It’s not just cookies, email, fax and mobile marketing that the new Privacy and Electronic Communications Regulations due in Autumn in 2003 have in their sights.
Who: The Department of Trade and Industry
When: March 2003
The DTI published its consultation document on the implementation of the EU Directive on Privacy and Electronic Communications. The new Regulations are due to come into force 31 October 2003, so the DTI wants comments on the consultation document by 19 June 2003 and plans to publish the final regulations in August. The current proposed title for the new regulations is "The Privacy and Electronic Communications (EC Directive) Regulations 2003" ("PECRs").
Separately on marketinglaw.co.uk (M Commerce) we focus on the implications of the PECRs for the marketing use of location data and SMS marketing. Here we look at relevant aspects for telephone selling other than by way of mobile SMS/MMS.
Firstly, there is the use of automated calling systems for direct marketing purposes. Currently the legal position here is that under the 1999 Telecommunications (Data Protection and Privacy) Regulations, this is an "opt-in" situation. However, there are questions over the ambit of the rule. These will be clarified by the new PECRs in that the regime for marketing SMS will be the same as for marketing e-mail (see separate piece on marketinglaw under "e-mail marketing"), whilst the use of automated calling systems for sending recorded messages by telephone will now clearly be covered by Regulation 18 of the PECRs (assuming they remain in their current form) and the regime here will be statutory "opt-in". In other words, before using such means to make calls to subscribers, whether individuals or corporations, the sender must have in its possession a clear record of the recipient of the call having previously opted in to receive such calls.
As regards "power diallers", namely the use of automated calling systems to make contact with the recipient, whereupon there will be real time person to person communication, there are two aspects. First of all, the making of such calls will be illegal if the recipient has previously "opted out" of receiving such calls. This will be possible by way of a specific request to the sender of the call or by way of registration on a central register (currently the Telephone Preference Services Register operated by the Direct Marketing Authority).
The other aspect is that where power diallers create a nuisance, the DTI consultation document proposes to give OFCOM new powers to regulate this under the up and coming Communications Act. This will be done by way of the creation of a new offence of "The persistent misuse of communications networks". This will enable OFCOM to take action against any marketer who uses systems in a way which causes avoidable nuisance, annoyance or anxiety. If the wording remains couched in this way, marketers using other channels such as e-mail may well have cause to consider its provisions!
So far as non-automated telephone marketing is concerned, the EU directive on which the PECRs are based gives EU member states the option of either an op-in or opt-out regime. Currently in the UK, the regime is statutory opt-out for calls to individual subscribers. Those wishing to make such calls are legally obliged to check first with the list of those who have opted out of receiving such calls kept by the Direct Marketing Authority as part of the Telephone Preference Service.
Here, the DTI proposes to continue with this regime under the new PECRs. Where it proposes a change, however, is in the area of calls to corporate subscribers. Here it suggests that corporate subscribers should also have the right to register with the Telephone Preference Service or opt-out on a case by case basis by communicating with the marketer in question.
The DMA has hit out at this plan branding the scheme unworkable. The DTI says that it is not currently acceptable for small businesses who receive large numbers of unsolicited marketing calls to be unable to opt-out of suffering this nuisance.
There are other related provisions in the new regulations as drafted. For all telephone marketing, whether using power diallers, automated calling systems or single calls person to person, the communication must include the name of the person making the call and either that person's address or a telephone number on which he can be reached free of charge. Although it is not clear, one assumes that the term "person" here refers to the "legal person" involved, in other words the company on whose behalf the call is being made as opposed to the name of the individual actually making the call. It must also be borne in mind here that under the Consumer Protection (Distance Selling) Regulations 2000 there is an existing legal obligation on those making marketing calls to disclose the identity of the marketer and the purpose of the call at the beginning of the conversation.
Separately, though subscribers must under the new regulations have the ability to prevent their identity being shown at the other end of the line when they make a call ("Call Line Identification" or "CLI") together with the option of rejecting calls where the caller has withheld CLI, Regulation 14 enables network providers to override this repression of CLI on a call in order to trace the source of a nuisance or malicious call at the request of a subscriber and to pass the result of that search on to the appropriate authorities.
Why this matters:
Perhaps the most important of the changes foreshadowed here is the proposed extension of telephone marketing opt-out to corporate subscribers. One anticipates the DMA will lobby hard against this extension. It is also worth noting a couple of other aspects which could be of crucial relevance. First of all Regulation 24 of the draft rules provides that to the extent that any term in the contract between a subscriber to a service and the service provider would be inconsistent with the requirement of its regulations that shall be void. In other words, telephony and telecommunications services providers cannot create a more liberal regime for themselves by way of the subscription contract.
Separately, there is nothing in the draft PECRs dealing with the extraterritoriality of their application. However, the DTI and its consultation document accept that the directive on which the PECRs are based does not apply outside the European Union. Accordingly, call centres based for example in India will not themselves be bound by the PECRs. However, most of the relevant rules in the draft PECRs apply not only to those who actually make the direct marketing calls or send the marketing SMS or e-mail, but also to those who "instigate" that process. This means that it will be critical for marketers to ensure that in all their contracts with call centres and other similar marketing services providers based outside the UK or any other EU country, to ensure not only that the contract places the same or tighter obligations on the service provider than those contained in the new PECRs but also that the marketer has all necessary powers to monitor achievement of the required service level and compliance obligations.