Nuisance Calls
Debate between Mike Crockart and Guy Opperman(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mike Crockart (Edinburgh West) (LD)
I beg to move,
That this House has considered nuisance calls.
I thank the Backbench Business Committee for granting time for this important debate. Many Members who would like to have been here for this debate are unable to be with us for various reasons, including constituency commitments, debates in Westminster Hall and, sadly, the funeral of our friend, Paul Goggins. Our thoughts are with the friends and family of that departed Member.
I would like to use this opportunity to say that my thoughts are with the family of a three-year-old in my constituency who went missing from his home overnight last night. We all fervently hope for Mikaeel Kular’s safe return as soon as is possible.
It has been a long and hard road to get to this point. When I started my campaign 18 months ago, I did not for the life of me think that it would grow to the size that it now is. I must thank some people and institutions for their help. I thank The Sunday Post and Which? for their support and their campaigns. They have both launched petitions over the past 18 months. There are now more than 130,000 signatures from members of the public urging action on this issue.
In response to that, I set up the all-party parliamentary group on nuisance calls in July last year to look into the unsolicited marketing industry and the issue of nuisance calls in particular. It is made up of Members of all parties and I especially thank the hon. Member for Vale of Glamorgan (Alun Cairns) for his support in co-chairing and running the group. Unfortunately, he cannot be present today because of a constituency commitment. The all-party parliamentary group has completed an inquiry and a report, which I will rely on for many of my remarks.
I will set the scene by defining some of the concepts that we will discuss, because this is a complex area. Nuisance means different things to different people. The term “nuisance call” is used to capture a wide range of types of calls from silent calls to live marketing calls and from harassment to financial scams. By definition, nuisance calls are a problem for consumers. They interrupt family meal times or are received wearily after a hard day’s work. They often demand that elderly or vulnerable people answer the phone when it is an effort to do so. For some people they are a mere irritation, but for others they cause significant harm or distress, and they can even make people feel intimidated when answering their phone. Not all nuisance calls are illegal. Consumers sometimes term legitimate contact a nuisance, for example if a call comes at an awkward time of the day. Nuisance is often in the eye of the beholder.
For the purposes of this debate, we will focus on marketing calls, whether silent or live and whether over a fixed line or a mobile, that are made without the consumer’s consent. We will also consider the problem of nuisance spam texts, although the consent mechanism differs. Marketing calls operate on an opt-out basis. Until a person says explicitly that they do not wish to receive marketing calls, companies that are engaged in direct marketing are able legally to contact them by telephone. In contrast, marketing texts operate on an opt-in basis. They can be sent legally only if a consumer states that they are happy to receive them.
The definitions of terms such as live marketing calls and marketing text messages follow those that are used by the main regulators, which are Ofcom and the Information Commissioner’s Office. The definitions focus on the type of call and do not cover situations in which, although the individual call may be legal, the pattern, frequency or time of the call should classify it as a nuisance.
Guy Opperman (Hexham) (Con)
I congratulate the hon. Gentleman wholeheartedly on securing this debate and on the campaign that he has been running. Does he accept that the fundamental problem that our constituents complain to us about is that there are frequently multiple calls and that calls are often made at night time? I have had constituents complaining of more than 15 calls in a day and dozens of constituents have complained that people call them at 1, 2 or 3 o’clock in the morning, which is particularly alarming to members of the public.
Mike Crockart
My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), who is unable to be here, outlined a very worrying set of circumstances to me, which may well have affected the hon. Gentleman’s constituents. In the last week, a large number of automated calls have been made at those sorts of times in the morning, starting with the phrase, “The Government want you to know that—”. The time at which the calls are made indicate that it will almost inevitably be bad news. Those calls can be very worrying and cause immense distress.
Unfortunately, the regulatory framework for nuisance calls is complex. That is partly because it has emerged through historical accident, rather than by design. Ofcom regulates silent and abandoned calls. The regulations state that when using automatic dialler equipment, which must have been used in the cases that I have just outlined, no more than 3% of answered call attempts should be abandoned because no live agent is available at the call centre. That means that if 1 million calls are made, 30,000 nuisance calls can be made legally.
