Everything You Need to Know About Marketing to Lead Lists in 2020

November 06, 2020

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Marketers have been buying lead lists for decades but, as more companies adopt digital strategies, new laws and regulations around customer data have started to shift conversations around “best practices.” If the last few years have taught us anything, it’s that businesses need to take data privacy seriously to stay ahead. 

It wasn’t too long ago that businesses could buy a bulk of email addresses and market to them without much oversight. This may have been an effective strategy 25 years ago, but things have changed — lawmakers are cracking down on businesses that try to cut corners in their marketing. 

While buying email lists isn’t technically illegal, the FTC has outright discouraged this practice for years. The CAN-SPAM Act of 2003 introduced several regulations to prevent spam, some of the most important being how businesses acquire and contact their online leads.


Buying Email Lists Can be a Major Risk

For example, it is illegal for businesses to contact customers who have previously unsubscribed or have had their information “scraped” from an online source. While this may seem easy to manage, purchased email lists are nearly impossible to vet because they often contain thousands of contacts. 

In a Q&A on CAN-SPAM regulations, FTC Attorney Christopher Brown warns, “There is the possibility that addresses on the list belong to people who have already opted out of receiving email from your company. And there’s a risk that the list was put together using illegal means like address harvesting or dictionary attacks.” 


Penalties Fall on Businesses, Not List Brokers

Here’s what businesses need to understand when it comes to CAN-SPAM and data privacy: If you send a bulk email violating CAN-SPAM regulations, your business is liable—the list provider or reseller isn’t responsible for any fines or penalties if they weren’t the ones who contacted the customer list. 

Similar liabilities apply even if you hire another company to manage your email marketing. So, while you may have very little hands-on involvement in your business’ email marketing, the FTC has decided “you can’t contract away your legal responsibility to comply with the law.”

So, is it worth the risk?

Although you may not have even realized the list you bought contains illegally sourced consumer data, your business can face hefty penalties and fines up to $40,000. 


Stricter Data Privacy Laws at the State Level

Federal regulation only covers so much, which is why we’re starting to see more legislation at the state level. The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020. It not only expands on the CAN-SPAM Act but seeks to give more power to consumers over the types of information collected about them. 

Other states have since followed California’s lead by introducing consumer privacy laws of their own. Both Nevada and Maine have enacted statewide consumer privacy laws, but their approach is not considered as robust as the CCPA. New York, Maryland, Hawaii, Massachusetts, and North Dakota have all proposed their own legislation using the CCPA as a framework.  


Staying Ahead with Traditional Marketing Strategies

As online channels become harder to navigate, many marketers are returning to traditional strategies. Direct mail has had consistently higher response rates than digital campaigns for years, even among millennial audiences. 

Direct mail is not as heavily regulated as other marketing mediums. Part of the reason for this is that digital advertising will often record and store a breadth of information about a customer such as geolocation, device, browser, and even IP address. Direct mail marketing, like catalogs and postcards, has fewer options for tracking a recipient’s behavior and engagement. 


Understanding Regulations on Direct Mail

However, it’s important to keep in mind the handful of regulations that do currently exist for direct mail, especially if you’re planning to buy a customer leads list. The value of high-quality data cannot be overstated when it comes to consumer information. This is because the majority of laws regarding direct mail are not about the mail itself, but about the consumers who receive it--more specifically about how you found those consumers. 

Under the Drivers Privacy Protection Act, it is illegal to use information from the DMV for direct marketing. Another example is the Health Insurance Portability and Accountability Act (HIPAA). Although many people might be familiar with how this protects their medical information, HIPAA is also meant to ensure complete patient confidentiality—including restrictions on marketing tactics

There are other factors to consider, like whether a consumer has requested to stop receiving commercial mail. The FTC has two options letting consumers “opt-out” of credit and insurance offers by mail and the Direct Marketing Association manages the national “Do Not Mail” list. 


Getting Started with Compliant Marketing Practices

Here’s the bottom line: Now is a great time to incorporate direct mail into your marketing plans, but your marketing leads need to come from reliable sources. People are increasingly concerned with how their data is used and shared and businesses that fail to earn or keep the trust of their customers may pay a big price.


Start building your direct mail campaign today with FMAdata’s pre-mover lead lists. Our data is updated daily and sourced from verified public sources to ensure businesses stay fully compliant when marketing to potential customers.

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