New rules make life tougher for direct marketers

For a business, getting your message across to the customer can be tricky at the best of times. Businesses often use a diverse range of channels to communicate with their potential customer base, and in so doing businesses need to be aware of various rules concerning this activity, write Philip Nolan and Robert McDonagh

Any company that uses direct marketing as one of those channels of communication has some extra thinking to do. Data protection legislation brought in last month means that non-compliant companies (intentional or otherwise) risk prosecution by the Data Protection Commissioner.

These new regulations, enacted on the back of EU legislation, concern what is known as "permission-based marketing".

Specifically, the rules govern communications that are not requested by the recipient, known as "unsolicited communications" where they are designed for the purpose of direct marketing.

As ever in business, the devil is in the detail. Upon close inspection, the regulations set out various principles that are helpful to consider in some detail.

Under the legislation, direct marketers may not contact people by telephone if the recipient of the call has either notified the marketer that they do not wish to receive marketing calls (i.e. that they have "opted out"), or if the recipient has registered on the National Directory Database, and have indicated that they do not wish to be contacted for marketing purposes.

The net result of this is that direct marketers may have to consult the National Directory Database before making unsolicited phone calls. There is one major source of uncertainty - the "opt-out" section of the National Directory Database is not yet fully operational.

The legislation extends beyond unsolicited phone calls. Here the rules differ based on whether the contact is made with an individual or a corporation.

For individual contact, the regulations provide that a person shall not send an unsolicited communication by email, fax or automated calling machine, unless the recipient's prior consent is obtained. Therefore, before directly marketing to individuals by these means, the marketer must have "opt-in" consent.

With regard to contacting companies, marketers now cannot make unsolicited communications by fax, email or automated calling machine if the company has previously notified the marketer that they do not agree to receiving such communications, or where the entity is registered with the National Directory Database indicating that they don't wish to receive such communications.

Where individuals must have "opted in", companies must not have "opted out" in order to be contacted by direct marketing.

The minefield for direct marketers is the considerable task of confirming that an intended recipient has either opted in or opted out of receiving direct marketing communications, depending on who the intended recipient is (individual or corporate), and the method of communication used.

They may also have to consult the National Directory Database to confirm whether or not the recipient has opted out.

There is one element of leniency in what is otherwise a thorough set of guidelines. Despite what has been said above, businesses that use direct marketing may use a customer's email details for direct marketing, where those details came into the direct marketer's possession in the context of the sale of a product or service.

However, the customer must be given an opportunity to unsubscribe from any further such communications.

Also the details can only be used to market a similar product or service. Thus, an airline company that acquired the customer's email details through selling an airline seat, may encounter problems in directly marketing unrelated telecommunications products.

Consumer groups may welcome the added protection. However, it remains unclear what effect the legislation will have on international businesses operating (or indeed seeking to operate) in Ireland, that have significant online sales or telesales channels.

Philip Nolan and Robert McDonagh, Mason Hayes and Curran, Solicitors