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Direct Marketing Commission - Enforcing Higher Industry Standards

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SMS Marketing Regulation – UK spammers fined £440k 30th November, 2012

SMS marketing regulations became tougher this week as the UK government’s Information Commissioner shows its teeth, writes Danny Meadows-Klue, Industry Commissioner at the DMC. The ICO unleashed the first of the heavy fines for spammers using text messaging, and across Europe eyes are on the UK as the focus of digital marketing regulation broadens to include texts. Here’s why industry and consumers should all be welcoming the move…

Spam is the scourge of digital channels. It emails, floods social networks and has started to extend into text messaging across Europe. It’s not just consumers who should be smiling after the industry watchdog the Information Commissioner’s Office (ICO) used its powers to levy fines for the first time – industry too should celebrate.

The ICO says it is determined to end the growing trend of unsolicited text messages and these record fines will send a clear signal that the business model of rogue traders who’ve switched from email spams to mobile is not one that will be tolerated.

The action now being taken is welcome, but overdue. Over the last 18 months there has been growing criticism that SMS marketing regulations have not been matched by court action, letting those who sell information without permission prosper, and regulators appearing out of touch with consumer needs.

This week, two men who allegedly sent millions of spam texts have been fined £440k, in a clear warning shot to any opportunist planning to join the current feeding frenzy of PPI claims. Christopher Niebel and Gary McNeish have been cited by the regulator as typical of the types of businesses that send SMS to solicit sales leads. Today it’s compensation claims for personal injury and mis-selling of payment protection, but the approach is one that simply migrates to the topic of current consumer interest.

Information Commissioner Christopher Graham has made a decisive judgement call, saying: “The public have told us that they are distressed and annoyed by the constant bombardment of illegal texts and calls, and we are currently cracking down on the companies responsible, using the full force of the law.”

The fines were made through failures to adhere to the UK’s Privacy and Electronic Communications Regulations (2003), for which similar regulations exist in many markets.

Graham added that: “the two individuals we have served penalties on today made a substantial profit from the sale of personal information. They knew they were breaking the law and the trail of evidence uncovered by my office highlights the scale of their operations.”

This particular case is about a Manchester based firm called Tetrus Telecoms, which sent SMS messages on behalf of clients – close to one million texts a day. Their clients were claims management companies looking for compensation cases that would typically be passed to ‘no-win-no-fee’ legal firms.

If you’re in the UK and look through your SMS history, the chances are you’ll recognise the type of content as millions of consumers across the UK seem to have received these: “You may be entitled to…” “To claim reply CLAIM to this message.”

It’s a good example of how a small group can use technology in ways that can have a huge impact on both consumers and the reputation of an industry as a whole. Reportedly the ICO found handwritten notes in their offices suggesting Tetrus had churned through more than 60 sim cards a day to fuel their machines – each card is used until its text message capacity is reached before moving on to the next; a sort of scorched earth approach to mobile channels.

In a statement, one defendant said he intended to challenge the fines and had not been provided with evidence from the ICO to support the allegations, so no doubt this case will deepen as the challenge continues. Similarly the ICO has stated that it is investigating several similar cases, suggesting that this is far from a one-off warning shot. That promise matters. The vast majority of those working in direct marketing respect the law and the DMA Code of Practice. They and the public at large are entitled to expect that action is taken against those that do not.

Whatever the result, the focus of attention on the trade in mobile phone numbers and the ICO’s decision to act decisively should be warmly welcomed. In a digital society, the rights to and control of personal data are among the most precious of all.

Danny Meadows-Klue is President of the Digital Training Academy www.DigitalTrainingAcademy.com, and a Commissioner for the Direct Marketing Commission. As a policy advisor he worked on the Regulation of  Investigatory Powers legislation (RIPA), and he has helped create and run digital marketing trade associations including the IAB for ten years.

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Annual Report 2011-2012: Good Data is the Key 5th November, 2012

Last month, a UK consumer registered on the Telephone Preference Service invoiced a company for nuisance cold calls. While most people won’t go to those lengths, this case underlines the importance of good data.

The Direct Marketing Commission (DMC) Annual Report 2011/12, which has just been published, highlights the public’s frustration if their wishes are not respected and stresses the need for good data.

As Chief Commissioner, George Kidd, says: “Good data is key to effective direct marketing. Those who sell, buy, and use data need to be sure that it’s up to date, accurate and protects people’s privacy.

“The growth of digital marketing, where consumers are less aware of how data can be collected, makes this more important than ever.”

“The DMC is an effective self-regulator, says Mr Kidd and could do more to help the industry and the Information Commissioner’s Office stem the tide of complaints over breaches of telemarketing privacy.”

The DMA and the DMC will be working together over the coming year to ensure they help industry members better understand the benefits of complying with the DM Code of Practice and ensure it is applied in a fair and reasonable manner.

2012 DMC ANNUAL REPORT

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