The Information Commissioner’s Office is responsible for enforcing data protection regulations, including the Privacy and Electronic Communications (EC Directive) Regulations 2003, which I will call PECR from now on. Under PECR, the Information Commissioner’s Office is responsible for enforcement of live calls, which includes recorded calls and spam texts.
Alongside the two main regulators, a number of other organisations, with or without regulatory powers, have an interest. Claims management companies, which are responsible for the vast share of calls, are regulated by the claims management regulator. The Financial Conduct Authority will shortly regulate debt management and payday lending companies. The National Fraud Authority and the police have a role to play when nuisance calls pertain to fraud, scams or other forms of illegal activity. PhonepayPlus regulates premium rate phone numbers and services in the UK. That is by no means a full list.
Mike Crockart
The hon. Gentleman makes a good point, although I am not sure whether the failure to complain results just from a lack of confidence. Part of it may well be a lack of knowledge and a lack of willingness to commit time to go through the process of making a complaint. However, I was about to make the point that he raises.
Data from the portal that Which? set up showed that only about half the people who used it went on to make a full complaint to the regulators. As the hon. Gentleman says, the number of nuisance calls received far exceeds the number of official complaints. BT estimates that its nuisance call bureau receives about 50,000 calls a month— that is the figure I have, which is bad enough. There are also nuisance texts, and in the evidence that the all-party group received, the technology company Pinesoft estimated that about 8.7 million are sent every day.
Ofcom’s omnibus survey is generally considered to produce the most accurate estimate of the number of nuisance calls that people receive, because it involves people making a diary of the calls that they receive for a certain period. It has resulted in an estimate that consumers who experience unwanted calls receive an average of about two a week, with four out of five participants receiving at least one nuisance call during the four-week research period. About a quarter of people recalled receiving more than 10 calls in a four-week period. However one calculates it, the annual number of unwanted calls is almost certainly more than 1 billion.
Another recent piece of research was commissioned by StepChange, a debt charity, and conducted by YouGov. It found that more than 3.2 million British adults who had received an unsolicited marketing call or text had been left afraid to answer the phone as a result of those communications.
Guy Opperman
On that point about the fear factor, the result is that the telephone is taken out of the use of people who would otherwise regard it as a normal service in their home. It is manifestly clear on any interpretation that such texts and calls are increasing, and that the Government need to do more to give the regulator and others teeth, so that we can stop them.
Mike Crockart
Absolutely. That is a good point, and that fear is concentrated among certain groups, such as the elderly, who are at home during the day more, and those who, as StepChange found, are hounded by companies encouraging them to take out payday loans and so on. Just over 26.3 million British adults have been offered high-interest credit such as payday loans via unsolicited marketing calls or messages, and 83% of British adults feel that consumers need greater protection from them.
As I said, people who get a high number of nuisance calls tend to be elderly, and a recent trial of call-blocking technology by trading standards in Angus, in Scotland, found that about 40% of phone calls received by elderly and vulnerable residents were nuisance calls. It also found that older people were the victims of 40% of all nuisance calls. As I said, that is partly because of the timing of nuisance calls, with 78% being made between 8 am and 6 pm, when most people are at work. The trial found that without call-blocking technology, participants were extremely concerned about scams, the risk of a fall when answering the phone, feeling helpless to stop calls and feeling intimidated by callers. Once call-blocking technology was installed, all those concerns were reduced considerably.
I decided to carry out a trial in my constituency by installing call-blocking technology in the homes of two constituents who were being particularly bothered by nuisance calls. The results were quite shocking and bore out what has been found elsewhere. Mrs Moffat is a constituent who is deaf and has to use a textphone, and her husband suffers from early dementia. Since 27 August, 65% of her incoming calls have been nuisance calls. Since 11 September another constituent, Mrs Manchester, has received 212 calls, a third of which have been nuisance calls. Interestingly, the figure is down from 43% two months ago, which seems to indicate that the use of call-barring technology alone is reducing their instance.
