Direct response marketing achieves success in a strong and trusted ecosystem. Since marketers’ businesses rely on supplier partners to reach consumers, those vendors are a key component in ensuring that customers are treated fairly and have an exceptional purchase experience.
One of the things ERA does without fail is set high standards for all members. Industry self-regulation initiatives and a focus on developments with the Federal Trade Commission (FTC) and on Capitol Hill keep our members—including our vendor partners—abreast of regulatory and legislative changes.
Unfortunately, recent developments suggest that regulators plan to expand liability throughout the ecosystem, rather than just focusing on the marketer of a given product. And that growing regulatory scrutiny is cause for everyone’s concern.
Recently, the FTC brought its first actions under the Restore Online Shoppers’ Confidence Act (ROSCA), regulating data pass and negative option features of online sales. ERA shares the apprehension of its payment processor members over Operation Choke Point, which is designed to pressure the financial industry into policing access to banking services. Similarly, there has been a renewed interest in DR business practices from state attorneys general.
While these enforcement concerns are relatively new, traditional FTC settlement activity continues unabated. A recent settlement involving a leading DR company has caused a ripple of concern throughout our community. According to the terms of the settlement, the marketer agreed to provide multiple opportunities for customers to confirm orders before placing them, clarify its ordering and return procedures, and provide monetary restitution to customers.
Commenting on the case, Electronic Retailing Self-Regulation Program (ERSP) Director Peter Marinello summed it up perfectly, stating that the settlement “provides important guidance on how all companies in the electronic retailing industry should deal with the disclosure of offer details to their customers. As tangibly demonstrated by its longtime support for the ERSP program, the [industry] has shown an outstanding commitment to treating its customers fairly and truthfully.”
This commitment is of critical importance during a time of heightened regulatory activity. We understand suppliers’ worry that regulatory efforts will have a long-lasting impact on the future vibrancy of the industry. We hear first-hand from marketers about the chilling effect of excessive regulation. By working together through the association, however, marketers and suppliers alike can make a difference in protecting the future of the industry.
To ensure a functional marketplace, we must be vigilant. A good first step is for marketers and suppliers to review ERA’s Industry Guidelines. Along with guidance from the FTC, they can serve as a benchmark that helps improve the customer experience and create a stronger, more sustainable direct response marketing ecosystem.