Businesses Prepare For New Legislation
Australian Financial Review - 6 January 2004
Businesses will come under increased scrutiny over email and SMS marketing when the new spam laws come into effect on April 11.
With a raft of new requirements, including that organisations have the recipient's prior consent before sending commercial electronic messages and that all commercial emails contain unsubscribe options, companies were granted 120 days of grace to get their operations in line.
For Melbourne-based wine buff Rowan Rafferty promoting wine tours, trips to cellar doors, and bed and breakfast accommodation never used to be such hard work, but the upcoming legislation has already changed the way he does business.
Mr Rafferty, the managing director of wine-region-tours.com , makes his living operating a wine tourism portal which promotes wineries and associated businesses.
"Essentially it means that without exception we now phone anyone we are looking to advertise on our site," Mr Rafferty said.
"In some of my marketing campaigns I could collect between 20 and 30 email addresses that would be relevant and send out a single message to multiple parties. Now I have to call them all on an individual basis," he said.
"That's $10 worth of phone calls, plus the time it takes, and call-backs. What could once be done in half an hour will now take couple of days."
The IT practice group leader at law firm Corrs Chambers Westgarth , Philip Catania, said the bottom line was that any organisation using email to promote their business or offer or market their goods or services had to gain the recipient's prior consent.
"Just because you exchange business cards or see someone's email address on their website doesn't mean they have consented to receive that email," Mr Catania said.
He said there were no grandfathering provisions in the legislation to allow email addresses that were collected before the spam legislation was passed to be used without consent.
"Any email address or SMS details you have no matter when you collected them are bound by the legislation and that's a bit of trap," Mr Catania said.
However, he said the 120-day grace period between when the act gained royal assent and when it came into effect gave businesses time to confirm with everyone on their databases that they consented to receiving commercial emails.
Some businesses, such as airlines with frequent-flyer databases, would already have formal agreements in place allowing them to target customers with future offers and opportunities unless they had been told otherwise, Mr Catania said.
But those firms that don't have such clauses in customer agreements "should be emailing everyone on their databases now", he said.
An account director at public relations firm Max Australia , Fiona Martin , said as the company was part of an industry known for the mass distribution of information via email such as press releases it had been reviewing its processes for about six months.
Ms Martin pointed out, however, that the electronic distribution of press releases to the media was not considered spam because consent was inferred based on the business relationship between the company and journalists.
Ms Martin said Max Australia had already begun contacting by telephone potential recipients of distribution lists of other materials such as newsletters to obtain prior consent.
She said an unsubscribe option would gradually be added at the end of every communication distributed by the company, which would allow recipients to opt out at any time.
Mr Catania said businesses did not have to be in the practice of sending out bulk emails, as the distribution of just one unsolicited commercial message would be considered an offence under the new laws.
He also pointed out that the legislation extended to individuals as well as corporations, so the likes of tradespeople also ran the risk of non-compliance.