Restrictions on Unsolicited Direct Marketing
3rd October 2005
Introduction
On 1 October 2005 the Unsolicited Communications Regulations 2005 (the “Regulations”) came into force.
The aim of the new Regulations is to provide Manx residents with greater protection against unsolicited marketing, whether it be by email (“spam”), phone or fax, and to bring the Island into line with the UK and other European countries thus preventing the Island from being used by opportunistic businesses as a base from which to conduct unsolicited marketing campaigns in other European countries.
The Regulations compliment, rather than over-ride, the current data protection regime. As such, the data protection principles and obligations set out in the Data Protection Act 2002 will still apply to any marketing campaigns.
So what will the new Regulations mean and how will they affect your marketing strategy?
Email
The Consent Requirement
An “email” is defined in the Regulations as “any text, voice, sound or image message sent over a public telecommunications system”. SMS and MMS mobile phone messaging are therefore caught by the Regulations.
Under the new Regulations, the use of email for direct marketing is banned except where an individual has given his prior consent. This is the so-called “opt-in” requirement. The most effective way of complying with the new consent requirement is to request that an individual checks/ticks a box on your website explicitly agreeing to the receipt of e-marketing from you.
Once consent has been obtained, any email that you send to that individual:
- must not conceal or disguise your identity; and
- must include a valid address to which the individual may address an “unsubscribe” request.
The Exception
An individual’s consent will not be required where:
(a) the individual’s contact details have been obtained by you in the course of a sale (or negotiations for the sale) of one of your products or services;
(b) the e-marketing must only relate to your own products and services which are “similar” to the products or services originally purchased (or negotiated to be purchased) by the individual; and
(c) the individual must be given a simple and free method of “opting out” at the time the contact details were/are initially collected and at the time of each subsequent e-marketing communication.
The above exception would not therefore cover the cross-selling of new or different products or services which would be subject to the new “opt in” requirement.
Use of Historic Databases
In respect of any e-marketing database compiled prior to 1 October 2005, as long as you have used the database regularly in the past 6 months, and as long as no individuals have objected to receiving your e-marketing, you may continue to use the database to send out marketing emails. Each marketing email, however, must disclose your identity and contain a valid method of unsubscribing.
B2B e-Marketing
The e-marketing restrictions set out in the Regulations are only applicable where the recipient is an individual (which, for the purposes of the Regulations, include residential subscribers, sole traders and unincorporated partnerships). As such, you will not need to comply with the above requirements when marketing to corporate entities.
Phone & Fax
The General Rules
Unsolicited calls for direct marketing purposes may be made to someone’s telephone number (fixed or mobile) unless:
- the recipient has already informed you that he does not wish to receive e-marketing calls from you; or
- the recipient’s telephone number is listed in the Telephone Preference Service register (“TPS”).
In addition, the use of fax machines for direct marketing purposes is permitted:
- as long as the recipient (being an individual) has previously notified you that he consents to receiving your faxes (this is effectively an “opt in”);
- unless the recipient (being a corporate entity) has previously requested that you stop sending such faxes; or
- unless the fax number of the recipient is listed in the Fax Preference Service register (“FPS”).
In respect of phone marketing, you must identify yourself and, where asked, provide a valid business address or freephone number at which you can be contacted. All such information must be printed on faxes.
The Preference Services
The TPS and the FPS are maintained by OFCOM in the UK. Manx residents may register their fax, landline and/or mobile phone numbers on the relevant register free of charge.
Once a number has been registered, you may still market to that number on condition that the owner of the number has notified you that he does not, for the time being, object to receiving marketing calls from you. However, the owner of the number is free to withdraw the notification at any time.
Cleansing Marketing Lists
Your phone and fax marketing databases must be checked against the TPS and FPS registers periodically to ensure that any numbers that have recently appeared on the relevant register are deleted from your database. (This process is known as “cleansing”.)
As it is an offence to market to a TPS or FPS registered number that has been on the respective register for 28 days or more, the “cleansing” operation will need to be done at least once a month. A number of specialist companies now provide this service for a fee.
B2B Fax/Phone Marketing
Whilst it is possible for Manx companies to register on the FPS register, it is not possible for them to register on the TPS register. As such, B2B phone marketing (unlike B2B fax marketing) will not be subject to any restrictions set out in the Regulations.
Automated Calling Systems
You may not circulate e-marketing via an automated calling system (i.e. a system which makes calls without human intervention) without the prior consent of the recipient.
The Wider Picture
Isle of Man businesses will still need to comply with the Regulations when marketing to people outside the Island. It should be noted, however, that the unsolicited communications regulations of another country may contain additional requirements to those set out in the Regulations. For example, in the UK, corporate subscribers are allowed to register their numbers on the TPS meaning that B2B telephone marketing is brought within the scope of the UK’s regulations.
In addition to the possible legal problems that may arise, it could be damaging for the reputation of a business if it persistently ignored the laws of the country to which it sent unsolicited communications. It is therefore advisable to seek legal advice in the relevant jurisdictions before carrying out any international marketing campaigns.
Whilst the new Regulations impose restrictions on marketing activities in or from the Isle of Man, they will not prevent unsolicited communications (such as spam) being received on the Island from less well regulated jurisdictions. However, as an increasing number of jurisdictions adopt legislation aiming to curb unsolicited communications, pressure will hopefully grow on those countries that have no such restrictions to toe the line.
Conclusion
Each Manx business will need to review its marketing strategy to ensure compliance with the Regulations. Key areas of review will include:
- websites – a clear “opt in” method will need to be included
- e-marketing – any emails, SMS or MMS mobile phone messages must disclose the sender’s identity and must include a valid method of unsubscribing
- phone and fax marketing – all databases must be “cleansed” periodically against the TPS and the FPS
- automated calling systems – these will only be permitted where the recipient has expressly consented to receiving calls form such systems
Given the increased frequency with which types of unsolicited communications have hit the headlines (such as the SMS text messages informing you that “you have won a holiday” and encouraging you to reply to a premium rate telephone number), it is of no surprise that the Isle of Man Government has introduced the Regulations. Manx residents are afforded more protection and the potential loophole enabling entities to use the Island as a base from which to conduct international unsolicited marketing campaigns has been closed.
Tristan Head is a senior associate in the corporate department at Cains Advocates Limited specialising in e-commerce and data protection law.
For more information contact: Tristan Head.
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