DMA Releases Annual Compliance Report; Urges Focus on Enforcement

February 21, 2012 — DMA has released its Annual Compliance Report, naming companies not in compliance and summarizing the consumer affairs, investigation, and casework of DMA’s Corporate & Social Responsibility (CSR) department. DMA’s CSR Department and Ethics Operating Committee review complaints about member and nonmember consumer and business marketing business practices to ensure consumer concerns are properly handled and that marketers are following industry best practices.

DMA’s goal is to protect the marketing industry from unreasonable regulation through a strong self-regulatory mandate for members. DMA considers self-regulation to be a key to its successful mission in fostering marketing innovation across channels, all of which is essential to a bright future for the marketing industry. All members are expected to be in compliance.

Key findings include:

· Consumers want choices and rely on DMA to resolve marketing complaints.

Thousands of consumers continue to rely on DMA to address their consumer complaints and answer basic inquiries about marketing practices across all marketing channels. Consumers use the no-cost website, www.DMAchoice.org to process future unwanted mailing requests and to contact DMA for help with other unwanted marketing offers.

· Deceptive offer complaints increased.

Committee members and staff saw an increase in complaints about deceptive offers. These are cloaked as a government notice, as an invoice, or as one kind of product or service, when in fact they are a marketing offer for another kind of product or service. Consumers reported a lack of trust in the marketing process when they found that the true nature of the marketing offer was not what had been originally offered. This continues to be a serious concern regardless of the marketing channel.

· Digital accountability is an important focus for both marketers and privacy compliance professionals, yet more enforcement against fraudulent actors by regulators is needed to protect consumers and legitimate businesses.

DMA increased its focus on digital accountability in order to address regulators’ and consumer advocates’ concerns by launching an effective complaint process for online behavioral advertising. Yet the majority of consumer complaints received by DMA did not focus on behavioral, relevant ads. Most came in the area of online ads in general, mail, email, and phone marketing. This demonstrates that more work needs to be done to enforce existing laws regarding potentially fraudulent offers across channels and a greater focus is urged on enforcement in addition to a focus on relevant ads and provision of choices.

“Regulators are urged to increase enforcement since bad actors committing fraud can taint the marketing process for consumers and for legitimate companies and organizations,” said DMA Senior Vice President of Corporate and Social Responsibility Senny Boone. “Marketers are doing their part to ensure adherence to self-regulation across channels, but more help is needed from federal and state enforcement agencies in order to prosecute illegal activity.”

Summary of Process

The Committee reviews the organizations and their marketing practices using DMA’s Guidelines for Ethical Business Practices. (See www.dmaresponsibility.org/Guidelines/)

Members that do not comply with Committee requests face DMA censure, suspension, or expulsion. Organizations, regardless of membership status that do not cooperate and that may also reflect potentially illegal activity are referred to law enforcement. The Committee meets approximately eight weeks apart to review potential cases and to make its recommendations on appropriate actions for DMA in the particular matter.

Companies not in compliance are listed at www.dmaresponsibility.org/companycompliance/

During this compliance report review period - February 2010 through November 2011 – DMA CSR staff processed over 15,000 consumer and company inquiries regarding marketing practices via online, mobile, social, mail, phone and email. The Ethics Committee met 11 times in this time period and reviewed 64 cases based on marketing offers during this time period through its confidential proceedings.

Of particular note, this compliance period includes a major effort by DMA to address digital accountability and privacy concerns. DMA is adhering to the FTC’s request for a strong and effective self-regulatory program for its membership especially with regards to adding online behavioral advertising review. DMA now serves as one of the accountability and enforcement mechanisms for online behavioral advertising.

To read the report, see www.dmaresponsibility.org/CaseReport/

About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the world’s largest global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including half of the Fortune 100 companies.

In 2012, marketers — commercial and nonprofit —will spend $168.5 billion on direct marketing, which accounts for 52.7 percent of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures will generate approximately $2.05 trillion in incremental sales. In 2012, direct marketing accounts for 8.7 percent of total US gross domestic product and produces1.3 million direct marketing employees in the US. Their collective sales efforts directly support 7.9 million other jobs, accounting for a total of 9.2 million US jobs.

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