PPI loophole opens spam floodgates

Law-makers have inserted a loophole in the current version of the Protection of Personal Information (PPI) Bill.

This paves the way for unscrupulous companies to continue selling consumers' personal information, and dashing hopes for an end to spam.

The PPI Bill was intended to cut down on unwanted e-mail and stop dodgy companies from flogging people's personal details. It was hailed as a welcome piece of legislation that would have provided relief from overflowing mail boxes.

The previous working draft of the Bill stopped direct marketers from using people's information to sell to them unless the consumer was already a client, or the company had the consumer's permission. As a result, selling people's information would be illegal.

However, the current working draft has shifted the goal posts and allows marketers to approach consumers “once” to get their consent to use their personal information. PPI specifically refers to direct marketing through fax, SMS, automatic calling machines and electronic mail.

Under the Consumer Protection Act, people can sign up on a national “do not contact” list, which will make it an offense for marketers to contact them. However, that database has yet to be created.

It's not clear when the national “do not contact” registry will come into effect, and the PPI - in its current guise - could become law before the database is finalised. The PPI legislation is generally expected to be enacted towards the end of this year.

Pieter Streicher, MD of BulkSMS.com, says the new clause is “problematic”, because it “opens the door for the buying and selling of personal data again”.

The change “creates a market for buying and selling personal data”, notes Streicher. The clause has “clearly” been inserted for when companies do not have people's permission to market to them, he says.

An opt-out clause is “impossible” to enforce when people are being spammed by companies they do not already interact with, explains Streicher. An opt-in system would weed out unscrupulous companies as it's easier to enforce, he says.

While companies can only contact people once to get permission, this does not stop firms changing their name and bombarding consumers with spam.

In its current form, the law paves the way for people to be contacted “many times under many different guises”, Streicher adds. In addition, the shift places the onus on consumers to keep track of who has contacted them, and how often. “Do you know who has contacted you, and how many times?”

The entire point of the PPI Bill is to have consumers' consent to pass on information, comments Streicher.

Spam accounts for between 70% and 95% of all mail received by Internet service providers (ISPs). The cost to filter it is a significant expense for service providers, as well as the consumers who pay for downloading it if it gets through filters.

Streicher says spam is becoming more difficult to control. He points out e-mail spam only needs a low conversion rate to be successful. For example, Viagra spam relies on one in 12.5 million e-mails hitting the mark.

Unsolicited mails are harming responsible direct marketing companies, says Streicher. E-mail will become useless for business purposes if people are allowed to send unsolicited communication. ISPs are constantly blocking domains, but spammers just hop over to a new server, he says. “There is a real cost to the economy.”

TouchBasePro marketing director Cordell Brewer says clients are more likely to go for opt-in marketing e-mails if they believe their data will not be sold on to spammers and that they will be able to opt out whenever they want.

“E-mail marketing is not just about getting your product offers in front of the consumer's eyeballs,” says Brewer. "It is also important to provide a brand interaction that consumers value and enjoy. That means avoiding any practices that will lead to spam complaints.”

“Regulation and discouragement of unwanted or unsolicited commercial mailing will work in the favour of legitimate marketers,” adds Brewer.

Direct Marketing Association of SA CEO Brian Mdluli believes the Bill “will move our industry towards best practice”. He says the Bill, in its current format, still works on an opt-in basis because marketers can only contact people once to get their consent to receive communication.

“We are currently working with legislators to find a balance between consumer protection and the growth in the direct marketing industry, which currently employs in excess of 150 000 individuals.

“Every citizen in the country has the right to information and access to business offers that add value to the growth of the consumer.”

Mdluli points out that consumers can register their details on a national opt-out registry, which will stop marketers from contacting them at all.

However, the registry has yet to be set up and the industry is still waiting for a tender to be awarded for a company to manage the list. “The existence of the 'do not contact' database is becoming more important by the day,” comments Mdluli.

Warren Moss, CEO of Demographica, argues that if the law stays opt-out then consumers could miss out on product offers that could be to their benefit. He says, however, there should be a list that will stop marketers from contacting people who already have a similar product.

“Not all marketers are transparent enough to explain product details so you know what you're buying,” says Moss. This could lead to consumers buying the same product twice, but under a different name.

Moss argues the PPI should be opt-out, but there is not enough regulation around what products can be sold through direct marketing.