Administrative Interpretations, General Policy Statements, and Enforcement Policy Statements, Secret Coding in Marketing Research
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[6750-01] Title 16— Commercial Practices CHAPTER I— FEDERAL TRADE COMMISSION PART 14— ADMINISTRATIVE INTER PRETATIONS, GENERAL POLICY STATEMENTS, AND ENFORCEMENT POLICY STATEMENTS Secret Coding in Marketing Research AGENCY: Federal Trade Commission. ACTION: Enforcement policy state ment.
SUM M ARY: The Commission is stat ing its intention to take appropriate enforcement action against those who use secret coding in marketing re search, should it discover the practice to be continuing in the future, and in the event that it may be causing sub stantial consumer injury. This state ment is intended to provide guidance to the marketing research industry. EFFECTIVE DATE: September 21, 1978.
FO R FU RTH ER IN FO R M ATIO N CONTACT:
Robert L. Barton, Jr., Attorney, Di vision of Advertising Practices, FEDERAL REGISTER, VOL. 43, NO. 184— THURSDAY, SEPTEMBER 21, 1978
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42742 Bureau of Consumer Protection, Federal Trade Commission, Wash ington, D.C. 20580, 202-724-1499. SUPPLEM ENTARY INFO RM ATIO N: The Commission hereby amends part 14 of title 16, chapter I, of the Code of Federal Regulations by adding new § 14.12 to read as follows: $ 14.12 Use of secret coding in marketing research.
(a) The Federal Trade Commission has determined to close its industry wide investigation of marketing re search firms that was initiated in No vember 1975, to determine if the firms were using questionnaires with invisi ble coding that could be used to reveal a survey respondent’s identity. After a thorough investigation, the Commis sion has determined that invisible coding has been used by the market ing research industry, but it is neither a commonly used nor widespread prac tice. Moreover, use of the practice ap pears to have diminished in recent years. For these reasons, the Commission has determined that further action is not warranted at this time. (b) However, for the purpose of pro viding guidance to the marketing re search industry, the Commission is is suing the following statement with regard to its future enforcement inten tions. The Commission has reason to believe that it is an unfair or deceptive act or practice, violative of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to induce consumers to pro vide information about themselves by expressly or implicitly promising that such information is being provided anonymously, when, in fact, a secret or invisible code is used on the survey form or return envelope that allows identification of the consumer who has provided the information. (c) While the Commission has made no final determination regarding the legality of the foregoing practice, the Commission will take appropriate en forcement action should it discover the practice to be continuing in the future, and in the event that it may be causing substantial consumer injury. Among the circumstances in which the Commission believes that the use of secret coding, may cause significant consumer harm are those in which: (1) A misleading promise of anonymity is used to obtain highly sensitive infor mation about a consumer that such consumer would not choose to disclose if he or she were informed that a code was being used that would allow his or her name to be associated with the re sponse; and (2) information of any sort is used for purposes other than those of the market survey.
RULES AND REGULATIONS (Sec. 6, 38 Stat. 721 (15 Ù.S.C. 46); 80 Stat. 383, as amended (5 U.S.C. 552).) By direction o f the Commission, dated September 12,1978. Carol M. T homas, Secretary.
[FR Doc. 78-26565 Filed 9-20-78; 8:45 am]