Written evidence submitted by the Direct Marketing Association (FCS 017)
Information about The DMA (UK) Ltd
The Direct Marketing Association (UK) Limited (DMA) is Europe's largest trade association in the marketing and communications sector, with approximately 1,050 corporate members and positioned in the top 5% of UK trade associations by income.
The DMA represents both advertisers, who market their products using 1 to 1 marketing channels, including email, mobile, social media, advertising mail and inserts, and specialist suppliers of 1 to 1 marketing services to those advertisers - for example, advertising agencies, outsourced contact centres etc.
The DMA also administers the Mailing Preference Service, the Telephone Preference Service and the Fax Preference Service. On behalf of its membership, the DMA promotes best practice through its DMA Code, in order to maintain and enhance consumers' trust and confidence in the direct marketing industry.
The Direct Marketing Commission is an independent body that monitors industry compliance.
Please visit our website www.dma.org.uk for further information about us.
Introduction
The DMA welcomes the opportunity to respond to this consultation issued by the Public Administration and Constitutional Affairs Select Committee.
Questions
Extent of poor fundraising practices and impact on members of the public
The majority of charities operate to high standard and are compliant with the relevant legislation for direct marketing. It is important to note that the Information Commissioner’s Office (ICO) classify fundraising messages as direct marketing.
Some of the problems are not a result of non-compliance for example generous donors may be contacted more frequently. If they give generously to many charities then effect can be that they receive far too many marketing materials from various charities. This cumulative effect was an issue in the Olive Cooke tragedy.
Charities will often exchange their donor data with other charities a practice known as list swapping. Donors may not be aware that list swapping is taking place but their consent is needed if charity wishes to share a donor’s personal data. For some people just because you’ve donated to charity ‘x’ does not mean you would like to be contacted by charity ‘y’.
Another problem is historical data that is donors who have been donating for a number of years but have not contacted to see whether they consent to receiving direct marketing nor whether they mind having their data shared. Some charities continue to use historical data where they do not have right to do so under the Data Protection Act 1998 and the Privacy and Electronic Communications (EC Directive) Regulations 2003. A solution to this suggested by the ICO was to send donors a letter asking whether they want to opt-in and are happy with their personal data being shared with other charities. Under the current legislation a person does not need to opt-in to receive direct mail in the post.
Another prominent issue is how to deal with vulnerable consumers. Many donors may be vulnerable owing to illness or mental problems, elderly people are more likely to suffer from dementia or Alzheimer’s disease for example. The DMA has published guidelines for call centres on how to communicate with vulnerable consumers, which all call centres should use or create their own robust vulnerable consumer’s guide.
The UK is a generous country where most adults give money to charity and so most people have had an interaction with fundraisers. Most of those interactions are positive and result in money be given to charity or a donor being updated on how their cause is progressing. When charities break the rules and call someone registered to the Telephone Preference Service (TPS) it is nothing more than a minor nuisance for most people. Even so it is still against the Privacy and Electronic Communications (EC Directive) Regulations 2003 to do so and charities must be treated the same as businesses that break the rules.
Some groups in society are affected more than others in particular vulnerable consumers as the damage done can be far worse. A person with dementia may end up signing up to the same charity numerous times and not realise they have done so. This has a greater effect than the annoyance experienced by most people when they receive a fundraising message they didn’t want.
This information is not known as this data is not widely collected and shared. Furthermore, data relating to contracts between charities and private companies is commercially sensitive and therefore less likely to be shared.
Government’s proposed legislative changes
Most current bad practice and non-compliance can be dealt with by the ICO as they are the regulator with the appropriate enforcement tools to take action. The ICO also have the expertise to help charities improve their behaviour and become compliant with direct marketing regulation. The Charities (Protection and Social Investment) Bill brings in a number of much needed changes with increased powers for the Charity Commission. In particular bringing greater accountability for fundraising practices at a trustee/director level.
Charities rarely deliberately break the regulations, which is the type of wrong-doing the Charity Commission can deal with but more often charities have not properly understood their obligations. This is the job of the ICO but also the Institute of Fundraising (IoF), the organisation responsible for the self-regulation of the sector. The ICO has been working extensively with the IoF to help them improve the situation, this includes helping the IoF when reviewing their code of practice and speaking at a fundraising summit.
The main problem is that some charities do not properly understand their obligations under current direct marketing regulation. This confusion needs to be addressed by the organisations involved in the self-regulation of the industry working with the regulators. The IoF should release its own guidance for charities to follow and to this end the IoF has already made changes to its code of conduct, which aims to bring it into line with the ICO’s direct marketing guidance. Furthermore, parts of the sector need to move beyond seeing compliance with direct marketing rules as a burden but as a vital step to ensuring the success of their charity and loyalty of donors.
The IoF, Fundraising Standards Board (FRSB) and Charity Commission are already working with each other but all are agreed that they need to work more closely together and with a proper strategy.
Charities should review their own practices and make sure that their direct marketing operations are in line with the ICO’s direct marketing guidance. This means checking that the correct marketing permissions have been obtained doing due diligence on whether private contractors hired to carry out fundraising activity abide by the same rules. Charities must not be tempted to short circuit their due diligence on private firms that offer the spectre of fantastic short-term results for a low cost.
Charities should operate on the principle of ‘just because you can does not mean you should’ and like the DMA Code the customer or donor should be at heart of everything a charity does. In this way charities are not only seeking to be compliant but to exceed the expectations of their donors which is a win-win situation.
Charities’ values and interaction with the public
There should be accountability at the director/trustee level for direct marketing, data collection and data protection practices. A director/trustee should be ultimately responsible for ensuring compliance with legislation. This measure would help make direct marketing best practice a part of the charities culture and not seen as a compliance burden. The amendments in the Charities (Protection and Social Investment) Bill will encourage this.
Donors are at the heart of what charities do, charities have vested interest in maintaining high levels of trust and confidence with their donors. However, charities should know that if they contact donors in ways that do not expect then donations may begin to wane. Increasingly, how brands treat data protection is a brand differentiator as revealed in DMA research ‘What the consumer really thinks’ Those the charities that have explicit consents and contact their donors in a fair and transparent way will thrive.
The best way to do this is as mentioned earlier in this response is to instil a culture of good data protection practice and due diligence in the charity. It should not be only the legal department that consider compliance issues but direct marketers and commercial teams as well. All have a duty within a charity to make sure that the donor is put first. A culture where the donor is put first means that employees see treating them fairly as innate part of good fundraising. Clearly, this has not always happened as we have seen call centres ringing vulnerable people, knowingly, and using questionable methods.
Education and training would be necessary to ensure employees properly understood the culture of the business. This does not necessarily have to be formal training but could just a matter of line managers meeting with their team.
There is a role to play in achieving in this goal at all levels throughout a charity but ultimately responsibility is with trustees/directors to drive change across the charity. Changing a workplace culture is a top-down process as without the proper support from management employees will not know what the values of the charity are. Ideally, there should be a designated trustee/director with a specific responsibility for direct marketing, ensuring there is accountability at a senior level.