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16 December 1998
Mr JP O’Neill
Senior Assistant Commissioner
Australian Competition and Consumer Commission
PO Box 1199
Dickson ACT 2602
Dear Mr O’Neill,
Re: Application for Authorisation No. A40077 - Australian Direct Marketing Association Code of Conduct
I enclose a copy of my final submission.
We look forward to your decision.
Please refer to my earlier submissions for context and general comments. This submission supplements those earlier documents with some specific comments on the Code.
The definition of direct marketing restricts the scope of the Code. ADMA continue to claim that fundraisers, charities and a range of other organisations will be covered by the Code, yet they define direct marketing in a way which will exclude these organisations. We suggest the definition (in Appendix 1) is changed to an OR list rather than an AND list or widened in some other way.
Adequate coverage should not be assumed. Any organisation can make guesses and estimates about their coverage of particular activity – that should not be sufficient for the authorisation process. The test in this case should be an investigation of the volume of direct marketing contacts that will be covered by ADMA membership. This should include unsolicited mail, unsolicited email and telemarketing.
We submit that ADMA’s membership will not provide adequate coverage for this Code to be effective as a consumer protection mechanism.
This Code sets a shocking precedent in its definition of a consumer representative (on the Code Authority) as a person "with special competence in consumer or industry matters". This is completely outrageous and should require no further comment.
The Code should be subject to an independent review in accordance with Principle 6 of the DIST Benchmarks. The Code Authority should not be allowed to review itself.
In the complaints resolution section, consumers should be given equal rights on process issues. See in particular the rights given to ADMA members in sections 11 and 12 of the Enforcement section.
Customising the Privacy Principles
The National Principles for the Fair Handling of Personal Information were designed in such a way that they could be adapted or customised for particular industries.
ADMA have made no attempt to do this. There should be additional clauses on:
The don’t call/don’t mail service should be administered by a trusted third party to ensure consumer confidence.
Sanctions should be both broadened and defined. In the Smart Card Code, for example, there are specific provisions for the following sanctions:
"A requirement may include, without limitation, a requirement to:
Electronic commerce and email issues should not be dealt with in this Code. ADMA have noted that their membership does not currently include those responsible for unsolicited email. Issues surrounding spam and electronic commerce privacy issues are being debated at the international level – the vague standards set out in this Code achieve nothing except a significant lowering of the consumer protection benchmarks being championed in international fora. The OECD draft principles alluded to in the Code are the subject of vigorous criticism from the Australian government and should not be entrenched in this Code.
Unsolicited email raises specific problems and cannot be treated as ‘equivalent’ to other forms of direct marketing.
Cooling Off Period
The cooling off period has too many exemptions. There is no need for services to be exempt where they are delivered at a future date. It should be fine to begin the cooling off period from the first date of service. Books and magazine subscriptions should not be exempt (we note that this effectively exempts one of ADMA’s largest members – Readers Digest).
ADMA’s own research shows that the vast majority of consumers DO NOT WANT cold calling at home. ADMA have argued that the hours should be broad because of ‘changing work patterns’ but their own statistics show that just as many stay at home consumers dislike telemarketing as those who work.
The solution to an activity which people DO NOT WANT is definitely not to entrench broad hours for that conduct in a Code and then give it added weight by granting ACCC authorisation.
Other solutions are available
The enforcement section should refer to "consumers", not customers. It is likely that persons who are complaining will not be customers of ADMA members, just consumers.
In the Part B "cancellation and refunds" section, clauses 23.5 and 25 contradict each other.