DMA RELEASES ETHICS CASE REPORT FOR JULY - DECEMBER 2004

NEW YORK, February 3, 2005 — The Direct Marketing Association (The DMA) today released its Ethics Case Report for July-December 2004. During this period, the Committee on Ethical Business Practice and the Teleservices Ethics Committee conducted in-depth reviews of marketing promotions or practices of 21 companies. Additionally, DMA ethics and consumer affairs staff handled 1,220 complaints and inquiries from consumers needing assistance with reducing the volume of unwanted direct marketing offers they receive, or with direct response transactions.

The current report includes summaries of 8 cases regarding the Collection, Use and Maintenance of Marketing Data, 8 cases on General Advertising and Business Issues, and 5 cases related to Teleservices Issues.

Two cases, Yellow Pages, Inc. and YourGiftCards.com, were referred to governmental authorities for review, in addition to two other cases handled by the Teleservices Ethics Committee.

Based on the cases heard, the Committees' report sends the following messages to direct marketers:

Compliance with The DMA's Privacy Promise is critical. Members who are consumer marketers, including nonprofit organizations, must, among other things, disclose whether they transfer customer or donor information to other marketers, and must honor name-suppression requests from existing as well as prospective customers or donors.

In the e-mail environment, there is considerable consumer confusion in identifying the parties responsible for honoring opt-out requests. Marketers need to understand that consumers think about the terms "opting-in" and "opting-out" differently from the way marketers view them. For example, an opt in to an affiliate does not, in the consumer's mind, give one the right to act as if that consumer asked to receive e-mail from you.

Material facts about an offer that are in difficult-to-read type, placed inconspicuously within the promotion, or are in conflict with the overall impression of the promotion are problematic. Marketers should especially use care in their use of the word "free" and in using offers that may appear to be invoices when they are not.

Four unresolved cases included Yellow Pages, Inc., of Anaheim, CA, YourGiftCards.com of Mountain View, CA, Handicapped Workers of America of Jacksonville, FL and Infolink Technologies Ltd. of Toronto, Canada. The Committee on Ethical Business Practice questioned the overall impression of the Yellow Pages, Inc. check offer, the clarity of disclosures relating to the check, and the nature of the advertising service.

Although Yellow Pages, Inc. notified the Committee of revisions, it failed to furnish a revised promotion to the Committee for review. Similarly, YourGiftCards.com represented to the Committee that revisions to clarify "free" products were being made; however, Web site changes addressing Committee concerns were not made. In the case of Handicapped Workers of America, the organization did not respond to requests to cease mailings to a consumer. Infolink Technologies' voice message technology was viewed by the Teleservices Ethics Committee as problematic. The case was closed without resolution because the company did not adequately respond to the Committee's concerns.

Full details of the latest Ethics Case Report, published bi-annually by the ethics and consumer affairs department, are available online at: www.the-dma.org/guidelines/ethicscase.pdf. For more information about The DMA's ethics guidelines, the Committee on Ethical Business Practice or the Teleservices Ethics Committee, please contact the ethics and consumer affairs department at ethics@the-dma.org.

If you are aware of a promotion or practice that should be brought to the attention of one of the Ethics Committees, contact department staff at ethics@the-dma.org, or use the online form at www.the-dma.org/guidelines/EthicsComplaintForm.pdf.

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About The DMA

The Direct Marketing Association (www.the-dma.org) is the leading trade association for businesses and organizations interested in direct, interactive, and database marketing, which in 2003 generated more than $2.2 trillion in US sales, including $134 billion in catalog sales and $41 billion in Web-driven sales. In addition to catalogs and the Web, DMA members employ a wide variety of marketing media, including mail, e-mail, telephone, newspapers and magazines, interactive television, and radio, among others. Founded in 1917, The DMA today has more than 5,200 corporate, affiliate, and chapter members from the US and 44 other nations. Reflecting the significant and growing role that direct and interactive marketing plays in today's advertising mix, The DMA's membership represents marketers from every business segment, including catalogers, Internet retailers, retail stores, nonprofit organizations, advertising agencies, financial services providers, book and magazine publishers, book and music clubs, industrial manufacturers, and a host of other vertical segments, as well as the service industries that support marketers.

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