The argument is strengthened by examining StepChange’s research. A particular problem are the nuisance calls targeted at indebted people, which are causing tangible stress and anxiety. Some 65% of respondents to a website poll said that they were afraid to answer the phone as a result of nuisance calls or texts. That stress and anxiety risks exacerbating existing mental health difficulties. According to the World Health Organisation, the more debt people hold, the more likely they are to suffer from mental health problems. That further serves to illustrate why it is essential to ensure better protection for financially vulnerable consumers from the potential harm of nuisance calls or messages. Yet there is clear evidence that those people are being targeted.
More than 26.3 million British adults say that they have been offered high-interest credit via unsolicited marketing calls. For those who do not need it, that is annoying, but it is easy enough just to delete the messages. However, financial difficulties can lead to poor economic choices, and 6% of respondents said that as a result of a nuisance call or message, they had taken out a financial service or product that actually worsened their financial position. The lure of a no-questions-asked loan is difficult to pass up when someone can justify to themselves that it is only for a week until they get back on their feet.
The problem of protecting vulnerable consumers is the most pressing, since that is where consumer detriment is most significant. Whatever actions are taken to address the problem of nuisance calls in the longer term, that issue must be dealt with now using whatever available means.
The difficulty of coming up with an agreed figure for nuisance calls is not merely academic, because it reveals two issues that go to the heart of the problem. First, it suggests a lack of coherence in information and data about nuisance calls. Data are being generated and collected, or discarded, over a large number of organisations and are not effectively shared or centrally stored. For example, the all-party group was surprised to learn in its inquiry that BT does not share with the regulator data generated by its nuisance calls services. Similarly, trueCall, a manufacturer of call-blocking technology, reported that it had not been able to interest the regulators in the data generated through the use of its products. In addition, the TPS does not share data with the Direct Marketing Commission, but both are arms of the Direct Marketing Association.
The discrepancy between the number of initial reports received by consumer-facing organisations such as Which? and BT, and the final number of complaints received by the regulators, suggests that not all consumers who receive nuisance calls follow through the reporting structure. That could be for a number of reasons, but the most likely are that the complaints mechanisms are too onerous; the complainant lacks the necessary information to make a complaint, such as the name of the company or its telephone number; or, as has been said, people believe there is little point in making a complaint. The result is that we see only part of the picture at any one time, which makes it all the more important for us to act.
On the economics of nuisance calls, I am not saying that we must ban all direct marketing. The direct marketing industry undoubtedly contributes financially to the UK economy. Call centres alone employ more than 1 million people in the UK. Direct marketing techniques are used by a huge number of companies from a wide range of sectors to generate business. At its best, direct marketing can be informative and useful to consumers, helping them to find the best deal and the most suitable product for their needs.
On the other hand, nuisance calls cause such a high level of irritation that it is easy to forget that there is a market for them. They are made to generate sales. Their continued existence means that we can assume only that they are at times successful. The claims management industry is consistently responsible for the largest share of complaints, but nuisance calls originate from a wide cross-section of industries. In live calls, the top topics of communication are payment protection insurance reclaim, accident claims and energy. The top topics for automated calls are, similarly, debt management, PPI and energy. Other topics include research and surveys; so-called sugging, when the caller pretends to be from a legitimate market research organisation; Government grants, such as for loft insulation; and insurance and telecoms.
The inquiry heard evidence that an outbound live marketing call can be made for as little as 20p—the cost drops to just 1p for automatic dialler equipment. The average PPI claim is for around £2,700, with claims management companies receiving, on average, around 25% of that. The economics of the industry are clear: a single win can cover the cost of 3,125 live calls or 62,500 automated calls. That helps to explain the market in lead generation. We do not know the underlying figures, but it seems reasonable to assume that a significant proportion of calls are made by lead-generation companies, which work to collect data and potential leads for other companies, which then make the final sales call.
Guy Opperman
The hon. Gentleman is dealing eloquently with the economics of the process. Does he accept the proposition that the likelihood of our constituents taking calls between 9 o’clock at night and 6 o’clock in the morning is very limited? Does he agree that the Government could regulate against night-time calls, which are a waste of money for those companies, even if they put the auto-dial on and leave the building?
Mike Crockart
I agree entirely with the hon. Gentleman. I will go on to deal with the Information Commissioner’s Office guidance that covers exactly that problem.
