Since media reports emerged in 2015 regarding concerns about various fundraising practices in the charities sector, the Information Commissioner's Office (ICO) has been carrying out investigations into compliance by charities with data protection law. These investigations resulted in monetary penalty notices being issued by the ICO to the RSCPA for £25,000 and the British Heart Foundation for £18,000 in December 2016, both for failing to handle donor's personal data in accordance with data protection law. More recently, the ICO has fined 11 more charities with fines of up to £18,000 for similar breaches of data protection law.
This article looks at the key insights from the conference held by the ICO, the Fundraising Regulator and the Charity Commission in February 2017 and the new guidance published from both the Fundraising Regulator and the ICO on consent.
The Fundraising Regulator is the independent regulator of charitable fundraising and was established in 2015. The Fundraising Regulator sets standards for fundraising practices through their codes of practice and guidance, and investigates and adjudicates on complaints.
Fundraising Regulator and ICO Conference, February 2017
To help inform charities about the requirements of data protection law and the regulators' expectations, the ICO, the Fundraising Regulator and the Charity Commission held a joint conference on 21 February (the Conference) to discuss key data protection issues relating to fundraising practices, such as implementing a consent based direct marketing model for fundraising purposes and being transparent with donors about how their personal data is used.
Whilst the ICO's investigations into this sector are now complete, a consent based model for fundraising remains top of the Fundraising Regulator's agenda and on the day of the Conference the Fundraising Regulator launched their new guidance for charities on fundraising: Personal Information and Fundraising: Consent, Purpose and Transparency Guidance (Fundraising Guidance), a checklist and a consent self-assessment tool for the charity sector.
Consent and the GDPR
Consent forms a major part of all fundraising practices and will remain a key issue in light of the General Data Protection Regulation 2016/689 (GDPR) which comes into force across Europe, including the UK, on 25 May 2018, and will replace the EU Data Protection Directive (95/46/EC) (Data Protection Directive) and the Data Protection Act 1998 (DPA). The GDPR has stricter consent and transparency requirements than under the current data protection regime. The GDPR also introduces severe sanctions for non-compliance, including fines of up to 4% of annual worldwide turnover or up to €20 million (whichever is the greater), compared to the current sanctions that could be imposed by the ICO of up to £500,000 for serious breaches of the DPA.
Since the Fundraising Guidance was issued, the ICO has now issued its GDPR Consent Guidance for consultation. The Fundraising Guidance may therefore be amended in due course to reflect the ICO's final GDPR Consent Guidance.
To assist charities to understand the issues discussed at the conference and reflected in the Fundraising Guidance, we have set out below a summary of the current law on consent and transparency and the changes which will be introduced under the GDPR.
Summary of current law on consent and transparency
- Under the DPA, data controllers must not process personal data unless they can meet one of the lawful conditions of processing as set out in Schedule 2 of the DPA and in relation to sensitive personal data (eg information about health or political opinions), one of the conditions set out in Schedule 3 of the DPA. Obtaining the consent of individuals to the collection and processing of personal data about them is one of the lawful conditions that can be relied on for fundraising purposes, and in the case of processing sensitive personal data, explicit consent is required. In some circumstances, eg postal marketing of non-sensitive personal data, the 'legitimate interests' condition of processing can also be relied on for fundraising purposes.
- There is no definition of "consent" in the DPA, however the Data Protection Directive which the DPA implements, defines consent as "any freely given specific and informed indication of [their] wishes by which the data subject signifies [their] agreement to personal data relating to [them] being processed." The ICO in their Direct Marketing Guidance, states that there must be some form of positive action by the individual to indicate their agreement for consent to be valid.
- Additionally, any direct marketing for fundraising purposes sent electronically eg via email, text or automated calls will need to meet the requirements under the Privacy and Electronic Communications (EC Directive) Regulations 2003 (as amended) (PECR). This will require an individual's positive consent.
- Data controllers must also process personal data fairly, which requires transparency to be provided, through fair processing privacy notices, as to who the data controller is, how the individuals' personal data will be used by the charity and any further information which is necessary in the circumstances to enable the processing to be fair, eg who their personal data may be shared with. The ICO has published a Code of Practice on Privacy Notices, Transparency and Control (Privacy Notices Code of Practice) which provides useful guidance on how to do this.
- Under the GDPR the consent requirements are stricter and consent must be a "freely given, specific, informed and unambiguous indication of the data subject's wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her". The underlined sections are new requirements. The GDPR also requires that consent must be capable of being withdrawn at any time.
- The essential elements of consent under GDPR are therefore that it is:
- Freely given: Individuals must have a genuine and free choice as to whether to give consent and must be able to refuse or withdraw their consent without detriment. The ICO in its draft GDPR Consent Guidance suggests that organisations should therefore ensure consent is not bundled up with terms and conditions for a service.
- Specific and informed: An individual should be told who the data controller is and the purposes for which their personal data is being processed. Where the data controller is carrying out the processing for multiple purposes, the individual should give specific consent for each purpose. This requires a granular approach to obtaining consents.
- Clear affirmative action: This could be by a written or oral statement, including the individual ticking a box. However the GDPR and the ICO's draft GDPR Consent Guidance make it clear that silence, pre-ticked boxes or inactivity eg failure to opt out will not be a valid form of consent.
