Trans Union Loses Nod to FTC IN THE LATEST round of a long-running battle, a Federal Trade Commission judge has ordered Trans Union Corp., Chicago, to stop distributing and selling lists based on consumer credit data. Though the order was stayed pending the completion of appeals, Trans Union was told it can no longer extract high credit amounts, auto loan expiration dates and loan dates from its credit files for use in target marketing lists. The FTC ruled in 1994 that Trans Union’s sale of these lists violated the Fair Credit Reporting Act, but the U.S. Court of Appeals reversed that decision and ordered the FTC to conduct a trial. “Last time, the federal courts agreed that there were serious issues with the FTC ruling, and we think they will do that again,” said Oscar Marquis, a Trans Union vice president. Marquis added that the prohibition may violate the First Amendment. In his decision, FTC Administrative Law Judge James P. Timony pointed out that TRW Information Systems (now Experian) signed a consent decree with the FTC in 1993, agreeing to stop using such data. Experian now limits itself to above-the-line information such as name, telephone number, mother’s maiden name, address, ZIP code, year of birth and age. Timony also pointed to an FTC survey that found 68% of all consumers object to the use of credit information in marketing lists.
FTC Extends Rule to the Internet THE FEDERAL TRADE COMMISSION has expanded its 24-year-old negative-option rule to cover the Internet. Like their paper mail counterparts, Net continuity marketers now must “make all the disclosures required by the rule in a clear and conspicuous manner,” according to an FTC notice in the Federal Register. The rule requires a clear and conspicuous explanation of all terms in promotional materials for membership or participation in a program; advance notice of shipments with detailed information on how to reject them and return unwanted goods and services with prepaid postage; fulfillmentof introductory or bonus merchandise within four weeks of an order; and obtaining consumer permission before substituting ordered or promised goods and services. “We’re pleased that the rule has been reaffirmed and expanded because it has worked out well,” said DMA senior vice president for government affairs Jerry Cerasale. The FTC cited the DMA ethics program as a model of self-regulation.
FirstPlus Suspends All Michigan Mail FIRSTPLUS FINANCIAL INC., Dallas, has halted all direct mail into Michigan following charges that it deceived consumers about the size and availability of mortgage loans. Attorney General Frank J. Kelley launched an investigation when a member of his staff received a direct mail piece from FirstPlus at the government building where he worked, offering a loan using the government building as collateral. FirstPlus added in its statement that “the mailing to the assistant attorney general was a unfortunate result of the fact that the company purchases mailing lists from national marketing-list providers and other credible sources, which it believes to be reliable. Addresses included are typically residence addresses.” In legal documents filed by the Michigan Financial Institutions Bureau, FirstPlus also was charged with using names not approved by that bureau. FirstPlus does not expect the suspension to affect its profits, since only 2% of its mailings go to Michigan.
Global Buys Swedish Dmer GLOBAL DIRECTMAIL CORP., Port Washington, NY, has bought Dabus Dataprodukter A.B., a computer direct marketer located in Lidkoping, Sweden, for an undisclosed amount. Founded in 1963, Dabus has revenue of about $10 million. The company-Global’s fourth acquisition in Europe since 1990-will continue to distribute products through its 120-plus-page catalog and a Web site (www.dabus.se). “The acquisition will prove a great addition to European operations, allowing us to have a strong presence in Sweden and act as a gateway to other Scandinavian countries,” Global vice president of European operations Les Biggs said in a statement. Global is a computer direct marketer with annual sales of more than $1 billion.
AFP Settles in NY; Will Pay $800,000 AMERICAN FAMILY PUBLISHERS, Newark, NJ, has agreed for the first time to compensate people who bought magazines because they thought the purchase would improve their chances of winning the company’s sweepstakes. Under the deal, New York Attorney General Dennis C. Vacco will distribute $750,000 from AFP to about 12,000 New Yorkers. In addition, AFP will pay the state $50,000 to cover costs of its investigation. In March, AFP reached a $1.25 million settlement with 32 other states and the District of Columbia. Though New York participated in negotiating that deal, it withdrew because complaints increased after AFP’s January mailing, Vacco said. Several other states have outstanding legal actions against the company. New Yorkers eligible for the settlement are those who bought at least six subscriptions between November 1996 and November 1997 and an additional subscription in the two months following that period, noted Vacco.
DMA: Half Use Recycled Paper HALF OF ALL direct mail marketers used either recycled coated or uncoated paper in their promotions in 1997, a figure that has remained nearly unchanged for the past four years, according to a Direct Marketing Association survey. However, the percentage of mailers and printers displaying environmental labels to indicate recycled paper use dropped to 46%, from 59% in the 1995 survey. The recycled paper logo is the most popular with those respondents using labels. The lack of a positive impact on response was the most frequent reason given for not using such labels. DMers cited the following reasons for choosing recycled paper: to reuse a valuable fiber resource (34%); to meet customer expectations (31%); to save trees (13%); and to preserve landfill space (3%). Recycled paper is defined as having at least 10 percent post-consumer content.
