Nuisance Phone Calls

Jackie Doyle-Price Excerpts

Thursday 28th February 2013 Westminster Hall

[Alun Cairns (Vale of Glamorgan) (Con)]

It is a pleasure to serve under your chairmanship once again, Mr Havard. I thank the Backbench Business Committee for selecting this subject for debate and those Members who supported me in seeking parliamentary time, especially my hon. Friends the Members for Beckenham (Bob Stewart) and for Cleethorpes (Martin Vickers), who turned up to make representations before the Committee. It is also good to see my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who has raised this issue in the past, as well as many other colleagues.

I have been overwhelmed by the response I have received since applying for this debate. I am sure that more Members would have been present today were it not for the Eastleigh by-election, which is a subject that I might briefly return to later. More than 100 MPs responded positively to my suggestion of a debate on the subject and there has been significant interest from the national and regional newspapers and network and regional television outlets, which clearly shows that nuisance calls are a problem that needs to be resolved. The matter might sound straightforward, but it is complex and ever-changing. I referred briefly to Eastleigh, and we all need to confess, both as individuals and as political parties, to the role that we play in generating even more nuisance phone calls.

Let me explain the background to my interest in this subject. Although I have a specific interest in ICT legislation, I did not appreciate the significance of the issue until a constituent explained his predicament. A retired individual from Cowbridge in my constituency in the Vale of Glamorgan, who is regularly at home during the day, highlighted the fact that he could receive more than a dozen calls from sales and marketing companies during working hours and throughout the evening.

I initially assumed that the Telephone Preference Service would resolve the matter, but after researching the issue, I started to appreciate its complexity. Anyone who wishes to stop unsolicited calls can register with the Telephone Preference Service, which makes it against the law to call consumers who are registered on the list unless they have given prior consent to do so.

Ofcom has the responsibility for maintaining the Telephone Preference Service, which is administered under licence by the Direct Marketing Association. The Information Commissioner has the responsibility to follow up consumer complaints and take action against those companies that are breaking the law. That sounds pretty straightforward, providing that each party lives up to its obligations. However, the situation is not so straightforward. To complain about an unsolicited call, we need the caller’s telephone number. Caller display or dialling 1471 should enable a complaint to be pursued. The privacy and electronic communication regulations require the caller to identify themselves when asked, but it appears that most withhold their number, making it almost impossible to identify them unless the receiver is prepared to endure the marketing pitch, which is undesirable to many. In many circumstances, the caller will simply hang up when the receiver asks for their identity at the outset.

The situation does not stop there. Many calls are silent or abandoned, and that is because call centres use automated diallers. That technology dials more numbers than there are agents available, to maximise the time they spend speaking to consumers. It is only when the consumer answers the phone that an agent will be connected. If an agent is not available there are two options: the automated system can leave a message, which is considered to be an abandoned call, or it can drop the call without a message, which is considered to be a silent call. Both are irritating, but a silent call can be intimidating or even frightening to some constituents. That situation is compounded when the number is withheld, preventing a complaint from being made.

There are two issues here. First, many call centres do not adhere to the rules laid down by the Telephone Preference Service or the privacy and electronic communication regulations. Secondly, withheld numbers prevent a consumer from complaining. Even if a company is committed to following the PEC rules, loopholes remain. If someone is registered with the TPS, it remains legal to call them to conduct a survey as an excuse. Another way of getting around the rules is to use the “permission to call” loophole, which is where someone who may have bought a product in the past has not ticked the box to exclude their data from being passed on to “carefully selected partners”. The reality is that their data have been sold on to another company that might have some tenuous relationship with the original company. It does not even stop there.

There is also a third dimension: calls from overseas. Calls being made on behalf of UK companies should also adhere to the privacy and electronic communication regulations. There is evidence that they do not, but there is a further problem when they are not acting on behalf of UK companies.

It is little wonder that I received such a response to this debate given the number of complaints. Ofcom shows that 47% of adults experienced the silent call treatment during the last six months of 2012, which is up by a quarter on the year before. In July 2012, there were some 10,000 complaints; six months earlier the number was a third of that, which shows that the problem is increasing at a remarkable rate. A survey by Which? magazine found that 76% of respondents were still getting lots of nuisance calls despite being registered with TPS. It is safe to make the assumption that there would be even more complaints if the callers could identify the number from which they were called.