The inquiry heard evidence that the low cost of making those calls means that there is no economic driver to undertake any initial targeting or research. Calls are so cheap that it is economically effective simply to dial telephone numbers in sequence. In comparison, with direct mail marketing there is a cost for delivering and returning badly targeted mail.
Having established the terrifying scale of the problem, it is clear that major reform is required, by Government and regulators, and by the telecoms and direct marketing industries. There is a need for major change, but there is also a danger of being paralysed by the necessary strategies, consultations, proposals and counter-proposals.
The all-party parliamentary group report published in October contains 16 recommendations. Ministers have a copy of it, but I should like to make the case for four areas in which urgent action is both necessary and possible, the first of which is a basic one relating to consent to receive calls and TPS registration. There are around 25 million landlines in the UK, of which 19 million, which is around three quarters, are registered with the TPS. There are 71 million mobile phones—more than the number of people in the UK—and many are similarly registered with the TPS. Each and every day, however, there are more than 2 million nuisance calls and texts.
First-party consent should override TPS registration. Maintaining a direct relationship with customers is key to any company and is valued by many of those customers. Nothing in the report seeks to limit contact when it benefits both sides and is properly consented to. However, third-party consent is a grey area. It is commonly referred to as, “Carefully selected third parties or trusted partners,” which could just as easily mean, “Any company that is willing to pay for your details.” Sometimes, if people say, “I am TPS registered,” it is enough to end the calls. Even then, a breach of the regulations has happened. However, companies often argue that people have given permission at some point in the dim and distant past. In all conscience, who can ever say completely confidently that that cannot be true?
I am sure the Minister will argue that the ICO guidance is in place, so action is not needed. If every company adhered to the excellent guidance, he would be right, but they do not.
Mike Crockart
I believe the expression is: you might suggest that, but I could not possibly comment.
Guy Opperman
Is not the point that the customer is effectively being charged and required to take action that the company should be taking without such a charge?
Mike Crockart
That is an excellent point, and one I will come to very shortly, as my final point, I promise.
Returning to Warren Buckley’s comments, I presumed it was difficult because other companies did different things, making it harder to ensure consistency, so I looked at what TalkTalk did. It has a product called “last caller barring”. To use it, the customer dials 1425, and confirms by dialling **, after the number they want to block has called. It sounded remarkably similar to BT, so I went to Sky where its calls feature summary says that Sky has last caller barring, but it costs £3.55 a month. To bar a number following a call, one has to dial—gosh!—14258 followed by **. Exactly what I want is already here; it is just that the telecoms companies are doing it independently and charging for it. It should not be that difficult to take this issue forward. I say to Ministers that some in the industry will say that doing this is too difficult, too technical and too costly, but I hope they that will not be distracted or dissuaded. The companies are doing this already, but charging for it. They should not be allowed to get away with it.
Finally, let me deal with helping our most vulnerable consumers. Right now in the UK, 100,000 people are being targeted over and over again by fraudsters. Their names and numbers appear on a “suckers list”, which is sold at premium rates among the criminal community. If criminals were repeatedly targeting these people by breaking into their homes, there would rightly be an outcry, and action would surely follow. Because they are being targeted by phone, however, we seem content to stand by and make excuses—excuses such as “All moneys collected from fines must be returned to the Treasury Consolidated Fund”—that means £2.36 million since 2010—or “We do not have the authority to establish a fund or a direct industry to do this”, or “Spending is severely restricted across Departments”.
As I mentioned, pilot schemes by trading standards in Angus, East Dunbartonshire and East Renfrewshire council areas saw call-blocking technology installed on vulnerable consumers’ domestic phone lines. The results of the trial show that up to 98% of nuisance calls were blocked, giving those people significantly better control over their lives and their safety. In its report, “Mind the Gap”, Age Scotland has called for this scheme to be rolled out nationwide, and I agree. We are not talking about a huge number of people or a huge sum of money, so I issue a challenge today— and not just to Government, but to local authorities, telecoms providers and manufacturers of call-blocking technology. Surely together, we can find the resources to protect these most vulnerable people in our society. I can always press delete or hang up for another few months until regulations are tightened or behaviour is improved, but unless we act, someone’s mother or grandfather will lose their life savings tomorrow.