Screen Buyers of Data: Panelists at DMA's Fast Forward

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NEW YORK - Executives attending the Direct Marketing Association's Fast Forward 2006 Aug. 15 were advised that companies should follow industry guidelines, review promotions and know their business partners.

The DMA  guidelines mandate that list owners brokers, managers and compilers find out what marketers intend to use a list for.

"Properly screen people who are buying your data because if information is misused and leads to consumer detriment, you will pay," said Patricia Kachura, Washington, DC-based senior vice president of ethics and consumer affairs at the DMA.

It is important to be educated in this area, especially when reviewing promotions. List managers should be aware of what is legal and what is not, so that anything fishy can be spotted and dealt with right away.

"The FTC will hold list renters responsible for knowingly collaborating in an illegal offer, misrepresenting or violating scripts or promotions, not acting on information they are made aware of about specific offers or marketers and consciously avoiding knowledge about a legal violation," said Rebecca E. Khuen, assistant director at the Federal Trade Commission's Division of Privacy and Identity Protection, Washington, DC.

Recent settlements made by the FTC  highlight the fact that it is important to know whom you are doing business with, Ms. Khuen said.

She said that simply checking to see if a company has ever had any problems with regulators is the first step.

Ms. Kachura outlined legislative trends at the state level.

For example, California allows consumers to go over their data and even correct it. Illinois allows consumers affected by a data collector to be awarded compensation for the damage.

For its part, New York has proposed banning the collection and selling of information having to do with finances, lifestyle and purchasing preferences.

Ken Driefach, a lawyer at the Sonnenschein law firm, said that understanding key laws like the Telemarketing Sales Rule and the CAN-SPAM Act is crucial to avoid legal problems.

Mr. Driefach recommended firms get third-party counseling on compliance, security laws and regulations, responding to security incidents and evaluating potential liability resulting from breaches.

To their credit, companies are developing and implementing security programs designed to protect information. Such programs "can both establish and maintain the trust of partners and customers," Mr. Driefach said.
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