The regulatory responsibility is split and not straightforward. The Information Commissioner’s Office is responsible for enforcing companies to comply with the rules, and Ofcom has powers to deal with the silent or abandoned calls. Let me give credit to the Information Commissioner and to Ofcom. Both have made some efforts to challenge and fine those responsible for such calls. I have to stress that they were extremely slow to respond, but I welcome their late efforts none the less.

[Jackie Doyle-Price (Thurrock) (Con)]

My hon. Friend is getting to the nub of the argument. There are regulators responsible for policing such activity, but as with any regulatory breach, regulators have to be fleet of foot in dealing with transgressions, or companies will just carry on with them. Would my hon. Friend like to see a much more aggressive approach on behalf of the regulators, so that action is taken sooner?

[Alun Cairns]

My hon. Friend shows great interest in these issues and makes an extremely valuable point. I have already mentioned that Ofcom and the Information Commissioner’s Office have been slow to respond to the problem, and as my hon. Friend highlights, the position is ever changing. Not only are telephone numbers changing but so too is technology. Although I welcome Ofcom’s five-point plan, which it would probably cite in response to the criticism coming from the Government Benches, it is not a game changer. The plan is helpful and welcome, but it will not make a significant difference to most people, particularly as it is an ever-changing situation.

I have serious concerns about the regulatory responsibility being split between two bodies. It causes confusion to the consumer and adds nothing to the prevention or resolution of the problem. Having one body—probably Ofcom—would be much more efficient. The issue of withheld numbers, however, is central. Technology improvements allowed caller ID to be introduced in 1994, and at that time a consensus developed that callers should be able to withhold numbers if they wished. Key reasons related to the need to protect people receiving calls from charitable groups, such as those supporting victims of domestic violence, and to the need for the police to contact someone without disclosing their identity. At the time, there was no major issue with nuisance calls, and it is fair to say that contact centres have now abused the protection that was intended for the greater good.

Nuisance calls could be compared to someone knocking at the door wearing a mask or a balaclava. Would we answer the door to such an unknown caller? Of course we would not. Why, then, do we allow the same thing to happen over the telephone? Ironically, door-to-door salesmen from some of the companies Ofcom has criticised must show identity cards. In recent years, some of those companies have used them as a marketing ploy to demonstrate how responsible they are. Salesmen are therefore showing ID cards when they call at the door, but nothing similar happens when they use the telephone.

Many people have been forced to ask their telephone operators to block all withheld numbers—for a fee, of course. That can leave individuals in a vulnerable position. GP practices, police stations or other essential service providers do not always display their number—possibly with good reason, possibly not—so constituents may refuse to answer the telephone.

Some innovations and new telephones can overcome part of the problem, but there needs to be a shift in policy to protect the consumer. One option is that organisations that wanted to withhold numbers would need to show they had good reason for doing so and to get Ofcom’s agreement. That, of course, should not apply to domestic users. We need to recognise that that will not always deal with certain situations, given technological developments and the ever-changing situation. Voice over internet protocol and the international calls that I mentioned are particularly problematic.

I am not a fan of legislation for the sake of legislation, so I ask UK firms to play their part voluntarily. They should not only adhere strictly to the regulations, but go further and introduce higher standards, possibly in the form of a code of conduct. It would be a good start, for example, if they agreed to stop using withheld numbers, rather than being forced to do so through legislation. Using withheld numbers is in their interests, not the consumer’s interests, so if they really want to react to consumer demands, that would be a good start.

Telephone network operators also have a part to play. They could establish a system that made it possible to identify callers using withheld numbers. That would allow complaints to be made to Ofcom or the Information Commissioner. Legislation may well prevent the caller’s number from being given to the receiver, but the network operator will often know what the number is. A simple system could be introduced to allow a consumer to make a direct complaint to Ofcom, with the telephone operator advising Ofcom what the number is. Those innovative, straightforward proposals would resolve many of the problems.

As I said, the situation is extremely complicated. I have not even got on to texting or calls to mobiles. However, my comments demonstrate the problem, which has increased partly as a result of payment protection insurance and partly as a result of the claims that have been made for many other things. Given that the data that have been published show a trebling of nuisance phone calls in one month alone last year, we can assume the figure is even higher, and it would be much higher still if the receiver of the call could complain because they had the telephone number. I am grateful for Members’ support.

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Havard. I congratulate the Backbench Business Committee on bringing this debate before us. Many of us have been contacted by constituents about this subject in the past weeks, if not months.

