Is it legal for me to sell my company’s client list?

 

Company owners who want to monetize their marketing efforts often inquire about the legality of selling their customer and lead lists. Find out what is legal here.

What you’ll discover:

Is it legal for me to sell my company’s customer list?
Do I need customers’ consent to sell their information?
Is it permissible to purchase client or lead lists from companies?
When staff leave or are dismissed, how can firms preserve their customer lists?

A company’s customer list might be its most important asset. It might contain current, previous, and future customers, and it can be a significant resource for advertising or marketing. Client lists from one company might be useful for other companies attempting to contact new clients. A nail salon owner, for example, may be able to sell their customer list to a hair salon, or vice versa. Company owners who recognize the worth of their client list may be concerned about the legal ramifications of selling their customers’ information. We’ve got solutions to all of your queries concerning selling customer lists.

Is it legal for me to sell my company’s customer list?

When business owners discover that selling their client list to another company might be profitable, they often inquire: Is it legal to sell my company’s client list?

Company owners may sell their customer lists as long as they follow privacy rules and do not promise clients that their information will not be shared. Some customers expressly prefer that their information not be shared. Other customers may believe that you will not reveal it, but you are likely under no legal duty to do so unless you have specified that you would or a privacy regulation applies. Privacy regulations in your location may vary, but in general, you must offer notice or a chance for customers or potential clients to opt out of having their information collected, kept, sold, or shared.

You may have promised customers that you would not disclose their information at the following locations:

Disclaimers on the website.
Agreements on Confidentiality.
Non-Disclosure Agreements (NDAs).
Policies Concerning General Privacy.
Non-compete clauses.
Any agreement with a customer.

Before agreeing to sell a client’s information, look through all of the documents that govern your connection with them. Bear in mind that certain states have stringent prohibitions on data collecting and dissemination. Customers’ permission is required in Maine and California, for example, to sell information for ad targeting. Some sectors are also barred from selling specific information. It is a good idea to consult with a lawyer about the rules and regulations that apply to your location and business.

Do I need customers’ consent to sell their information?

Federal law does not require a company to get consent before selling a customer’s data. As a consequence, you usually don’t need permission from a customer to sell their data as long as your state’s laws or the client’s state’s laws (if they live in a different state) don’t prevent it. Depending on the information you gather, you may need to warn customers that you are collecting data and explain how you plan to utilize it. If you conduct business internationally, you may be subject to extra restrictions and procedures, such as the European Union’s General Data Protection Regulation (GDPR).

Data privacy and protection regulations may require you to get permission from anybody before collecting and selling their personal information. They may also demand that you enable customers to opt out of having their data sold and that you disclose precisely what data you are gathering.

Is it permissible to purchase client or lead lists from companies?

Purchasing customer or lead lists from companies is typically lawful. More than 200 firms offer email lists in North America alone. Sending emails to specific contacts, on the other hand, may be prohibited, particularly if they have not signed in to receive such emails. Calling someone on the National Do Not Call List, on the other hand, might result in sanctions.

You may purchase customer or lead lists from one of the numerous firms that gather and sell this information to third parties. You may also be able to purchase them straight from other companies. Lead generation companies often offer leads by the thousand, and your organization may phone or otherwise contact them to seek sales using any means you deem suitable and lawful. But, while purchasing lead lists, keep in mind that they may include problematic information, raising severe issues about whether the information is legitimate and whether these contacts signed in to receive messages from third parties. If you contact someone who has opted out, particularly by email, text, or phone, you may face legal consequences.

When staff leave or are dismissed, how can firms preserve their customer lists?

While customer lists are a valuable commodity, some ex-employees may attempt to sell it to others against your desires, or contact your clients after beginning at a new firm. This might be a severe concern if you do not want this information exposed or if you have promised them that you would not reveal their information.

You may secure customer information by doing the following:

Making certain that passwords are reset when an employee departs.
Ex-employees’ access to customer information is restricted.
Utilizing an Employee Non-Disclosure Agreement (NDA) to prevent workers from revealing customer information.
Developing a privacy culture in relation to client data (such as through aggressive Privacy Policies or regular use of Confidentiality Agreements).

An Employee NDA does not preclude an employee from disclosing information. Instead, it imposes legal implications on that employee, as well as a possible future employer, if the information is revealed. In many circumstances, this agreement is sufficient to make staff reconsider stealing and distributing customer data.