DM News Essential Guide to Lists and Databases: Do List Brokers Need a Law Degree?As I write this article, I'm looking around my desk at stacks of legal documents that my attorney is in the process of reviewing for my company. They include non-disclosure agreements, indemnification letters, list rental agreements and credit bureau-prescreen contracts. I acknowledge that these assurances are important to conduct business in financial services marketing today. It compels me to think about how our job as list professionals is changing.
I have seen many changes in the business in the past 32 years, but none as rapid as those of the past 18 months. We have become regulatory watchdogs and "legal experts" on behalf of our clients in light of new laws and so we can conduct business ethically as vendors and valued marketing partners.
For several years, the financial services sector has been scrutinized for its use of data. Because of government regulations and the public's concern with privacy, the use of personally identifiable data and, most recently, data security breaches, the list community has faced several challenges.
Given the shrinking direct mail list populations, it's essential that the list community make its best efforts to understand the sources of compiled financial transactional data. It seems that the mantra for our industry has become "another day, another database." New companies are promoting large transactional databases of repackaged data. As professionals, we need to be cautious and navigate through the explosion of databases to the market.
Rightfully, politicians, the media and the issues involving the Internet have brought control to the free flow of information that the list community previously experienced. List brokers need to be at the forefront of the information channels to help educate and implement best practices to ensure compliance with the expanding range of legal and regulatory concerns. However, are these concerns breeding needless paranoia and wasting time and money?
For example, I recently was asked to sign a non-disclosure agreement on behalf of my list management company. This NDA was for a mailer whom I do not work with on the list brokerage side, but who simply had ordered a list. The NDA was designed to ensure that I, a financial services broker, would not use the results of the list as market intelligence for my clients. When I challenged the legitimacy of the document and the reason I was asked to sign it, the broker told me I didn't need to do so after all and that he still would continue to rent the names on behalf of his mailer.
As another example, a financial services vendor sent an indemnification document that required a signature from both a list owner and list manager to continue using our managed properties. The document stated that "future use of (these lists) will be impacted if this document is not signed."
In both instances, I asked myself: Where does the accountability lie? Is this type of documentation necessary to do business? Is it good for the industry?
Have we gone too far - or not far enough?