The Direct Marketing Assn. will require all of its members doing business in the United States to disclose to consumers when they are sharing their private information with other marketers.
The new policy, to be announced today, is intended to prevent unwanted mail or phone solicitations from reaching consumers and to protect consumers' privacy.
The trade group's members that deal with U.S. consumers--which include 2,600 Internet companies, catalogs, banks, financial institutions, publishers, manufacturers, nonprofit organizations and books and music clubs--will be required to adhere to the new privacy practices immediately.
"We believe the time is now to step forward and assure consumers that information in marketers' hands is used responsibly, in beneficial ways, and with respect for individual choice," said H. Robert Wientzen, president and chief executive of the New York-based DMA.
Direct marketing is big business in the United States, with sales exceeding $1.3 trillion in 1998, according to a study for the DMA by research firm WEFA Group.
But direct marketers have been criticized in the past for sharing private consumer information to build their customer base.
That means that if you donate money to a charity, you could end up with a pitch from a music club or a solicitation from a credit card firm--without having requested any information from either.
Under the new policy, companies will be required to disclose to customers when information about them--such as their names and addresses--may be shared with other marketers.
They also must tell consumers that they have the option to not have their information shared.
Companies must also honor any individual's request to not receive solicitations, and they must use the DMA's two national name-removal services--which track the names of people who don't want solicitations by mail or by phone.
Commerce Secretary Bill Daley lauded the new regulations, saying they are "critical to building consumer confidence in the electronic marketplace by assuring that personal information will be handled fairly and responsibly."
The DMA will monitor companies by using secret shoppers, decoys, consumer complaints and visits to DMA member Web sites.
Those not adhering to the new policies will risk public expulsion from the DMA.
According to the DMA, less than 1% of its members have refused to endorse the new policies, but the group declined to name any specific companies.