31% of Top UK Companies are still Breaking Email Privacy Laws

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The latest study published by data and marketing specialists CDMS has revealed that 31% of top UK companies are not complying with the EU Directive on Privacy and Electronic Communications, 2 years after it became law in the UK in December 2003.

This Europe-wide legislation, which governs email communications with private individuals, demands that companies only send unsolicited sales messages via email to non-customers if they have actively opted-in to receiving them. In practice, this means that whenever someone's details are recorded — for instance as part of a money-off promotion or a competition — they must be asked whether they want to receive subsequent sales marketing e-messages from that company or any other third party. The legislation makes it crystal clear that simply offering someone the opportunity to opt-out of receiving unsolicited emails (or indeed pre-ticking an opt-in box) does not comply with the Directive.

Having conducted a similar exercise in 2005, the CDMS study once again examined compliance amongst the top 200 companies across twelve main consumer business sectors — Banking, General Insurance, Credit Card, Building Societies, Publishing, Broadcasting, Retail, Fixed and Mobile Telecoms, FMCG, Utilities and Travel. Companies in each sector were tested to see whether they consistently offered non-customers the opportunity to actively opt-in/consent to further marketing emails when their details were recorded as the result of a promotion or enquiry. These promotions appeared either on the company’s own web site, through a partner company’s website, in a third party e-newsletter, or as part of an advertising or direct mail campaign .

On average, 69% of companies studied are now compliant with the legislation, a very modest improvement of some three percentage points since 2005, despite the law having been in operation for almost three years. Ian Hubbard of CDMS comments, " The experienced marketing directors represented by this 69% have recognised and accommodated this restriction on e-marketing in Europe. Many of them put preparations in place that not only ensured immediate compliance from the legislative enforcement day of December 11^th 2003, but also developed intelligent offline marketing initiatives (usually direct mail) to fill the gap which was seen to be left by the removal of this prospecting channel. Since enforcement day at the end of 2003, forward-thinking companies have come to view email marketing as almost exclusively a customer management and marketing channel, unless active permission has been obtained. These leading proponents now tend to focus their new customer acquisition activity onto a combination of traditional media (as the first approach) plus email and web (as one response mechanism).

Companies who have not complied are putting their carefully built brands at risk, by putting out the message to consumers that they apparently don’t care about legislation designed to protect their prospective customers’ privacy. This effectively puts them in the category of junk emailers, and associating them with a rising tide of spam, and growing consumer concerns over the security of their personal records.

Non-compliant companies urgently need to put processes in place to limit their current risk, before finding themselves the subject of a highly public complaint, or a test case prosecution such as that successfully pursued by a Guernsey businessman at the end of last year.In addition, there is a major forensic and clean-up job to be done on these companies’ marketing databases. In effect, each firm has to set up a proper fail-safe permissions section to its contact database to ensure compliance. This can be matched against commercially available opt-in databases to double check whether someone has given permission through another party to receive unsolicited email in the company’s business category. Failure to observe these routines is, quite simply, breaking the law, and the situation will certainly catch up with organisations that do not now sit up and pay attention to the issue. We would exhort those who have not yet paid full attention to this issue to do so with all speed, before enforcement test cases start to be launched, either by individuals or by the regulatory authorities, and before consumer lobby groups (and consumers themselves) blacklist them. "