Anger over nuisance calls is growing, and rightly so. The latest Ofcom complaints data show that complaints to the Telephone Preference Service increased 150% from July 2011 to July 2012. Many of my constituents have regularly received nuisance calls that are supposedly from within the UK. They are told there is something wrong with their computer and that the caller is qualified by Microsoft to fix it for a fee. They may also be asked for personal details, but the details some people reveal are passed on, and, lo and behold, those people then receive another call, about anything from what they do in their leisure time to their choice in shoes.

A constituent told me of a call they have received, which starts with the words, “This is an urgent message about your personal pension.” It goes on to say, “Press 5 for immediate action,” at which point, the person receiving the call can be signed up to something. The message then says, “Or press 9 to be removed from our database”, although the company will, of course, do no such thing, and the person will receive the calls over and over again. Dialling 1471 in the hope of finding out who is calling just results in hearing, “We do not have the caller’s number.”

Thousands of people up and down the country have to deal with this every day, and many of them are elderly. For many vulnerable and elderly people, nuisance calls are a menace, and one that puts them at risk of fraud—just as if a crook or pushy salesman had turned up on their doorstep offering to sell them this, that and the other. People are experiencing this every day over the phone.

A growing number of nuisance calls come from overseas, and there seems to be no way of protecting the British public from them at the moment. Many people have been victims of terrible scams and have lost money, which they can ill afford to lose at this time.

In 2010, Parliament approved an increase in the financial penalty available to Ofcom to enforce its rules on nuisance calls, from £50,000 to £2 million. Yet, there is still no real action. The Information Commissioner’s Office has fined just one company in the past 18 months. Studies show that 76% of people who have suffered from nuisance calls were still receiving unsolicited calls despite being registered with the Telephone Preference Service.

What is being done, therefore, to improve the situation? The TPS makes it clear on its website that there has been a rise in the number of unwanted calls made to people registered with it. However, it says that most of them originate from companies that deliberately ignore the law or disguise their identity.

[Jackie Doyle-Price]

As the hon. Gentleman mentioned, many of these nuisance calls are generated overseas, which means that the firms taking advantage of the information the calls produce are deliberately getting round the regulatory system here. Would the hon. Gentleman support what I would like to see, which is the naming and shaming of high street firms that pay overseas companies to do exactly that?

[Mr McKenzie]

I understand the hon. Lady’s point, and I share her concern, but I would like to go a bit further than just naming and shaming.

The TPS has no enforcement powers, but it does send its complaints to Ofcom and the Information Commissioner’s Office each month. However, despite the TPS sending more than 1,000 complaints each month, the ICO has yet to issue a fine against any company.

What does the law say, and who enforces it? Ofcom has powers under the Communications Act 2003 to deal with the persistent misuse of a communications network or service, which includes the generation of unsolicited and silent calls. The ICO enforces any breaches of the Privacy and Electronic Communications (EC Directive) Regulations 2003, which cover rules about unsolicited electronic marketing messages sent by telephone, fax, e-mail or text. Regulation 19 requires organisations making automated marketing telephone calls to have the prior consent of the person being called. That means that live marketing calls cannot be made to anyone who has indicated an objection to receiving them—for example, by registering with the TPS.

What, however, is happening in reality? Constituents have told me time and again that, despite registering with the TPS, they are still plagued by cold calls. The safeguards are therefore doing little to protect them. Ofcom has fined nine companies for making silent calls, but if the companies persist it must be because, in spite of the fines, it is worth their while. Over the 10 years for which Ofcom and the ICO have had the relevant powers they have been used only rarely against the many companies known to be breaching the requirements.

Apart from an apparent general reluctance to act, the regulators tie their own hands by the policies that they set. To give just a few examples of the complexity of those policies, Ofcom uses the persistent misuse powers only against those who it finds have failed to follow its policy that no more than 3% of calls may be abandoned. All other reported misuse, including making millions of silent calls within the 3% limit, is tolerated. The ICO requires that the direct marketing purpose of the call be explicitly declared. However, a caller collecting information about an individual for direct marketing purposes may say that they are providing public information or conducting a survey.

The maze of regulations does not help. We need one clear point of contact with the power to act and enforce the law. While there are different regulators and different Departments in charge, there will always be loopholes for the companies to abuse and exploit. I fear that legislation may be the only step that we can take to curtail nuisance calls in the long term. I call on the Minister and the Government to bring about a single, simple point of contact for any individual wishing to protect their privacy from unwanted calls, texts, faxes or e-mails.

