Buy second-hand data carefully

Q: We are thinking about buying a customer list from another company. What can we use the data for?

A: What you can use the data for will depend on what individuals were told their data would be used for at the point at which it was collected. If the company from which you are buying the list did not give these individuals an indication of what their data would be used for then any use of their data should be within their reasonable expectations.

The question to ask therefore is whether an individual who provides their personal information to a company that markets clothing products, for example, would expect that data to be passed on to a third-party company that markets insurance products and services.

Unless the company which collected the data in the first place told individuals that their data may be shared with other third-party companies that may send them information about products and services, the answer is likely to be no, because third-party use is likely to go beyond what these individuals would reasonably expect their data to be used for.

If you want to use the data to send marketing to those individuals by email or SMS rather than post, you will need to have the individuals' prior consent. Again, you will need to think about what individuals have been told, if anything, in respect of how they will be contacted.

It is therefore vital that you think about what you want to use the data for before purchasing the list and to seek assurances about the basis on which the data was collected before you start using it.

Q: What other things do we need to think about when buying marketing lists?

A: When buying-in marketing lists you should ensure that you get some contractual protection, in the form of a warranty, as to what the data may be used for, together with an indemnity for any loss suffered by you as a result of your use of the data.

Basically you are in effect relying on what the company selling the list tells you about how it originally gave information to individuals regarding the future use of their personal data.

However, this does not replace the need to carry out proper due diligence, such as asking to see the notices. This is less necessary when using a reputable list provider such as Dun & Bradstreet or Experian.

If you buy a marketing list from an insolvent company you should still ensure that you obtain contractual protection, although the company is less likely to be able to meet any contractual claims which you may have in the future in respect of the data.

In these circumstances, carrying out proper due diligence prior to the purchase will be even more important to ensure that you can use the data for your own specific purposes.

- Victoria Southern is a solicitor at law firm Pinsent Masons. This column is not intended to constitute legal advice. For specific advice you should contact a solicitor.

- For more of your legal questions answered go to: www.brandrepublic.com/marketingdirect.