- Evidence must also be kept by the data controller under the GDPR to demonstrate that the consents were given. The ICO draft Consent GDPR Guidance suggests that data controllers will therefore need to keep records of who consented, when they consented eg a copy of a dated document, what the individual was told at the time, how the consents were obtained and, if the consent has been withdrawn and when.
- The transparency requirements under the GDPR are also stricter than under the DPA. In particular the GPDR requires data controllers to provide more information in privacy notices where personal data is collected from the individual. There are also requirements to provide more transparency where personal data has not been provided by the individual, eg where the data controller has obtained the information from third parties or from publicly available sources. In both cases, the data controller will need to tell individuals the legal basis for processing their personal data. The ICO's Privacy Notices Code of Practice has more information about what must be contained in privacy notices, including a helpful checklist.
The Fundraising Regulator's Recommendations
The Fundraising Regulator in its Fundraising Guidance sets out a number of recommendations to ensure a charity's fundraising direct marketing activities comply with data protection law now and under the GDPR.
- Charities will need to have a clear understanding of the legal basis' on which they collect personal data for direct marketing purposes eg via consent or another lawful condition of processing, such as for the purpose of pursuing a legitimate interest. In each case this will also need to meet the requirements of PECR in relation to telephone and electronic marketing.
- Where consent is relied on, the Fundraising Regulator recommends:
- charities implement a 'GDPR-standard' of consent. It is the Fundraising Regulator's view that the GDPR and ICO's guidance all suggest that an express opt-in is the clearest, and most future-proof way of demonstrating consent. The ICO's draft GDPR Consent Guidance confirms this position and also states that historic consents will also need to comply with the consent requirements of the GDPR. In some cases this may require consents to be re-obtained to ensure compliance.
- charities to keep a record of the consents they have obtained to show that the individual has given their unambiguous agreement to their personal data being used for each direct marketing purpose, and by the relevant medium used. This is also recommended in the ICO's draft GDPR Consent Guidance.
- Direct marketing communications should also include a mechanism for the individual to easily withdraw consent at any time.
- Charities should review their existing fair processing notices and privacy policies to ensure they meet the ICO's Privacy Notices Code of Practice.
- Charities should also maintain a record of the fair processing notices and privacy policies they use, including when they were in operation, for which medium, and record any changes and who they were signed off by.
What were the key insights from the Conference?
There are a number of insights from the Fundraising Regulator and the Information Commissioner which were drawn out in the Conference:
- Fairness: A key theme of the Information Commissioner's speech was about fairness. Under the DPA and the GDPR, it is a requirement that personal data is processed fairly, lawfully and transparently. In particular, charities will need to tell individuals' the purpose(s) for which their personal data is being collected and used. In relation to the following fundraising practices, the Information Commissioner had the following views:
- Wealth screening: This is the practice whereby charities use a third party to profile their donors based on their wealth for fundraising purposes and also for legacy profiling, eg. those donors who leave donations in their wills. From what the ICO has seen from their investigations into wealth screening "it is not the activity which is against the law but failing to properly and clearly tell your donors that you are going to do it is". The Information Commissioner explained that if individuals did not know wealth-screening was being undertaken, this would be unfair as they were therefore unable to consent to such screening or object
- Publicly available information: Many of those attending the Conference seemed surprised that there were also requirements to be transparent about processing personal data where it was obtained from public sources. This was a key point made by the Information Commissioner who said that the principle of "fairness applies whether the information is given to you directly by an individual or obtained from other, publically available source.... Once you've collected it, once it’s in your hands, you are obliged to treat it fairly and in line with the Data Protection Act. That means being transparent and telling people what you're going to use it for, who you will be sharing it with."
- Data-matching / tele-appending: Data-matching is the practice whereby charities use third parties to update their donor's contact information and find missing information not initially provided by the donor and use it for their purposes. Similarly, tele-appending uses the donor's telephone number to obtain other personal information about that donor. The Information Commissioner explained that, "Fairness also means that personal information should only be used in a way that people would reasonably expect". A donor would not expect a charity to obtain their phone number from another source, if the donor had not specifically provided their phone number in the first place. The Fundraising Guidance states that informed consent should be obtained to be able to carry out data-matching / tele-appending.
- Fundraising Preference Service (FPS): This is due to be launched by the Fundraising Regulator in the summer. The FPS would allow all members of the public in England and Wales to opt-out of any or all direct marketing (eg email, test, telephone and postal mail) from a specific charity. However it is not clear whether it will be mandatory for charities to sign up to be listed on the FPS.
What charities should be doing now
Many organisations including those in the charity sector are taking steps now to ensure compliance with the GDPR, including looking at consent requirements in relation to fundraising. This includes a number of charities who have undertaken a consent review and whose compliance journeys have been included in case studies published by the Fundraising Regulator alongside their new Guidance.
Charities will need to review their activities where consent is relied upon and carry out a gap analysis against the Fundraising Guidance and the draft ICO consent guidance, and implement (if required) the necessary remediation to ensure compliance with the GDPR standard of consent for when it comes into force.