Another California Privacy Bill Takes Aim at Direct Marketers

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California lawmakers are at it again with yet another privacy bill that would impact direct marketers. It comes only a week after Gov. Gray Davis' signing of the California Financial Information Privacy Act on Aug. 27 that mandates opt-in consent for the sharing of financial data.


The proposed bill, S.B. 27, would mandate that companies keep records of all customer data that is shared with third parties offline or online for direct marketing purposes. In its current form, the law would require that companies provide consumers with all the data that was shared and the names of the third-party data users within 30 days of a request by the consumer. The bill would any company doing business in California.


The bill was introduced Dec. 2, 2002 by Sen. Liz Figueroa and has since passed the California Senate. It has been working its way through the state Assembly since June and is expected to pass the Assembly within the next 10 days, according to the Direct Marketing Association, which issued a statement yesterday.


The DMA also strongly urged its members to contact Figueroa and their state assembly members to inform them of the negative impact this bill would have on their businesses. The bill identifies 27 categories of information that would need to be disclosed. A customer also would be entitled to recover a civil penalty of up to $3,000 per violation, plus attorneys fees and costs.


Of the broad scope of the bill, an attorney specializing in advertising, marketing, e-commerce and privacy said the current bill will likely end up as a jumping off point.


"This bill in the classic California fashion is a shot across the bow to the industry that in my opinion will be a starting point for a discussion about the practices of the list industry," said D. Reed Freeman, an attorney at Collier Shannon Scott PLLC, Washington. "The way these things tend to work is that an aggressive bill is introduced that generates a lot of discussion and brings an issue to light and California is well regarded for being the first to approach important issues."


Freeman said marketers need to make lawmakers understand how they conduct their businesses.


"I think there's this big fear among legislators that there's this vast network of 'Wizard of Oz' type people hiding behind cloaks doing scary things," he said. "I think this bill gives the industry a great opportunity to explain how it works. This bill undoubtedly is well intentioned but it really does threaten an entire industry."


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