Just as ICO serves enforcement notices on 2 security companies for telemarketing offences, the very next day BIS publishes confirmation that the fines for making silent calls will increase from £50,000 to £2 million. Zoe Hare investigates the new crackdown on poor telemarketing practices.
Who: Department for Business Innovation & Skills and the Information Commissioner's Office
When: March 2010
Law stated as at: 23 April 2010
On 22 March 2010, the Information Commissioner's Office ("ICO") announced that it had served enforcement notices on two security companies, SAS Fire & Security Systems Ltd and Direct Response Security Systems Ltd, as a result of unsolicited marketing calls being made by telemarketers for the companies, in breach of the Privacy and Electronic Communications Regulations.
Consumers had been contacted by the companies without their prior consent, even though the consumers were registered with the Telephone Preference Service ("TPS") or had previously asked not to be contacted for marketing purposes. Understandably, numerous consumers complained to the TPS, which in turn referred the complaints to the ICO.
In its press release, the ICO confirmed that it had previously contacted the companies, advising them to stop making unsolicited marketing calls. It therefore appears that stricter measures, such as the enforcement notices, were necessary to protect the privacy rights of individuals and stop the calls.
It remains to be seen whether this second, more severe warning will have any impact on the companies involved. However, given that failure to comply with an enforcement notice is a criminal offence, one would hope that the companies will heed the advice and take the protection of individuals' privacy rights more seriously in future.
Increased penalties for telemarketers get closer
Interestingly, the very next day, on 23 March 2010, the Department for Business Innovation & Skills ("BIS") published the Government's response to its consultation entitled "Raising the maximum penalty for the persistent misuse of an electronic communications network or service".
The consultation, which opened on 26 October 2009, was aimed at tackling the problem of silent and abandoned calls to consumers, by increasing the level of fines to £2 million. This followed a request from Ofcom to increase the maximum penalty it can impose.
In the original consultation document, BIS welcomed stakeholders' views on whether the level of penalty should be increased from the current £50,000 level. Of the 126 responses received from consumers, companies, organisations and telecoms service providers, there was considerable support for increasing the level of fine to £2 million.
Although this is a substantial increase from the previous level, it seems that Government and stakeholders are both committed to deterring persistent offenders from making silent and abandoned calls to consumers. Accordingly, the Government will be amending the legislation in place to enable Ofcom to impose £2 million fines.
It is anticipated that the new level will give Ofcom the ability to be more effective in enforcing the regulations in place and tackling an issue which is of great annoyance to consumers. Indeed, in its initial request to BIS, Ofcom asserted that the current level was not high enough to represent a real sanction or be an effective deterrent to persistent offenders. Hopefully, the new penalty levels will change this.
Why this matters:
Many companies use marketing calls as a way of promoting and advertising their business and services offered. Consequently, advertisers and marketers must be aware of the rules in place.
As these cases show, both ICO and Ofcom are not afraid of using their powers to enforce the rules. Therefore, companies engaging in telemarketing must be careful not to make unsolicited or abandoned calls. In particular, given the heightened level of fines which Ofcom can now impose, companies should ensure that any calls made to consumers are not abandoned.
However, that being said, the ICO cases and new BIS rules do not appear to have an impact on non-silent calls where the consumer has not opted-out of receiving marketing information and is not registered with the TPS. It remains to be seen whether there are any future developments which will affect this type of marketing.