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It’s becoming more common for marketers to contract with a number of third parties to send their marketing e-mails, display their online ads or make consumers aware of their products. Marketing channels can be vast and, for all but the largest companies, hard to navigate. In fact, it’s often much easier to contract out to affiliates—and trust they’ll get the job done right.
Unfortunately, when the law gets into the mix, you don’t always have that privilege. In recent months, e-mailmarketers in both New York and California have been sued by regulators over their use of e-mail addresses. In both cases, the marketers hadn’t collected the addresses themselves, but had acquired third-party lists that had promised consumers they wouldn’t divulge their information.
The principle here is that if a business partner is acting fraudulently by selling lists in violation of privacy promises or legal restrictions, the company that buys the list may now also be held liable. This notion is sometimes called the “agency theory” of liability, and it’s an idea that is gaining support. The Center for Democracy and Technology and the FTC both have made it clear they intend to publicly shame—if not bring to court—advertisers that work with less than reputable affiliates. State regulators are on board, as well.
At a recent “Green Lights & Red Flags” forum in New York sponsored by the FTC and the Better Business Bureau, Lesley Fair, senior attorney with the FTC, fleshed out something of what this means for marketers. “You should assume,” she noted, “that what your clients are saying … should be substantiated.” In other words, if a third party takes action on your behalf, you should ask yourself, “Would it be OK if I had taken this action?” If the answer is ‘no,’ you may have a problem.
If you’re not paying attention to the business practices of these third parties, you ought to be: It’ll keep the regulators away, not to mention help alleviate any consumer concern over the information they’ve provided.
Isaac Scarborough is manager of market intelligence at Chapell & Associates, a privacy consulting firm in New York. He can be reached at iscarborough@chapellassociates.com.
Unfortunately, when the law gets into the mix, you don’t always have that privilege. In recent months, e-mailmarketers in both New York and California have been sued by regulators over their use of e-mail addresses. In both cases, the marketers hadn’t collected the addresses themselves, but had acquired third-party lists that had promised consumers they wouldn’t divulge their information.
The principle here is that if a business partner is acting fraudulently by selling lists in violation of privacy promises or legal restrictions, the company that buys the list may now also be held liable. This notion is sometimes called the “agency theory” of liability, and it’s an idea that is gaining support. The Center for Democracy and Technology and the FTC both have made it clear they intend to publicly shame—if not bring to court—advertisers that work with less than reputable affiliates. State regulators are on board, as well.
At a recent “Green Lights & Red Flags” forum in New York sponsored by the FTC and the Better Business Bureau, Lesley Fair, senior attorney with the FTC, fleshed out something of what this means for marketers. “You should assume,” she noted, “that what your clients are saying … should be substantiated.” In other words, if a third party takes action on your behalf, you should ask yourself, “Would it be OK if I had taken this action?” If the answer is ‘no,’ you may have a problem.
If you’re not paying attention to the business practices of these third parties, you ought to be: It’ll keep the regulators away, not to mention help alleviate any consumer concern over the information they’ve provided.
Isaac Scarborough is manager of market intelligence at Chapell & Associates, a privacy consulting firm in New York. He can be reached at iscarborough@chapellassociates.com.
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