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Submission by the

Office of the Privacy Commissioner

September 2006

Office of the Privacy Commissioner

The Office of the Privacy Commissioner (the Office) is an independent statutory body responsible for promoting an Australian culture that respects privacy. The Privacy Act 1988 (the Privacy Act) covers federal and ACT Government agencies, businesses with an annual turnover of more than $3 million, the private health sector, small businesses that trade in personal information, credit providers and credit reporting agencies. The Privacy Commissioner has responsibilities under the Privacy Act and other federal legislation to regulate the way agencies and organisations collect, use, store and disclose individuals’ personal information.

Background and Discussion Paper

The Office welcomes the opportunity to make a submission on the Industry Standard for the Making of Telemarketing Calls Discussion Paper (the Discussion Paper). The Office understands that the Discussion Paper was prepared by the Australian Communications and Media Authority (ACMA) to invite comment on the central issues to be addressed by the telemarketing industry standard which ACMA is required to develop under section 125A of the Telecommunications Act 1997 (Telecommunications Act) before the commencement of Part 2 of the Do Not Call Register Act 2006 (DNCR Act). In this submission, the Office has considered the issues which the ACMA industry standard must deal with, as required by section 125A of the Telecommunications Act and summarised in the Discussion Paper.

In this Office’s report Getting in on the Act: The Review of the Private Sector Provisions of the Privacy Act 1988 (the OPC Review), which was released on 18 May 2005, the Privacy Commissioner recommended that the Australian Government consider exploring options for establishing a national ‘Do Not Contact' register[1]. The Office subsequently made a submission to the Introduction of a Do Not Call Register: Possible Australian Model Discussion Paper[2] (DNCR Discussion Paper) released by the Department of Communications, Information Technology and the Arts (DCITA) in December 2005 and to the Inquiry into the provisions of the Do Not Call Register Bill 2006 and the Do Not Call Register (Consequential Amendments) Bill 2006[3] in June 2006.

The comments in this submission to ACMA regarding an industry standard for the making of telemarketing calls, as with the submissions to DCITA, are provided with the intention of contributing to the long-term effectiveness of the Do Not Call Register established by the DNCR Act.

Privacy Act coverage

The private sector provisions of the Privacy Act apply to organisations (including not-for-profits) with an annual turnover of more than $3 million and, in particular circumstances, some small businesses with an annual turnover of $3 million or less.

The private sector provisions of the Privacy Act centre around 10 National Privacy Principles (the NPPs) that set out how private sector organisations should collect, use, keep secure and disclose personal information.

The Office notes that the private sector provisions of the Privacy Act will continue to operate alongside the provisions of the DNCR Act and the ACMA industry standard for the making of telemarketing calls, once it is established. This means that organisations bound by the Privacy Act must continue to comply with that Act, as well as the ACMA industry standard when making, or causing telemarketing calls to be made. The application of the Privacy Act to telemarketing is summarised below.

Application of the Privacy Act to telemarketing

The NPPs apply to direct marketing and include specific direct marketing provisions. However, the application of the specific direct marketing provisions is limited. The use or disclosure of personal information for direct marketing is covered by NPP 2.1. This principle distinguishes between the primary purposes of collecting personal information and any secondary purposes, and limits the use and disclosure of information for a purpose other than the primary purpose of collection.

Under the NPPs, an organisation that collects information for the primary purpose of direct marketing can generally use and disclose it for that purpose. Similarly, NPP 2.1(a) permits personal information to be used or disclosed for direct marketing if such an activity is related to the purpose for which the information was collected (directly related in the case of sensitive information) and the person from whom it was collected would reasonably expect the organisation that collected the personal information to use or disclose it for direct marketing.

In some circumstances an organisation can use an individual’s personal information for direct marketing even if direct marketing was not the primary purpose of collection and direct marketing is unrelated to the purpose of collection and not within the reasonable expectations of the individual. The organisation may use the information if:

• the person from whom the information was collected has consented to the use or disclosure of the information for direct marketing (NPP 2.1(b) or
• if the information is not sensitive information and the use of the information is for the secondary purpose of direct marketing, and
  • it is impracticable to get consent before using the information
  • the direct marketing organisation gives the individual the opportunity to opt-out of receiving material at no cost
  • the individual has not already asked the organisation not to send material
  • in every communication the organisation draws the individual's attention to the fact, or prominently display a notice, that he or she may opt-out of receiving further material and
  • each communication includes the relevant contact details of the organisation, including electronic contact details if the material was sent by electronic means.

NPP2.1(c)(i)-(v).

In general it is possible that many of the telemarketing phone calls that individuals receive may either comply with NPP 2.1 or are made by companies that are not required to comply.

Other industry standards for telemarketing

Section 112 (1B) of the Telecommunications Act states that bodies or associations that ACMA believes represent sections of the telemarketing industry should develop industry codes that apply to participants of that section of the industry. The Discussion Paper refers to provisions set out in the Australian Direct Marketing Association (ADMA) Direct Marketing Code of Practice (the ADMA Code) in relation to each of the four issues to be considered for the development of a telemarketing standard. In addition to the four issues included in the Discussion Paper, section D of the ADMA Code also sets out a number of other requirements for its members to comply with in relation the making of telemarketing calls.

This Office believes it would be helpful to consumers and industry participants for the interaction between the ADMA Code and the ACMA industry standard to be clearly described in the standard. For example, the question of whether the current ADMA Code of Practice will be superseded by the ACMA industry standard or whether both will continue to operate in parallel should be addressed.

Principles for guiding the development of the standard

The OPC believes that the principles included in the Discussion Paper are all relevant to helping guide the development of an industry standard that achieves the intentions outlined on page 2 of the Discussion Paper.

