Direct Marketing Privacy Issues

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Direct Marketing Privacy Issues

The direct marketing industry has been a prime beneficiary of the technological advances in information processing. According to one industry commentator "the database revolution is the most significant recent arrival in the direct marketing industry...." Gary Levin, Database Draws Fevered Interest, Advertising Age, June 8, 1992, at 31. New technologies that process, manipulate, combine, and exchange personal data both quickly and economically allow industry to target goods and services to consumers in new ways.


Direct marketing accounts for $350 billion dollars in sales annually. About half the people in the U.S. now shop by mail. Judith Waldrop, The Business of Privacy, Am. Demographics, Oct. 1994, at 47. Target marketing increases the likelihood that catalogs and other promotional material will end up in the hands of consumers who are genuinely interested in these materials. Industry and consumers gain: customer service can be improved by target marketing, shoppers are offered extended shopping hours and immediate delivery, and marketers save money by sending marketing materials only to those consumers most likely to be interested in the advertised product.


But the proliferation of databases and lists of consumers they produce also implicates personal privacy. By collecting information regarding consumer preferences and purchases, marketers ultimately have possession of a persons's name, address, buying habits, and other individual social and economic data. Individuals have no legally enforceable right to be notified when marketing data is collected, who has the data, who has organized it into lists, and with whom such personal data is being shared. No law prohibits the use of information gathered for one marketing purpose for any other purpose, compatible or not. The leading consumer complaints about the direct marketing industry concern unsolicited mail and telephone calls. Privacy Rights Clearing House, Second Annual Report, Jan. 1995, at 23. Consumers often complain about receiving flyers from stores never shopped in, catalogs from mail order companies never ordered from, and banks and card companies never communicated with. Henry Hoke, editorial, Direct Marketing, Oct. 1994, at 82. This problem appears to stem from the use of personal information by third parties, such as database compilers, credit reporters, or credit-card issuing banks.