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The UK's Advertising Standards Authority (ASA) yesterday issued a ruling against an online DVD rental company that sent marketing emails to addresses on a list that it had bought under the impression that those on the list had consented to third party marketing.

Moviechoices.com, a division of Peterborough-based Home Entertainment Corporation plc, had purchased a marketing database of 216,000 customer email addresses from a liquidated company. The people on the list had consented to receiving email from the list seller. And Moviechoices.com was under the impression that they had also opted-in to receiving email marketing from third parties - it even had a contract that said so.

According to the ASA, the contract for the sale of the database "stated that the customers whose email addresses were being sold had given opt-in consent to receive electronic communications from third parties."

The contract also included declarations from partners of the liquidated company: "I confirm that the customer database ... comprises a list of email addresses of former customers of the company all of whom, to the best of my knowledge and belief, have agreed to receive electronic communications from third parties..."

But it appears that this was not enough.

A Cambridgeshire-based recipient of Moviechoices.com's promotion complained to the ASA. He argued that, yes, the liquidated company did have the right to send him email; but he said he did not give that company permission to pass on his details to third parties. The ASA upheld his complaint.

The ASA acknowledged that Moviechoices.com had purchased the database in good faith. Its mistake, it seems, was that "the advertisers had not sent evidence to show that the complainant, or any of the other customers of the liquidated company whose email addresses were sold, had given their explicit consent to the liquidated company to pass on their details to third parties."

The ASA appears to expect an audit trail to go further than a contract. It is the responsibility of third party marketers, it said, to ensure that explicit consent is "provided to the permission-holder in the first instance" and to provide the ASA with evidence of that explicit consent upon request.

Ultimately, the punishment was a slap on the wrist: Moviechoices.com was simply told to acquire the explicit consent of consumers before sending them commercial e-ails in future.

This was not punished as a breach of the laws on email marketing, which call for prior consent; rather, it was a breach of the CAP Code, which calls for "explicit consent". For marketers, the difference between prior and explicit consent - if there is one - is difficult to fathom.

But the CAP Code cannot be overlooked. It is administered by the ASA and sets out industry rules for non-broadcast marketing communications. Although lacking the force of legislation, the Code should be followed by all businesses and there are penalties available for non-compliance.

Shelagh Gaskill, head of the information law team with Masons, the law firm behind OUT-LAW.COM, said:

"This may seem harsh on e-mail marketers, but it is consistent with legislation that affects this area. Any email marketer needs to take reasonable steps to ensure the accuracy of the information on which it relies. Given that the seller of this particular list was in liquidation, the buyer should not have relied on the contract or any warranties that it may have been given by the seller. It should have demanded, for example, copies of the notice that was given to individuals when their email addresses were collected in the first place. If people have opted-out of email marketing or never gave their consent, you should not be emailing them."

The unnamed individual who complained to Moviechoices.com also pointed out that its email had not included a means of opting out of further emails. This is another breach of the CAP Code. The company explained that an unsubscribe facility was their standard practice and that, on this occasion, the omission was a mistake. Again, the ASA told the company "to take more care in future."

Copyright © 2004, OUT-LAW.com

OUT-LAW.COM is part of international law firm Masons.

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