Kerry E-Mail Move Irks Privacy Experts

Posted March 3, 2004 at 6:27pm

Sen. John Kerry’s (D-Mass.) presidential campaign used a controversial marketing practice offered by one of the country’s three credit bureaus to collect additional information last year about people who, according to the campaign, indicated that they would like to help the candidate in the primaries and caucuses.

The contracts with Equifax Marketing Services worth about $36,000 called for the company to find so-called “appendages” in its massive consumer database. Appending is a practice that involves plugging bits of information into databases in order to collect e-mail addresses or flesh out consumer profiles.

The practice has been widely attacked by consumer advocates, who consider it invasive.

Kerry spokesman Michael Meehan said the campaign sought only the e-mail addresses of backers who had neglected to provide them, and that the information was to be used in voter contact efforts. He said the campaign has discontinued the service because the results were not worth the cost.

“We were unsatisfied with the service we were receiving,” Meehan said. “We have since ended the relationship.”

Marketing experts believe Kerry’s campaign is the first political committee to make use of the append, a relatively recent innovation that has emerged as retail commerce has increasingly moved online.

The practice enables telemarketers and direct mailers to reach people who have become far less reliant on “snail mail” and “bricks-and-mortar” businesses.

In the age of e-commerce, consumer e-mail addresses alone are a valuable commodity, in part because some individuals use online accounts precisely to keep their behavior and dealings secret.

Privacy advocates argue that appends enable businesses and others who use them to pry open the lives of consumers by mining their backgrounds for useful data.

“It’s one of the more obnoxious practices,” said Chris Hoofnagle of the Electronic Privacy Information Center. “You give them any information at all and they can find out everything about you.”

Equifax sells one service, called a “reverse e-mail append,” that can add information to a consumer’s profile using only his or her e-mail address. Hypothetically, at least, a Democratic presidential candidate might use a customized append to figure out who on a given list would be a good target for fundraising solicitations — or, perhaps, negative information about a rival.

Industry guidelines aimed at reducing the potential for mischief require that marketers tell a consumer that they have appended his or her e-mail address and ask for permission to contact the person online.

Even companies that intend to reach previous customers need to ask permission before switching to e-mail for their communications.

“You give them notice, then you give them a chance to opt out of that relationship,” said Lou Mastria, a spokesman for the Direct Marketing Association Inc. If it’s a new contact, “That’s got to be the first e-mail you give them.”

In fact, the amount of information provided to the Kerry campaign by Equifax remains unclear. Both the company and the campaign declined to make details of the contracts available.

The company’s Web site says that an e-mail append or reverse append offered by the company “can add a vast amount of information to your database records,” including “dwelling type, lifestyles, interests and much more.”

An overview of these types of “selects,” as they are called, indicates that Equifax’s database can yield information about who reads mystery books, or has grandchildren, or has an abiding interest in “moneymaking opportunities.” The company also advertises a range of personal finance selects, including the extent of a consumer’s investments in real estate, stocks, bonds and mutual funds.

A spokesman for Equifax said the company takes “extreme measures” to protect consumer credit information, which by law can be shared only with companies that are offering credit or other financial products.

“There’s a regulated side of the business and an unregulated side of the business,” said David Rubinger, a spokesman for Equifax Inc. “Never do the two meet up.”

Much of the data that is collected by Equifax and similar database providers is known as “permission-based” material. That means that it has been collected from warranty cards or other surveys — on the Internet it may mean checking or unchecking a box — that consumers return to businesses in return for benefits, such as free customer service or notice of special offers.

These contracts typically give businesses permission to sell a customer’s information to third parties, such as database providers.

According to reports filed with the Federal Election Commission, the Kerry campaign first hired Equifax Marketing Services in July 2003, paying the company roughly $5,400. Subsequent fees totaling about $30,800 were paid to Equifax by the Kerry campaign in September and November.

The payments were reported to the FEC as “list rental,” though both the company and the campaign confirmed that the committee in fact sought appends from Equifax.

An append differs from typical list processing in that it seeks out information that individuals may not have intended to provide. Campaign lists are usually compiled using basic criteria — such as party affiliation or past giving — that individuals have agreed to provide or that can be collected from public records.

The Republican National Committee, for instance, has used Equifax rival Experian Inc. this cycle to collect names, addresses and phone numbers for self-identified Republicans.

Some Members of Congress, such as Reps. Martin Frost (D-Texas), Ray LaHood (R-Ill.) and David Obey (D-Wis.), have in the past paid credit bureaus to provide their campaigns with various directories. Credit bureaus tend to keep the most accurate and up-to-date records on where people live and how to reach them.

Citing the $36,000 price tag, experts in direct marketing expressed strong skepticism that the Kerry campaign limited its contract with Equifax to e-mail addresses.

Hoofnagle, for instance, noted that smokers are among the most coveted consumers for direct-mail marketers, and information about where to find them typically costs companies anywhere from $120 to $150 per thousand names.

If the Kerry campaign had paid Equifax the latter rate, it would have to have found 240,000 e-mail addresses — and that’s just from “volunteers” who had neglected to provide them.

To be sure, the campaign’s contract is likely to have differed considerably from one that paid a specified amount per thousand. But Hoofnagle said the price still would appear somewhat exorbitant for simple e-mail appends.

“How many volunteers did [the Kerry campaign] have?” Hoofnagle asked.

Meehan, from the Kerry campaign, refused to provide any detail about how the contracts were structured, suggesting only that the cost was minimal in a $31 million campaign.

In the Senate, Kerry played a significant role in establishing rules to protect consumer privacy on the Internet.

As Massachusetts emerged in the late 1990s as a vital center of the high-tech boom, Kerry sought to put guidelines in place that would enable businesses to collect valuable data from their customers, but at the same time give ordinary consumers assurance that online commerce was safe.

He signed on as an original co-sponsor of online privacy legislation authored during that period by Sen. John McCain (R-Ariz.), chairman of the Commerce, Science and Transportation Committee.

“I believe this issue is complex, it’s difficult, and yet we have to start addressing it,” Kerry said at a Senate hearing in 2000.

“People deserve to know what information may be collected and how it will be used,” he added, “so they can make an informed decision before they begin to navigate around or shop on a particular Web site.”