Privacy/Usage Issues in List Rental

Privacy/Usage Issues in List Rental

Nov. 8, 2005

By Chicca D'Agostino, president, Focus USA

Fundraisers -- or any list owner, for that matter -- who rent lists automatically assume responsibility for how those names ultimately will be used by the list renter. Unless they take precautionary measures, fundraisers could be held responsible by the FTC if the names are used in a way that is in violation of state and federal laws. A list rental agreement that stipulates the terms of list usage can be employed to provide protection. It is important for fundraisers to request a copy of the mailing piece or telemarketing script to determine that the offer is not illegal, fraudulent, deceptive, privacy invasive or pornographic. This is another precautionary step. The Direct Marketing Association's Web site contains guidelines for this purpose.

Fundraisers know that their donor files are valuable assets, and they need to make sure that they protect these assets from misuse or unpaid multiple usage. They should, therefore, monitor that their lists are being used only one time and should seed their lists to be sure that they get paid for multiple uses.

For their protection, it is strongly advised that fundraisers adopt an LRA to cover the above points. All prospective mailers should sign this LRA before names are shipped. The following points should be covered:

1. The list rented is for a one-time use, unless otherwise agreed to.

2. The list user agrees not to reproduce or otherwise duplicate any portion of the mailing list or to permit any other third party to do so.

3. The list user acknowledges that the mailing list at all times remains the sole and exclusive personal property of the list owner.

4. The list user agrees that it will use the data provided in a manner that complies with all federal, state and local laws and in accordance with the guidelines of the DMA.

5. The list owner warrants that the data provided is as accurate and complete as possible but that it cannot guarantee that it is 100 percent error free. The list owner does not guarantee mailing results.

6. The list user shall not use any of the data provided in any manner to determine a consumer's eligibility for credit, insurance or employment. (No pre-approved credit or insurance offers, for example, are permitted.)

7. While this is up to the individual organization, fundraisers should charge for cancelled orders and there should be two separate fees depending on whether the order was cancelled before being shipped or before/after the mail date. The LRA could state: "Cancellation or changed orders prior to shipment are subject to work-in-process charges. Orders cancelled after delivery but before the mail date are subject to cancellation charges (e.g., running charges on the gross and full selects). Cancellations after the mail date will be paid in full.

Chicca D'Agostino can be reached by visiting www.focus-usa-1.com.