Nuisance Calls

Debate between Mike Crockart and Lord Stunell

Thursday 16th January 2014 Commons Chamber

[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.

[Sir Andrew Stunell (Hazel Grove) (LD)]

Does my hon. Friend agree that, if every company were well behaved, we would not need a regulatory system at all? The point of the regulator is to deal with those who are unscrupulous or careless.

[Mike Crockart]

I agree entirely, and I am glad my right hon. Friend used the word “careless”, because carelessness and the ease of making calls without having to think too closely about the regulations cause much of the problem.

The regulations are in place and the guidance is excellent. A document issued by the ICO tells companies what to do. It states:

“Organisations can make live unsolicited marketing calls, but must not call any number registered with the TPS unless the subscriber (ie the person who gets the telephone bill) has specifically told them that they do not object to their calls.”

“Specifically” is the word, and the guidance seems straightforward. Hon. Members might think that it makes it clear that companies should not make calls in those circumstances.

The document also provides a checklist with an example of best practice, which states:

“Make sure your privacy notice is clear, honest and will be understood by the people it is aimed at. Avoid confusing mixtures of ‘opt-ins’ and ‘opt-outs’. Do not pre-tick consent boxes.”

Not only small, fly-by-night fraudulent companies ignore that guidance. I did a small survey yesterday of some well-known companies. Unfortunately, as expected, the reality is very different. Companies ask us in a multitude of ways to give our consent to be contacted. TalkTalk has a pre-ticked box for giving first-party consent, but there is an unticked box, which is better, for giving third-party consent. Virgin Media is confusing because its question combines first and third-party consent in one box, which defaults automatically to opt-in. As hon. Members would expect, John Lewis is much better. It excellently uses plain language on all its boxes and there is a separate box for each type of contact—e-mail, mobile or landline. Unfortunately, all the boxes are defaulted to opt-in.

I went to BT’s site and looked at buying a phone. Unfortunately, BT had nothing relating to first-party consent—there was no box to opt out or to opt in. The third-party consent option was defaulted to blank, meaning it was not defaulted to opt-in. I wondered about that, so I followed an obscure-looking link to its privacy policy, which states:

“Unless you tell us not to we assume we have your permission to tell you about BT products and services we think you might be interested in, we won’t send you marketing messages if you tell us not to.”

The way that one has to tell them not to, however, is by opting out when one receives them

“so you can opt out when we call you as part of a telemarketing campaign, you can opt out when we email you as part of a email marketing campaign, or you can write to a freepost address.”

That is absolutely not in tune with the guidance issued by the ICO. With such a confusing range of options, it is no wonder that consumers do not know what to tick or what they have consented to.

I will turn now to the level of proof expected by the ICO when presenting cases relating to nuisance texts. This should not take long, as the Government recently announced their willingness to lower the threshold, although they have not specified what the new level of detriment will be or when the change will be implemented. By reducing the level of detriment from “substantial damage or substantial distress” to “annoyance, inconvenience or anxiety”, it would align the threshold with that expected of Ofcom in silent call cases.

The recent decision by an appeals court judge to overturn the fine that ICO issued to Tetrus late last year demonstrates exactly why this section is crucial. Tetrus had been engaged in sending unwanted text messages on an industrial scale, sending hundreds of thousands of texts every week from unregistered SIM cards that seek out potential claims for mis-selling of PPI or accidents. Tetrus did not make any effort to show that the recipients had given consent, or that they retained records of consent. It did not even register with ICO under the Data Protection Act 1998 as a controller of data.

For 10 years, it has been unlawful to use text messages for direct marketing unless the recipient has either asked for, or consented to, the communication. While the Criminal Justice and Immigration Act 2008 gave ICO the power to impose monetary penalties of up to £500,000, there are certain preconditions. First, the contravention must be serious and it must also be

“of a kind likely to cause substantial damage or substantial distress.”

The appeals judge unfortunately decided to overturn the £140,000 penalty, as there were problems with the words “likely” and “substantial distress”. The judge ruled that the effect of the text messages was likely to cause

“widespread irritation but not widespread distress.”

That is an extremely worrying judgment that effectively gives a green light to any spam texter to send thousands—perhaps hundreds of thousands—of unsolicited texts, as long as they are careful not to use distressing wording. That seems to be the only point in the judgment on which there is a point of debate. If nothing else I say today is accepted, movement on this issue would be welcome.

My next point is on industry action and on those industries involved in making calls. Many of the calls sent by Tetrus were attempting to generate leads for claims management companies. Those companies are now regulated by the claims management regulator. I mention that only to point out that it is a good example to follow. Claims management texts are on the wane and there is a reason for that. As a condition of the authorisation of a claims management company, they must

“comply with the Conduct of Authorised Persons Rules 2013.”

I have a copy here and I need only read 30 words from this excellent document, because they say:

“Cold calling in person is prohibited. Any other cold calling, by telephone, email, fax or text, shall be in accordance with the direct marketing associations’ direct marketing code of practice.”

Those 30 words will hopefully have effectively dealt with texts from CMCs, because if their registration depends on abiding by the rules, it is amazing how the mind can be focused. That is why, when the Select Committee on Business, Innovation and Skills was writing a report into payday lenders, I managed to sneak a recommendation into it. It said:

“We recommend that the FCA…discusses with the Information Commissioners Office…to establish the extent of bad practice”—

in the area of direct marketing.

“We…recommend that the FCA devises and issues a guidance note for payday lenders along similar lines to that established by the Claims Management Regulator in its Marketing and Advertising Guidance.”

The problem here is that we should not have to do it piecemeal—bit by bit, for each sector of industry. We should be able to set that at ICO level, where we are dealing with the method of making those calls.

--- Later in debate ---

[Sir Andrew Stunell]

Does my hon. Friend agree that if the telephone companies are receiving the revenue from 1 billion nuisance calls a year, there is little incentive for them to throttle that profitable supply of calls?

[Mike Crockart]

I believe the expression is: you might suggest that, but I could not possibly comment.