Under the new Communications Act 2003, Oftel (to be part of Ofcom come January 2004) is empowered to levy fines of up to £5,000 for misuse of telecommunications networks. A new ‘Statement of Policy’ sheds light on how Oftel proposes to exercise these powers.
Topic: Telemarketing
Who: Oftel
Where: London
When: Late August 2003
What happened:
The Communications Act 2003 gave the Office of Telecommunications (Oftel which from January 2004 will be part of Ofcom) the power to take action against any persons who persistently misuse telephone networks.
If such cases come to the attention of Oftel/Ofcom they can impose fines of up to £5,000 for such misuse, even though the practice in question might drop short of being contrary to data protection legislation or constituting a criminal offence under existing measures such as the Malicious Communications Act 1998 as amended by the Criminal Justice and Police Act 2001, which criminalizes communications made with intent to cause distress or anxiety.
There was some uncertainty as to how far the new Oftel powers were to extend and the particular practices against which Oftel might contemplate regulatory action. Much of this uncertainty has now been dispelled by Oftel's release of a Statement of Policy on 28 August 2003.
The policy statement clarifies that the new powers can be exercised against persistent misuse by way of telephone calls, SMS, e-mail or any other form of misuse perpetrated by means of an electronic communications network or service.
The statement helpfully give some examples of the types of 'persistent misuse' on which Oftel anticipates training its guns, though it emphasises that that these are illustrations only, and the new powers allow the taking of action in any case where the conduct in question has the effect or likely effect of causing another person unnecessarily to suffer annoyance, inconvenience or anxiety.
The six particular examples mentioned are misuse of automatic calling equipment, misuse by making silent or short duration calls, number-scanning, misuse of calling line identification facility, misuse for dishonest gain and misuse of allocated telephone numbers.
The policy statement reminds us that the first area, misuse of automatic calling equipment, is already caught by the Telecommunications (Data Protection and Privacy) Regulations 1999. Under these regulations it is an offence to use 'ACE' to make unsolicited direct marketing calls. An example of such a call is a recorded message where no operator is present. A similar provision, where again the call does not consist of live speech, is included in the UK regulations designed to implement the EU Privacy and Electronic Communications Directive, due to be in force in the UK on 11 December 2003.
Here the Oftel statement emphasises that the concept of direct marketing that the 1999 regulations and the new privacy regulations rely on is very broad and applies not just to the advertising of goods and services but also to the promotion of an organisation's aims and ideals, thus extending to the political and charitable sectors.
The statement comments that there may be cases where, for whatever reason, the practice in question is not caught by the 1999 regulations or the new privacy regulations, but still cause annoyance or inconvenience. In such cases Oftel/Ofcom will consider exercising its new powers.
So far as misuse by making silent or short duration calls is concerned, the statement cites the example of calls arising from the use of power diallers or ACE within contact centres. Here calls are automatically generated but in the absence of an operator to speak to the called party, the call is abruptly terminated. There is no malicious intent here, but clearly there is potential for causing annoyance, and the statement encourages properly run call centres to strive to ensure that they do not generate more calls than their operators can handle. Persistent failure to do so may lead to the issue of a 'notification' under the new regulations.
These 'notifications' will be issued by Oftel (or Ofcom after December 2003) where it has reasonable grounds for believing that a person has engaged in persistent misuse of a network or service. In this connection, Oftel unsurprisingly anticipates that representations made by consumers will be one of the most likely ways in which instances of persistent misuse are brought to its attention.
Upon receipt of the notification the alleged misuser will have the opportunity to make representations. The time for doing this may be up to a month but could in urgent cases be as short as seven days. Once the period for representation has expired, Oftel has three options.
It can issue an enforcement notice requiring the user to take the necessary steps to end the misuse and not repeat it and to remedy the consequences of the misuse. In this connection a misuser may be required to pay the person who has suffered the effects of misuse an appropriate sum of money. In determining what is an appropriate amount in the circumstances of a particular case, Oftel may take account of how much is required to provide compensation for the loss and damage suffered and/or for the annoyance, inconvenience or anxiety experienced. Oftel does not propose to publicise a 'tariff' of compensatory payments and anticipates that over a period of time a scale will be developed that can offer a degree of expectation. Here Oftel accepts that there may be many cases where there is no actual pecuniary loss caused as a result of the practice, for instance, silent or short duration calls, but there will be a degree of annoyance, inconvenience or anxiety present which should be properly compensated.
The second alternative to issuing an enforcement notice is the imposing of a penalty under Section 130 of the Act, the upper limit for which is £5,000. Relevant factors in determining where on the scale the penalty should be will include the degree of persistency, the number of people exposed to the misuse and its seriousness. On the question of the numbers of people exposed to the misuse, Oftel does not anticipate that a 'percentage' approach will be appropriate. Where a large call centre generates, say, two hundred short duration calls a day, it will not be a mitigating factor that these calls represent only three percent of the calls centre's output. This will be little comfort to the individuals who receive the offending calls.
The third alternative consequence of a notification, after the period for representation has expired, will be a 'double whammy' of the first two, namely both the issuing of an enforcement notice and the imposition of a penalty.
Why this matters:
Up until now, burgeoning regulations affecting UK direct marketing practices have not been matched by the ramping up of equivalent enforcement machinery and sanctions. Time will tell whether these new powers, which could extend to activities such as 'spam', persuade marketers to take more seriously the ever increasing array of regulations that impact on their activities.
The Oftel policy statement can be accessed here.
