DMA Politically Direct (Spring 2008): State Legislative Report

May 16, 2008 — The Direct Marketing Association (DMA) continues to monitor and be active in state legislatures. Here is a sample of the key state issues.

Do Not Mail

Nine Do Not Mail (DNM) bills in seven states carried over from the 2007 state legislative sessions to the 2008 sessions: Hawaii, Michigan, New York, North Carolina, Rhode Island, Vermont, and Washington.

Five additional bills have been introduced this year: Hawaii, Illinois, Maryland, New Hampshire, and Tennessee. The Maryland and Tennessee bills were withdrawn.

Although the Illinois bill was scheduled for hearings several times, the bill was re-referred to the Rules Committee where it failed. There has been no action on bills in Hawaii, Michigan, North Carolina, Rhode Island, and Washington (now adjourned).

New Hampshire held two hearings on a DNM bill in January. Representatives for postal workers, the printing industry, and direct mail marketing testified against the bill. The full Commerce Committee voted 14 to 1 to recommend the bill “inexpedient to legislate” to the full House. Rules required the bill to be considered on the House floor where it failed.

In Vermont, a hearing was held in February on HB 409. Representatives from ForestEthics, Seventh Generation, the Vermont Solid Waste Management District, and the Vermont Public Interest Research Group testified in support. Representatives for postal workers, the printing industry, and direct mail marketing testified against the bill. To date, the committee has taken no further action on the bill.

The recent legislative successes on the state Do Not Mail issue demonstrate the benefits of the coordination that the Mail Moves America coalition provides the mailing community. Each coalition member, including founding member DMA, brings its particular talents and resources to the effort. To learn more about Mail Moves America, how you can get involved, and the status of legislation, visit www.mailmovesamerica.org.

List Exchange Restrictions

Maryland HB 757 would have prohibited a business from disclosing personal information obtained as a result of a consumer transaction with a third party for compensation. Another Maryland bill (HB 284) would have prohibited merchants from sharing or selling personal information or marketing information about a resident. HB 284 defined marketing information as the detailed purchasing history of a consumer loyalty cardholder. Both bills failed.

New Jersey AB 1861 directs the state to establish a Do Not Sell list for residents who do not wish to have their financial or personal information sold, and requires the list to be updated at least quarterly. The bill has been referred to the Assembly Consumer Affairs Committee.

Do Not Deliver

New Jersey AB 1111 was reported favorably from the Assembly Consumer Affairs Committee in early March. The bill defines newspapers delivered to private property, if the property owner has requested in writing not to receive the newspaper, as a litter-generating product and subject to litter laws.

Bills prohibiting delivery of unsolicited print publications or local telephone directories, unless there is an opt-out notice, were considered in Maryland and Washington. The Washington bill was reported favorably from committee but died on the floor. Both Maryland bills were withdrawn. Similar bills in Minnesota and North Carolina are still pending.

New Jersey AB 801 establishes a Do Not Solicit list for vulnerable consumers, such as senior citizens or persons with mental illness. The bill would prohibit mail, telephone, or email credit card solicitations or the granting of a credit card to a consumer who has been on the list for more than 30 days. Consumers on the list are not liable for debts arising from use of unsolicited credit cards. A hearing was held in the Assembly Consumer Affairs Committee in March, but it has yet to take action. New Jersey bills remain active through 2009.

Two Massachusetts bills seeking to establish a Do Not Knock registry were set aside for further study in early April. HB 207 and HB 336 authorize the chief of police or other official to establish a procedure that allows residents to state they do not wish to receive unsolicited door-to-door sales visits. Such salespersons must register with the city, obtain the list, and comply with the consumer’s request.

Data Security/ID Theft

Data Breach Notification. At the beginning of this year, 39 states and the District of Columbia had some form of data breach notification law in place. So far in 2008, five additional states have passed notification measures.

If all of the new measures are signed, the only states that will not have a notification law will be Alabama, Kentucky, Minnesota, Mississippi, Missouri, and South Dakota. However, Alabama and Missouri have data breach notification bills pending.

Payment Data Storage. Minnesota’s HB 1758 (enacted in 2007) was the first law expanding the existing security breach notification law to prohibit any entity that accepts an “access device” and does business in the state from retaining the card security code data, the PIN verification code number, or the contents of any magnetic stripe data for more than 48 hours after authorization of the transaction. If an entity suffers a security breach and is in violation of this prohibition, the entity must reimburse any financial institution that issued “access devices” affected by the breach for the costs of reasonable actions undertaken by the financial institution.

California Governor Arnold Schwarzenegger last year vetoed a similar bill (AB 779), stating “this measure creates the potential for California law to be in conflict with private sector data security standards.”

Similar bills have been introduced in eight states, but none have passed in 2008.

Internet Third-Party Preference Marketing. Bills regulating and limiting third-party preference marketing are being actively considered in Connecticut and New York.

New York’s AB 9275 and SB 6441 provide the “Third-Party Internet Advertising Consumers’ Bill of Rights.” The measures require detailed privacy policies covering how third-party online advertisers collect and disseminate information about consumers’ online behavior. They require that consumers be given adequate notice regarding how third-party advertisers operate. They also require a clear and conspicuous mechanism on websites for consumers to opt-out or, in some cases, opt-in for the receipt of such online advertising.

Connecticut HB 5765 has similar provisions. Many business groups and companies oppose the measures.

Telephone Marketing

California AB 2059, sponsored by Assembly Speaker Fabian Nuñez, requires that any mailed solicitation requesting permission to call a consumer must provide a notice that the consumer may receive telephone solicitations even if they are listed on the FTC’s National Do Not Call Registry. DMA is in discussion with the Speaker’s staff on alternative language to make the bill consistent with federal law. The bill is pending on the Assembly floor.

Georgia SB 379 requires a disclosure of the location of the solicitor. The bill passed the Senate, but failed in the House.

Maine Governor John Baldacci signed a bill into law which clarifies, consistent with federal law, that calls to consumers with an established business relationship (EBR) are exempt from the Do Not Call list for 18 months. In legislation passed last year, the EBR exemption had been left out. DMA supported Maine’s clarifying legislation.

Missouri HB 2154 adds business subscribers to the state’s no-call list. The bill is pending in the House Special Committee on Utilities.

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