September 2006 The effect of the pending privacy legislation on the Direct Marketing and Contact Centre Industries… Catastrophe or Opportunity?

Introduction to Andy Quinan Chairman of the Direct Marketing Association of SA Legislation Sub-committee Owner of Database Solutions - a list broker and direct marketing consultancy - Partner in the Contact Industry Hub - a new integrated marketing service for the contact centre industry, comprising of a web site, an newsletter and an industry database

The Direct Marketing Association of SA Founded to encourage and develop the highest standards of direct marketing in South Africa Encompassing all direct media - mail, telephone, broadcast, print, fax, electronic mail and the internet Representative of all direct marketers - financial, retail, advertising, mail order, contact centre, and electronic commerce industries

The Direct Marketing Association of SA Relaunched in December 2005 Section 21 company with new board Sub-Committees formed Services:Code of conduct Lobbying Training Awards Industry forum Legislation

The DMA Legislation Sub-Committee Formed in December 2005 specifically to represent the industry on legislative matters - membership is representative The Protection of Personal Information Bill Meeting with the SA Law Commission SALC Consultative Workshops Final Submission on 25 April 2006 Fully supported by SACCCOM 2nd draft due in September 2006

The Protection of Personal Information Bill - the issues Constitutional right of privacy Right of freedom of trade and access to information Consent - opt in or opt out Personal data versus sensitive data EU compliance - The Argentinean example Privacy Commissioner

The Protection of Personal Information Bill - the consequences Limit the use of prospect lists Uncertainty of final interpretation Registration of databases More bureaucracy Overlap with other laws Possibility that the views and rights of business would be considered

The Consumer Protection Bill Second draft published on 15 March 2006 Deadline for submissions first 26 May, then 26 April then 15 May DMA allies with Business Unity SA DMA submission in by 15 May 2006 Fully supported by SACCCOM BUSA Submission by 26 April 2006 Nedlac negotiations Final draft due in September 2006 To Parliament early 2007 Law by mid 2007?

The Consumer Protection Bill - the issues A good piece of legislation - for the consumer A controversial bill Fundraising and direct marketing specifically identified Section 13 (1) - express written permission Section 13 (2) - don’t compile a database without consent

Section 13 (2) A person must not initiate, sponsor, promote or knowingly participate in any activity, scheme or communication that is primarily designed for the purpose of accumulating confidential information or other identifying information concerning consumers, either surreptitiously or without their express consent.

The Consumer Protection Bill - the issues Opt-in or opt-out Do not contact registry The National Consumer Commission Overlap with other laws Moratorium

The Consumer Protection Bill - the consequences Potentially grave threat to the direct marketing industry Therefore a very serious threat to the contact centre industry If not changed - a catastrophe If changed - a drastic re-adjustment but survival

The Consumer Protection Bill - why a threat? Affinity marketing Compiled lists The changing demographics of SA The growth in telemarketing Credit cards, retail credit, loans and insurance The National Credit Act

The Consumer Protection Bill - why a threat? Estimated 30% of SA contact centres are outbound An estimated 20,000 plus agents are calling right now, primarily using compiled lists The list owners cannot afford to obtain consent Marketers will no longer be able to compile new prospect lists

A call to action Finalize the industry code of conduct Continue lobbying and dialogue with government departments Talk to the DTI via BUSA Conduct research into the impact of the legislation Unify and publicise the Do Not Contact Registry

Take up the challenge individually As a priority start a customer consent drive Relook at your systems, your copy, your strategy Form partnerships and alliances to create and confirm consent driven databases Make the privacy of your customers a reality