Personal Injury Fraud

Debate between Karl McCartney and Caroline Dinenage

Wednesday 18th November 2015 Westminster Hall

[Caroline Dinenage]

As I say, the taskforce has been set up to look at all the issues, and I believe it may be considering that limit, but I will write to the hon. Gentleman with clarification if that is not correct.

The Chancellor announced proposals in the July Budget to introduce a cap on the charges that CMCs can apply to consumers. We are looking in particular at restricting bulk PPI claims to more proportionate levels and will consult on how that will work in practice later this year. A cap on charges will, we believe, help to reduce incentives for CMCs to collect marketing leads, resulting in a reduction in the number of speculative calls made.

I would like to draw Members’ attention briefly to other measures taken by the Government to tackle the issue of nuisance calls. In March 2014, the Government launched an action plan to tackle the problem, asking the consumer organisation Which? to lead a taskforce on consent and lead generation in the direct marketing industry. The taskforce made a number of recommendations, including giving the Information Commissioner’s Office powers to hold to account senior executives who fail to comply with the rules on marketing. The Government are currently considering those recommendations.

The Government have made it clear that it must be easier for the ICO to take action. The ICO no longer has to prove substantial damage or substantial distress caused by a company before action can be taken. Since 2011, it has had the power to issue penalty notices of up to £500,000, and in September 2015 it issued a penalty of £200,000 against a company that made more than 6 million automated calls to consumers—the highest penalty ever issued for nuisance calls. The ICO has also issued a penalty of £75,000 against an organisation that claimed to offer a nuisance call blocking service but was instead making unsolicited live marketing calls to members of the public—the mind boggles. The ICO continues to take its enforcement responsibilities seriously and has 66 cases currently under investigation.

The Government are also exploring options to provide call-blocking devices to vulnerable customers, and we will consult shortly on legislation to require all direct marketing callers to identify themselves. That will enable consumers to determine who is calling and to report unwanted calls to the regulator. I ought to make it clear that the Government have not ruled out further reform to this market.

[Karl MᶜCartney]

Before my hon. Friend the Minister finishes her remarks, may I say that I welcome the courteous and informative comments she and everyone else who has taken part in the debate have made, including even my hon. Friend the Member for Newark (Robert Jenrick)? He does not to get to say anything in his role as Parliamentary Private Secretary, but it was good to see him here, providing very useful information.

The Minister mentioned that some of these companies are fined. Unfortunately, the directors behind the companies often have what are known as “phoenix companies” waiting in the wings. The Government need to take direct action on the individuals who are at fault for carrying out these pernicious acts with regard to cold calling. I make that plea as a final comment in this debate.

[Caroline Dinenage]

That is a valid point. These individuals need to be named and shamed for what they are and, indeed, what they are doing; my hon. Friend is absolutely right.

We have not ruled out further reforms to this market. I hope I have reassured hon. Members today that the Government take this subject very seriously. We remain committed to continuing the reform process to the benefit of all and we want to work with all stakeholders to achieve that.

Question put and agreed to.

Resolved,

That this House has considered personal injury fraud.