When: 27 February 2014
Law stated as at: 6 March 2014
Telecommunications regulator OFCOM published its quarterly update on consumer complaints on 27 February.
Key trends – Complaints handling
This time last year, OFCOM’s report revealed a dramatic spike in complaints (reported in Marketinglaw here) in particular with reference to silent and abandoned calls and the lack of use by marketers of the UK’s “do not call” list maintained by the Telephone Preference Service (“TPS”).
One year on, Marketinglaw looks at how things have changed.
Silent and abandoned calls
It seems clear that the area of silent calls continues to be an issue. These are mostly the result of telemarketers using “predictive dialler” technology, which automatically dials numbers, then matches up a call-centre agent with the recipient when the phone is picked up. The aim is to maximise the amount of time call centre agents spend speaking to consumers, however problems arise if there is no call centre agent available to take the call.
This results in the consumer hearing silence, which can cause recipients distress and lead to complaints to Ofcom, who under s. 127.2 of the Communications Act 2003 has the power to impose fines of up to £2m.
Ofcom’s report from this time last year showed that between December 2012 and January 2013 complaints jumped from 1788 to 2398. This year’s report shows in a graph on page 6 that following a peak of 3900 complaints in April 2013, the overall trend for complaints in this area has been one of bumpy decrease. By December 2013 this figure had more than halved, with only 1704 complaints recorded.
However, January saw this figure rise again to 2507, higher than in January 2013.
Ofcom and the UK Information Comissioner’s Office (“ICO”) published an update to their joint action plan for tackling nuisance calls and messages on 3 March 2014. In this update Ofcom highlights that abandoned and silent calls are being made by a large number of organisations, each generating a relatively small number of complaints. This makes enforcement a challenge, as does tracing the source of such calls, given that organisations making the calls often choose to withhold their number or present an invalid phone number.
Ofcom continues to look into how it can address silent calls and is currently investigating Redress Financial Management Ltd, trading as Redress Claims, for an alleged excessive number of abandoned calls between 15 August and 15 November 2012. It also has taken informal enforcement action against 25 organisations following consumer complaints, which has led to complaints against 16 of the 25 numbers in question to cease and 6 to reduce “significantly”. The remaining three cases are the subject of “ongoing” work.
On a technical side, the regulator is working with the ICO and industry to improve its call-tracing capabilities. Ofcom has also met with the US Federal Trade Commission (“FTC”) in November 2013, in order to discuss approaches to cracking down on number spoofing.
Going forward, the regulator will be teaming up with the FTC, the Canadian Radio-television and Telecommunications Commission (CTRC) and the Australian Communications & Media Authority (ACMA), to “explore technical, regulatory and law enforcement approaches to caller ID spoofing”.
Prohibited unsolicited marketing calls
Conversely, marketers’ use of the UK’s “do not call” list appears to have improved. Last year, we reported a significant increase in complaints in this area between December 2012 and January 2013, with complaints near doubling from 4962 to 9498. The TPS felt that this may have reflected increased marketing activity by companies offering help with payment protection insurance mis-selling claims. Calling consumers who have registered with the do not call list is a breach of the Privacy and Electronic Communications (EU Directive) Regulations 2003 (“PECR”).
While improvement in this area has been somewhat bumpy, complaints have certainly fallen – from a peak of 10,373 complaints in February 2013 to 4,826 as of January 2014. Some of this may be the usual Christmas and New Year dip, but year on year it does appear that the large increase in complaints appears to have been reversed.
Ofcom and the ICO will continue to work together in this area, and have been working with government on proposed changes to the regime governing nuisance calls, as reported on Marketinglaw, for example, the recent report of the Culture Media and Sport committee and the All Party Parliamentary Group’s report on unsolicited marketing.
Also, in July 2013 the ICO presented a business case to the Department for Culture, Media and Sport setting out reasons why remedies under PECR should be improved. At present, civil monetary penalties can only be obtained by a consumer if they can show “substantial damage or distress”, and the ICO would like to see this threshold lowered to something like “irritation and nuisance” to act as a better deterrent to advertisers, a move supported by Which? and, it appears from recent pronouncements, by Coalition Minister of State for Justice and Civil Liberties Simon Hughes.
Why this matters:
The spiralling numbers of complaints of this time last year seem to have reduced, but it is clear that work remains necessary, particularly on silent and abandoned calls and prohibited unsolicited marketing.
Key will be whether a reduced threshold for up to £500,000 DPA/PCRs monetary penalty notices is introduced but it remains to be seen whether this becomes a reality and whether legislative draftsmen can come up with workable language for an “irritation and nuisance”-based test.