DMA CITES TWO COMPANIES FOR ETHICS VIOLATIONS

NEW YORK, March 25, 2003 – The Direct Marketing Association (The DMA) has cited No More Mail (Wheeling, IL) and Operation Hang-Up (Washington, DC) for violations of its Guidelines for Ethical Business Practice. Both companies were cited in The DMA’s Ethics Case Report for the second half of 2002, which highlights 30 cases handled against DMA member and non-member companies.

The report highlights cases handled by the Committee on Ethical Business Practice and the Teleservices Ethics Operating Committee.

"This action demonstrates the success of peer regulation," said H. Robert Wientzen, president & CEO, The DMA. "If a company acts in an unethical manner, and does not comply with our ethics committees’ requests for information, we will publicly cite the company for non-cooperation and refer it to the authorities when appropriate."

For the first time, the report includes a standard "complaint form" that marketers, consumers, and government and consumer officials can use to submit cases for consideration by the Committees. The form is available on The DMA's Web site at www.the-dma.org/guidelines/EthicsComplaintForm.pdf.

The Committee on Ethical Business Practice reviewed five online promotions, including two promotions from companies that did not resolve the Committee’s concerns:

• No More Mail (Wheeling, IL) did not resolve Committee concerns regarding disclosure of limitations of its services. The Committee viewed No More Mail's Web site claims that consumers who sign up for its services will be removed from specific mailing and telephone marketing lists to be inaccurate and misleading. Marketers are not obligated to accept name-removal requests not sent to them by consumers themselves. The company amended its service agreement to indicate it could not guarantee the honoring of removal requests; however, the Committee communicated to the company that it believed more prominent disclosure in other areas of the Web site was needed.

• Operation Hang-Up (Washington, DC) did not respond to Committee concerns regarding its claims that payment of a $29 fee "stops telemarketing calls, guaranteed." The company sent listings of telephone numbers to companies, including some nonprofits, along with name-removal instructions to follow. Federal laws requiring company do-not-call lists were referenced. The Committee viewed both the material on the company's Web site and the instructions to industry members as deceptive; the case was forwarded to the U.S. Postal Inspection Service.

The Committees also heard three additional online marketing cases, six cases regarding teleservices issues, 10 general advertising cases, and nine cases regarding privacy. All of these cases were resolved to the Committees’ satisfaction or are still under review.

The entire Ethics Case Report can be found at

www.the-dma.org/guidelines/ethicscase.pdf.

Marketers, consumers, and government and consumer officials can submit cases for consideration by The DMA’s Committee on Ethical Business Practice or Teleservices Ethics Committee. To file a case, use the new complaint form, or write to The DMA and include a copy of the promotion or an example of the practice that is of concern. For more information about the Committees or other DMA Ethics and Consumer Affairs Department programs, or to submit a case for review, contact:

The Committee, composed of 15 direct marketing executives, one of whom serves as liaison to The DMA Board of Directors, handles complaints about member and non-member marketers. It judges marketer practices and promotions’ compliance with The DMA's ethics guidelines and, where the guidelines are not satisfied, works to bring companies into compliance. DMA members who don't comply with the requests of the Committee face public DMA Board censure, suspension, or expulsion.

In cases where either a member or non-member company does not cooperate with the Committee's inquiry and the Committee believes a violation of law may have occurred in addition to a violation of the ethical guidelines, the case is forwarded to an appropriate law enforcement agency for its review, and such referral may be made public.

Established in March 2002, The DMA Teleservices Ethics Committee’s responsibilities are two-fold: to handle complaints against member and non-member companies in the teleservices segment of the direct marketing industry; and to issue policy and guidance to those marketing by telephone. The Committee is comprised of 10 individuals of representative member teleservices companies. As with the long-established Committee on Ethical Business Practice, the Teleservices Ethics Committee refers any members not complying with the Committee’s requests to The DMA Board of Directors for public censure, suspension or expulsion, and can forward cases to appropriate law enforcement agencies if it believes a violation of law may have occurred.

The complete text of The DMA's Guidelines for Ethical Business Practice can be found at www.the-dma.org/guidelines/ethicalguidelines.pdf.

For a companion guide, Do the Right Thing, which includes useful commentary and examples, visit www.the-dma.org/guidelines/dotherightthing.pdf.

Two new online educational features are: Ethics "How-To" Articles, a monthly discussion of specific guidelines, at www.the-dma.org/dotherightthing/ethicshowto/index and Ethics Case Studies, a monthly illustration of applying guidelines to cases, at www.the-dma.org/dotherightthing/ethicscasestudies.

The DMA has a Telemarketing Resource Center, which includes information on state do-not-call lists, the Telephone Consumer Protection Act, the Telemarketing Sales Rule, and The DMA’s Telephone Preference Service. See www.the-dma.org/government/teleresourcecenter.

Consult www.the-dma.org/preference for information on The DMA’s Mail, Telephone, and e-Mail Preference Services, its name-removal services for consumers:.

Members of The DMA are required to certify compliance with the Privacy Promise, which includes providing notice regarding their information practices, honoring opt-out requests, providing in-house suppression, and using The DMA’s name-removal services.

Information concerning information practices and privacy can be found at

www.the-dma.org/privacy/privacypromise.

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