New law requires switch from opt-out to opt-in
Beginning in June, marketers’ access to information compiled by state departments of motor vehicles (DMVs) will likely be seriously restricted. According to a provision within the transportation appropriations bill, signed into law by President Clinton on Oct. 13, DMVs will have to get written permission from licensees before selling their names. States that don’t implement an opt-in system by June 1 face the loss of Department of Transportation funding.
Currently the Driver’s Privacy Protection Act (DPPA), enacted in 1994, requires DMVs to allow motorists to opt out of lists provided to marketers. (The Supreme Court is considering a challenge to the DPPA, however; see “DPPA challenged,” below right.) The DPPA didn’t drastically deplete the pool of records available to marketers, but the amendment to the appropriations bill, proposed by Sen. Richard Shelby (R-AL), is expected to all but eliminate this source of names.
Direct Marketing Association spokesman Stephen Altobelli calls the legislation damaging to direct marketers, since mailers and database companies have traditionally used the information in DMV records – widely considered more accurate than other sources – to correct existing lists.
Altobelli also considers the legislation unnecessary. “Opt-out addresses consumer privacy concerns. If [motorists] care, there’s action they can take. But opt-in restricts access to public information that legitimate marketers can use for legitimate purposes.” Moreover, the Shelby amendment could have more far-reaching implications, he says. “These records have been public information since the creation of DMVs. Is it in the public’s best interest to have the government in the business of restricting information? No.” The DMA is working with other organizations to lobby for the legislation’s repeal.
Auto books will feel the loss
Catalogers that sell auto supplies to consumers stand to suffer the most from the new legislation. According to Dave Wason, president of Bavarian Autosport, a Portsmouth, NH-based catalog of BMW accessories, the loss of the DMV names will probably hurt the $10 million-$15 million mailer. “We like the current opt-in system. An opt-out system will have a dramatic effect on the number of available names,” he says.
Chris Nowak, president of Woodland, CO-based German auto parts mailer Rocky Mountain Motorworks, agrees. The cataloger has used DMV records in the past to identify owners of specific vehicle models. “We get catalog requests online, and there are Websites we can go to for lists, but it’s different information, and we won’t be able to select as deeply as we have.”
At press time, the Supreme Court was to consider a 1998 challenge launched by Oklahoma, South Carolina, and Wisconsin to the Driver’s Privacy Protection Act (DPPA). The DMA’s Stephen Altobelli expected a decision by mid-November. At issue was whether the federal government was within its rights to legislate state DMV information in the first place. Although Altobelli wouldn’t speculate, and Sen. Richard Shelby’s office could not be reached for comment, a ruling in favor of the states could nullify the federal government’s recent enactment of Shelby’s amendment to the transportation appropriations bill requiring DMVs to adopt opt-in systems before marketing their lists.