The
CAP Code
This guide is based on UK law. It was last updated
in August 2005.
Introduction
Marketing by email has become a key channel of communication for
many businesses across the UK. However the level of government and
industry regulation has greatly increased in recent years in this
area creating what many businesses now regard as an overly complex
patchwork of rules and standards.
This is intended to set out the basic rules in this area and
suggest a number of practical compliance measures.
The Rules
The law in this area is primarily made up of the following
pieces of legislation and standards:
- The Data Protection Act 1998;
- The Privacy and Electronic Communications (EC Directive)
Regulations 2003 ("the Regulations"); and
- The British Code of Advertising, Sales Promotion and Direct
Marketing (otherwise known as the CAP Code).
The CAP Code
Marketers need to remember that they will already be subject to
the British Code of Advertising, Sales Promotion and Direct
Marketing (otherwise known as the CAP Code), administered by the
Advertising Standards Authority (ASA).
The 11th Edition of the CAP Code was issued in March 2003 and
this edition contained strict new provisions on direct marketing by
email and SMS. The CAP Code is topical as the ASA has recently
issued a number of adjudication rulings on the new provisions and
the Code has recently been updated to bring it into line with the
regulations and the guidance from the Information Commissioner.
What is the CAP Code?
The provisions of the CAP Code comprise the rule book for
non-broadcast advertisements, sales promotions and direct marketing
communications. They relate to, for example, advertisements in
newspapers, leaflets, mailings, emails, text transmissions, fax
transmissions, other electronic and printed material and marketing
databases containing consumers' personal information.
It is not statutory but it is not without teeth. First, anyone
can complain to the ASA about non-compliance and the ASA can
adjudicate a decision as demonstrated by The Training Guild
case (see below) this can provide a relatively quick and easy
method for a consumer to complain. These decisions are made
publicly available on ASA's website, newspapers, TV and
radio, leading to adverse publicity for the organisation
involved.
Second, media and industry organisations that subscribe to the
CAP Code can refuse advertising space to anyone who breaks the
Code. An Ad Alert is sent out to members who can then deny space
until the organisation complies. Such media and industry
organisations can also remove incentives or concessions associated
with membership of their body. As a last resort the ASA can refer
an organisation to the Director General of Fair Trading at the OFT
under the Control of Misleading Advertisements Regulations
1988.
The Training Guild case
The ASA issued a ruling on 10 September 2003 in response to a
complaint against The Training Guild. The Training Guild sent an
email advertising training seminars which, in the subject field,
said "Business Seminars – Telesales & Selling Skills Made
Easy". The headline in the content read "The Training Guild
Business Training Seminar" and went on to say "Tele-Sales &
Selling Skills ...MADE EASY...At last a selling skills course for
non-aggressive sales people...The most successful sales course in
the UK ...More than 650 companies have attended...".
The complaint was in respect of various sections in the Code.
Section 22.1 requires marketing communications to be designed and
presented in such a way that it is clear that they are marketing
communications. In relation to unsolicited email marketing
communications, these should be clearly identifiable as marketing
communications without the need to open them.
Section 43.4 requires the explicit consent of consumers before
marketing by email or SMS with the proviso that marketers may
market their similar products to existing customers without
explicit consent so long as an opportunity to object to further
such marketing is given on each occasion.
In relation to the first issue, the adjudication found that by
including "Business Seminars – Telesales & Selling Skills made
Easy" in the subject field, this was sufficiently clear that it was
a marketing communication.
On the second issue the complaint was upheld. The ASA found that
the advertisers had not got the explicit consent of the individual
and that it was their responsibility to do so. This applied even
where, in this case, they had bought in lists in good faith
believing that the people on the list were people in businesses
that had opted in to receive information about business development
topics.
Ultimately the ASA was lenient in its punishment and advised the
advertisers to take more care in their targeting of emails in the
future, but said sanctions would follow if they did not.
There have been other similar cases since September 2003, with
cases being decided at the rate of about 10 a week.
What does this mean?
It is helpful for marketers that the ruling found that the
subject field made it clear that this was a marketing
communication. The Regulations do not go so far as to regulate the
content of the subject field but the E-Commerce Regulations 2002
arguably do. These state that unsolicited commercial email
marketing communications must be clearly and unambiguously
identifiable as such as soon as they are received.
UK marketers are now somewhere between those in jurisdictions
such as Spain where such communications must be marked "publi" or
California where they should be marked "ADV" and jurisdictions
where there is no regulation and spammers can happily bombard
inboxes with subject fields such as "fancy a drink?" or "remember
me?".
The second point reinforces the fact that marketers must take
care when sending unsolicited commercial email. If they have
collected the information themselves then, unless they can say that
the communication is not unsolicited, they will need prior consent
or to bring themselves within the existing customer relationship
provisions which are similar under the Code and the Regulations. If
buying in lists they will need a warranty and indemnity from the
provider that those on the list have opted in to receiving third
party electronic marketing communications, although this will not
give them any protection under the Code or the Regulations if the
lists are not 'clean'.
Although under the Regulations the unsolicited email marketing
provisions only apply to individual subscribers, under the CAP Code
a consumer is defined as anyone who is likely to see a given
marketing communication, whether in the course of business or not
which potentially could cover Business to Business (B2B) marketing.
However, the recent changes to the Code make it clear that the
requirement for consent does not apply to marketing business
products to corporate subscribers including their named employees
although it will apply when marketing non-business products to
named employees of corporate subscribers.
In any event, the CAP Code may leave many marketers with
permission-based marketing as their only option.
Contact:Louise Townsend or Rosemary Jay (Manchester, 0161 250 0100)
