DMA suspends ‘triple whammy’ firm

DMA signs shirt sponsorship deal (2)The DMA has suspended member company Phruit after a triple whammy of DMA code breaches, following hundreds of complaints about the cold-calling and data capture techniques employed by the business.
The move follows an investigation by the Direct Marketing Commission (DMC) – the body that polices disputes between the trade body and its members – which concluded that Phruit had, among other things, been misrepresenting itself as a researcher when making calls that were really designed to sell goods or services, so-called “sugging”.
The investigation was originally triggered by an individual consumer complaint in August 2010 over Phruit’s cold-call marketing. This, in turn generated subsequent complaints when UK firms used Phruit data and found that many of the contacts had in fact signed up to the Telephone Preference Service. A post on www.a4uleads.com warned other businesses to steer clear, branding the company “a disaster”.
The DMC examined over 100 TPS complaints and hundreds more Web-based complaints and comments about Phruit and the activities of third party businesses making sales calls based on contact data provided by Phruit. This exercise included the activities of Phruit’s subsidiary and sub-contractors in the Philippines.
Based on the evidence presented – including a number of admissions by the company – the DMC concluded that Phruit was in breach of three provisions of the (Third Edition) DM Code of Practice: 21.18 and 21.20 on TPS compliance and data cleansing; 3.11 under which Phruit has a responsibility for compliance by suppliers; and 3.18 on “sugging”: marketing carried out in the guise of research.
Due to the serious nature of the breaches, the DMC made a formal recommendation to the DMA Board that Phruit be suspended from membership for one year, following which time it could be reconsidered for membership should the DMA Compliance Team be satisfied that it is are operating compliantly.
The DMA Board subsequently decided to accept that recommendation and enforce the available sanction of suspending Phruit from its membership.
Phruit advised in December 2010 that it did not wish to renew its membership of the association for the 2011-12 subscription period. As such, the suspension of its membership will now apply to the remainder of its time as a member of the association, which runs until June 2011. Given the nature of the investigation into Phruit’s activities, the DMC has also shared its findings with the Data Protection regulator, the Information Commissioner’s Office (ICO).
Scott Logie, chair of the Direct Marketing Association, said: “Membership of the DMA is a clear indicator of a company operating to the highest standards, standing for professionalism and trustworthiness. Our code of practice is the cornerstone in our efforts to build and maintain political, commercial and consumer faith in direct marketing. Therefore, any company that fails to operate within these standards brings both the association and the industry as a whole into disrepute. It is for this reason that we have no choice but to suspend Phruit from membership.”
George Kidd, chair of the DMC, added: “It’s vital that we uphold the high professional standards that define the direct marketing industry. Our recommendation to the DMA to suspend Phruit from membership clearly illustrates the seriousness of failure to comply with the DMA Code and reinforces the importance of responsible business practice.”
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