--- Later in debate ---

[Jackie Doyle-Price (Thurrock) (Con)]

I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this debate and thank all hon. Members for their wise contributions, which have shown considerable consensus.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned the need for stronger regulation, but we are looking for more regulatory activism, because there are already quite a lot of powers for regulators on the statute book. We are after more compliance and more enforcement, and we should perhaps look at the regulators’ tools. In my intervention on the hon. Member for Inverclyde (Mr McKenzie), I mentioned the regulator having the power to name and shame companies that are flouting and abusing regulations. I should like to see more naming and shaming, because significant high street names are engaging in some of these abuses.

I want to focus on the activities of ambulance-chasing lawyers and claims management companies, which are among the worst perpetrators of nuisance calls and have had a boom with PPI mis-selling. It is becoming abundantly clear that the next area of expansion is accident compensation. As Members will realise after the Mid Staffordshire report and as I know from being a member of the Public Accounts Committee, the field of health compensation is growing like Topsy. It is so cheap for companies to make randomly generated calls that that will be the emerging nuisance.

We have seen how prevalent daily hounding is by text, e-mail and telephone. Which? reports that 74% of people have been contacted in that way. As we have mentioned, it is the most vulnerable people—the people at home and not working—who are being plagued the most by this menace. Let us call it what it is: harassment. Numerous calls can be made during a day.

Sometimes consumers unwittingly find themselves entering into contracts that cause them significant financial detriment and are fleeced for payments without any service being delivered. Which? told me of an 87-year-old housebound gentleman who was quite deaf and frail. He was on the Telephone Preference Service register, had not taken out any loans for years and had no PPI, but during a call, he was persuaded to give his credit card details to a claims management company, which promptly relieved him of £250. I call that theft. The regulatory system needs to be able to take prompt and severe action against companies that engage in such activities.

In the time available to me, I want to highlight what consumers can do, given that the regulators are being a bit lily-livered about dealing with the issue. Richard Herman has fought back successfully against being plagued by such companies. The man is a complete hero of mine. He hit the headlines last year when he successfully brought a claim against PPI Claimline in the small claims court for compensation for the nuisance calls that he received.

I must advise hon. Members that the even better news is that Richard Herman has done it again. He was recently cold called about his accident. He played along with the caller, who—illegally—would not say who they were, kept plugging away and asking the question and eventually discovered that they were from a 260-person firm of solicitors called Scott Rees. Mr Herman contacted Scott Rees on the phone and advised them that he would charge them £10 a minute for any further time that he spent being contacted by the firm or its lead-generating system. Sure enough, the firm called him again, so he took great pleasure in invoicing it for £230 and received a cheque. Consumers can fight back. Good luck to Mr Herman; he has obviously found himself a nice little earner.

Mr Herman has set up a website at saynotocoldcalls.com, where he outlines a six-point plan to deal with cold callers. It is probably much more use than the advice that Ofcom gave to the hon. Member for Edinburgh West (Mike Crockart) and a fraction of the length. Mr Herman’s first point of advice is to record the telephone call and then to play along to find out the company name, advise the company that it will be invoiced £10 a minute if it calls again, wait for it to call again and then send it an invoice and sue in small claims court if it does not pay. Thanks to Mr Herman, there is a precedent.

We would all do well to advise our constituents that that is the way forward. When cold callers get to Mr Herman, it will cost them, but he says that it would deter them more if penalties were higher. That comes back to what we have all been saying about the regulators taking more action where detriment occurs. Much more should be done in terms of spot fines to curb such behaviour. Until we start showing that we will take action against cold callers, they will continue; it is just too profitable for them not to do so.

We might need to examine the activities of companies that present direct debit instructions to banks, which leaves consumers exposed, and to consider codes of practice in that regard. Telecommunications providers that allow scammers, particularly from overseas, to use our network have a big role to play. We are aware of other abuses that involve re-routing through UK numbers, the owners of which are often presented with significant bills. I hope that the Minister will consider that bigger issue and engage with other Ministers about it.

As we have discussed, there are lots of regulatory underlaps in this area, and many different agencies are involved. That is the challenge for the Minister. As we have heard, we have a good opportunity now to tackle the issue. We have all had enough of such attacks on our privacy, and we must engage with the industry on behalf of consumers, who do not deserve this nuisance.