When you're lying awake at night, going through your mental checklist of job-related worries, is compliance to federal, state and local laws and regulations one that springs immediately to mind? Probably not. But perhaps it should, given the complexity of today's regulatory environment.
As the Association of Corporate Counsel points out, there are federal, state and local regulations covering virtually every facet of marketing, including:
- what you can say about your products and services;
- what you can say about other companies' products and services;
- whether and how often you can contact customers and prospects by phone, email or other channels;
- what information you're allowed to collect; and
- what you can do with that information.
Failing to comply with these requirements can lead to expensive litigation, fines or even criminal charges, not to mention negative publicity that can harm your brand and bottom line. For example:
- In May, Skechers agreed to pay a $40 million fine for using what the Federal Trade Commission deemed deceptive advertising to sell its 'Shape-Ups' shoes.
- In July, Netflix agreed to pay $9 million to settle a class action lawsuit alleging that the company unlawfully disclosed its customers' movie rental histories.
Not knowing the law won't protect you against penalties. So make sure you're familiar with, and adhere to, the regulations that apply to advertising and marketing activities across the board. If you work in a highly regulated field like finance or healthcare, you need to incorporate industry-specific regulations into your knowledge base, as well.
But your compliance responsibilities don't end with a thorough knowledge of your regulatory landscape. Here are four additional best practices to lower your risk and better prepared for potential audits or litigation.
1. Define Document Lifecycles
Work with your company's legal counsel to develop a formal, defensible retention schedule for all the information you create and send out. Clearly define what information is considered a record and develop policies and procedures to consistently and securely manage litigation holds and destruction when this information reaches the end of its retention period.
2. Include Electronic Communications
The internet and a host of wireless devices have opened new avenues by which to conduct business. Be sure all of your electronic communications are included in your retention schedule, whether they reside on PCs, servers, backup tapes, mobile devices or flash drives.
3. Keep Track of Older Documents
It's common to move older or out-of-date materials to basements or off-site storage. If you suddenly need a particular document for an audit, can you locate it in a timely manner (or at all)? Be sure your archiving system includes an index of stored documents, along with the location of each one. Better yet, digitize archived records so you can quickly access them online.
4. Work With Vendors Whose Standards Match Yours
If you outsource key functions like production and fulfillment of marketing materials, be sure your business partners' experience and procedures are a good fit for your compliance needs. At minimum, you should be looking for a partner that:
- has experience working with companies in highly regulated industries and is thoroughly familiar with compliance issues;
- can capture, index, securely store, archive and retrieve all versions of both paper and electronic documents created, modified or ordered through their systems;
- has a system that controls user access and ordering privileges and ensures that all required disclosures and addenda accompany any marketing materials ordered; and
- offers timely on-site or off-site destruction that protects confidential information by using modern shredding equipment, highly secure processes and certification of destruction to create a legal audit trail.
Taking steps now to ensure compliance will protect you from unpleasant surprises down the road—and let you sleep a lot better at night.