMC between April and June 2009, 66 per cent of these were against DMA members and the remaining 34 per cent against non-members of the DMA.
The company sector that received most complaints was Home Shopping with 47 per cent of the total.
The industry practice most frequently subject to complaint was ‘unwanted mail’ (18%).
The second most common area of complaint (9%) fell under the heading of ‘unwanted emails’.
Interview: Michelle Peters, Commissioner
Your career is quite interesting in that you began working as a solicitor in marketing law and intellectual property litigation and became a member of the Direct Marketing Authority seven years later. What was your motivation to go from working with litigation, to then work on self-regulation?
Marketing is such a fast moving and constantly developing area that I firmly believe a self-regulatory system is the best way to protect both the public and the industry. Crucially, we have a system run by those who have a real interest in protecting both of those (often conflicting) interests and who are “in the thick of it” and therefore able to see the issues, and react to them, long before the legislators ever could. My personal motivation to join the DM Authority (now the DMC) was to take on the challenge of having to decide the outcome of complaints, rather than just arguing my client’s case – which has been a challenge indeed with some of the cases we have seen!
What do you think is the biggest issue facing direct marketing today compared to the issues facing the industry seven years ago?
The massive growth in online marketing and new digital channels is undoubtedly the biggest issue facing direct marketing today. With new marketing channels like Facebook and Twitter, and new ways of monitoring consumers’ activities online, like Phorm, the direct marketing landscape is constantly evolving. This is a challenge for everyone who comes into contact with direct marketing, whether as a business which uses direct marketing, a consumer, or a regulator. For businesses, it can be difficult to know which rules apply to these new channels or how they should be interpreted. For consumers, the challenge is being able to make informed decisions about what kind of businesses they are prepared to do business with online. For the regulators, including the DMC, there is a constant need to assess whether, as these new channels develop, the existing rules will sufficiently protect both the public and the industry, and to anticipate where consumer harm might arise and therefore take steps to prevent it before that happens.
The media landscape has changed phenomenally in the past couple of years. Do you think this has worked for or against the consumer and how should organisations adapt?
The changing media landscape has brought many new opportunities for consumers, from new ways of buying and selling goods (e.g. via Ebay), to new ways of communicating with friends and family or being part of an online community. But there are potential disadvantages too, particularly for those consumers who are unaware of the risks of sharing too much information when they go online. Making sure consumers can give informed consent about what happens to their personal information is vital if the public is to retain trust in the direct marketing industry. Businesses in the direct marketing industry have a key role here: they must be transparent about their activities and act quickly to resolve any complaints which may arise. Organisations like the DMC also have a role to play in educating consumers about new threats and, where appropriate, investigating and resolving complaints.
Complaints case study:
Online Shopping
The Commission received a complaint from a consumer who had placed an order for a carpet cleaner and bonus wash. She received the carpet cleaner but not the bonus wash that was included in the item code. She had phoned customer services on several occasions but each time was told a note would be left on their system and she was asked to call again in a few days. When she rang she spoke to a different person who said nothing had been done to resolve her query and for her to call again in another few days. She called at least 7-8 times, and when she was promised a call back this did not happen. She had a print out of the item which clearly stated the product code and what was included in the order.
The company admitted there was fault on behalf of their customer service team. Also, their website incorrectly advised that a bonus pack was with the item ordered. They spoke to their buyer and web-team to ensure this was removed. The notes logged by the agents did not list the bottles as being included with the product, hence the confusion. They apologised and confirmed any re-training would be conducted accordingly.
They provided a refund to cover phone calls and also sent the bonus pack as agreed. The DMC reminded the company of their obligations under the Direct Marketing Code of Practice to provide a prompt, efficient and courteous customer service, and have in place, adequate administrative procedures to achieve this. They were also reminded that online commercial communications must be clear and truthful and that companies must make every effort to provide the goods or services as ordered by the customer.
