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Can I use my customer database to send a customer a Christmas Card?

Yes, as long as it is within the customer's reasonable expectations.

Sending a Christmas card is usually done to promote a relationship that an organisation already has with a customer and may often be within the range of activities such customers are likely to reasonably expect.

Australian Privacy Principle 6 allows an organisation to use personal information for the main purpose for which it collected the information, and also for purposes that are related to that purpose and within the individual's reasonable expectations. (If it wants to use the information for other purposes, it would usually need to have the individual's consent, although there are some exceptions to this rule.)

For more information about privacy and the private sector go to the Australian Privacy Principles  and the APP Guidelines.