REGULATION WATCH; AUSTRALIA CREATES CODES;DIRECT MARKETING INDUSTRY'S GUIDELINE IS MODEL

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A voluntary code of ethics is not much use when all you're doing is regulating the good guys, said Rob Edwards, executive director of the Australian Direct Marketing Association.

That is why the ADMA has been working closely with federal and state consumer affairs ministers to formulate a legally enforceable national code of practice for the Australian direct marketing industry, modeled on the ADMA's present voluntary codes. Those codes, in turn, are guided by codes developed in 1984 by the countries in the Organisation for Economic Cooperation and Development.

The industry regards the Australian model as a world first, which is also why Mr. Edwards spoke last week at the Direct Marketing Association conference in Dallas, explaining to world delegates how the new regulations will affect how marketers do business.

"The entry cost to direct marketing is very low," he said. "People can start doing things like telemarketing from home-and most of them wouldn't know of the ADMA's existence, let alone have a clue about any code of practice. The notion that we have the ability to self-regulate our industry is on pretty shaky ground."

Key points of the proposed new code include the right to prevent personal information from use in direct marketing; allowing consumers access to personal information held on mailing lists and the right to remove information; restricting telemarketers' calling hours; requiring them to identify themselves; and giving customers "cooling-off periods," allowing them to halt a purchase.

"The issue of privacy and access to databases is hotly debated worldwide, and we've tried to be a little pre-emptive and put together a regulatory regime that we are happy with-not one foisted upon us," Mr. Edwards said.

"We've been working with the Federal Bureau of Consumer Affairs and the Trade Practices Commission primarily, as well as the attorney general's department," he added. "It will probably be 12 months before we get a draft code."

"We need to draw upon a lot of sectors to pull the draft code together-the financial services sector, for instance, has to be consulted, along with fund-raisers, mail order traders and a whole range of other people." Mr. Edwards cited telemarketers, who will need a separate code.

"We're talking about co-regulation, which involves a mechanism in the Fair Trading Act in each state to ensure that industry codes of conduct will apply to everyone in Australia engaged in direct marketing."

Mr. Edwards said he persuaded government that there is no sense in writing hard law, enshrined in legislation, around direct marketing. "It's technology-driven, and as technology changes, so do the practices and techniques. We should have a code that we can change easily as the technologies, and therefore the techniques and practices, change.

"It's not something DMers should be afraid of," he said. "It's all part of the maturing of the industry. If we are going to try to be self- or co-regulating, we have to give up something, which means our codes must be open to scrutiny."

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