In the case of the principle which states that the standard should:

“assist in arresting the level of dissatisfaction within the community about telemarketing activities (including privacy concerns)”

this Office would suggest a more specific approach for the industry standard to follow in relation to community concerns about privacy.

One approach would be to replace this principle with the following two principles:

assist in arresting the level of dissatisfaction within the community about telemarketing activities

assist in protecting the personal information of individuals by ensuring telemarketers understand their obligations including under relevant legislation such as the Privacy Act.

Issues to be considered for the development of the telemarketing standard

Time at which telemarketers can contact consumers

In acknowledging that with the commencement of the Do Not Call Register consumers will have an additional mechanism available to them to reduce the number of marketing calls they receive, the Office supports adoption of calling hours that are consistent with current community expectations.

The ADMA Code permits calling between the hours 9am and 8pm on Monday to Saturday, with no calls allowed on Sundays and prescribed public holidays. It is our understanding that 80% of the direct marketing calls that are currently made nationally, conform to these calling hours.

These calling hours are inconsistent with the calling hours prescribed in the Corporations Act 2001 (Corporations Act) for the telemarketing of financial services and those included in the Ministerial Council on Consumer Affairs (MCCA), Direct Marketing a Model Code of Practice (the MCCA Code), both of which provide for calls to be made between 8am to 9pm Monday to Saturday with no calls allowed on Sundays and certain prescribed holidays. However, the Office considers that the call times in the ADMA Code appear to reflect current industry practice for the majority of telemarketing calls made and therefore may also reflect current community expectations. They also provide for a shorter contact period then do the Corporations Act and the MCCA Code.

Provision of contact information

This Office supports the adoption of provisions identical to those currently provided by the ADMA Code of Practice as this approach is consistent with organisations’ obligations under NPP 1.3(a) in the Privacy Act which requires that organisations collecting personal information take reasonable steps to ensure that the individual is aware of the identity of the organisation and how to contact it.

The Office suggests that additionally, the ACMA industry standard include the requirement that where a telemarketer collects personal information in the course of the telemarketing call, that information consistent with the requirements of NPP1.3(b)-(f) is given about the telemarketer or the person who caused the call to be made.

The office believes that, given the nature of telemarketing calls, where individuals may be asked to provide personal information, it is in the best interest of consumers that they understand their rights and the rights and obligations of the telemarketer contacting them in relation to the provisions of the Privacy Act.

Furthermore, the Office believes that requiring telemarketers or those making telemarketing calls to provide information about the call in relation to NPP 1.3 when collecting information may assist in reducing the level of dissatisfaction within the community about telemarketing activities by providing consumers with information they need to make choices about protecting their personal information.

This approach is also consistent with the current requirements in ADMA’s Code. The Office understands that the principles of this Code, including its privacy provisions, will form ADMA’s Code of Practice once the ACMA Code is registered. It is our view that inserting privacy obligations the Industry Standard may ensure consistent standards exist across the telemarketing industry.

Termination of telemarketing calls

This Office supports adoption of the current provisions in the ADMA Code of Practice and the MCCA Code referred to in the Discussion Paper.

The provisions in the ADMA Code of Practice are currently in use nationally by ADMA’s membership and provide a template for national consistency.

Calling line identification

This office supports the adoption of the ADMA Code of Conduct requirements for calling line identification requirements of the ACMA industry standard. As well as the requirement not block the transmission of the calling line identity when making an outbound telemarketing call, the Office believes that telemarketers should, when technically feasible, ensure the number which is transmitted or displayed on receiver terminals is a telephone number which is suitable for return telephone contact.

The Office notes that the requirement to provide a number which is suitable for return telephone contact, when technically feasible, is also in keeping with the principles for guiding the development of the standard. The provision will enable public interest considerations to be addressed by ensuring that where possible consumers will be able to verify the identity of telemarketing callers by having access to contact details from a second source (the first being information provided by the telemarketer). This becomes especially important for consumers where there is concern about the legitimacy of the telemarketing call, dissatisfaction about being included in the telemarketing campaign or general concern about the protection of their information. It is considered that the added transparency for consumers will be beneficial in establishing the valid role that telemarketing may fulfil.

The current provisions in the ADMA Code of Practice are currently in use nationally by ADMA’s membership and thus provide a template for national consistency.

Summary of Key Recommendations

1. The Office suggest a more specific approach for the industry standard to follow in relation to community concerns about privacy and suggests that the following two principles replace the single principle dealing with community dissatisfaction about telemarketing activities and privacy concerns:
   • assist in arresting the level of dissatisfaction within the community about telemarketing activities
   • assist in protecting the personal information of individuals by ensuring telemarketers understand their obligations including under relevant legislation such as the Privacy Act.
2. The Office supports the adoption of the telemarketing calling times set out in the ADMA Code while acknowledging that consumers will have an additional mechanism available to them to reduce the number of marketing calls they receive with the commencement of the Do Not Call Register. .
3. The Office suggests that the ACMA industry standard require telemarketers to provide information about the telemarketing call that is consistent with organisations’ obligations under NPP 1.3(a) of the Privacy Act. Additionally, where a telemarketer collects personal information in the course of the telemarketing call, the provisions should require the telemarketer to provide information about the call that is consistent with the requirements of NPP1.3(b)-(f).
4. This Office supports the adoption into the ACMA industry standard of the current provisions in the ADMA Code of Practice and the MCCA Code in relation to requirements for call termination.
5. This office supports the adoption of the ADMA Code of Conduct requirements as the calling line identification requirements to be used for the ACMA industry standard.