Select Committee on Regulatory Reform Twelfth Report


4 Purpose of the proposal

13. The general purpose of each of the proposals is to make the process of making legitimate contracts for directory entries less onerous for the directory publishing industry and their customers, whilst at the same time continuing safeguards and protections for actual and potential advertisers in directories against rogue publishers.

Proposal A: repeat or renewed entries in directories

14. Proposal A would disapply the present requirements in section 3 of the 1971 Act so as to permit renewed and repeat directory entries to be agreed more easily in circumstances where various specified conditions apply. These conditions are:

a. Restrictions on parties to the publishing contract

Where the identity of the publisher of the directory concerned has changed, the publisher and advertiser must either have entered into a novation agreement[4] updating the original contract, or the new publisher must have supplied the advertiser with notice of the following:

i.  His name

ii.  The fact that the directory will be published henceforward by him

iii.  The fact that the previous and new contracts are made between different parties.

b. Time intervals between the publication of directories

If the directory is paper-based, the previous edition in which the purchaser's entry appeared must be either the last edition of the directory or the last edition but one and the interval between publication of the two editions in which the entries appear for this purpose must be no more than 13 months.

If the directory is published in electronic form, the renewed contract must require first publication of the later directory entry not more than i) 13 months after the publication date of the previous entry of the directory or ii) the period during which the earlier contract subsisted (whichever is shorter). Electronic directories are continually updated as they operate and therefore the concept of the 'edition' of the directory is adapted to refer to the duration of the contract for displaying the directory entry.

For both paper-based and electronic directories the proposal therefore limits the use of the simpler renewal procedure to no later than 13 months after the fulfilment of the earlier contract.

c. Restriction on detrimental alterations to the directory

The form, content or distribution of the new directory must either be materially the same as the earlier version or be an improvement on it, as a reasonable person would judge it.

d. Restriction on detrimental changes to the entry

The form and content of the advertiser's entry in the directory must be materially the same or an improvement on the previous entry, as a reasonable person would be judge it. The Department notes that this would prevent such undesirable changes as, for instance, reducing the size of the typeface in the entry.[5]

e. Procedure for seeking approval to the publication of renewed directory entries where this was provided for in the original contract

An agreement to purchase a directory entry may provide that the advertiser will agree to the publication of a further directory entry. In that situation the directory publisher may only use the repeat procedure where i) he has first written to the advertiser giving notice of the cost of the new entry, the date on which the new contract will come into force and the fact that the advertiser has 21 days within which to withdraw his consent to the renewal ii) the advertiser does not withdraw within 21 days.

Proposal B: telephone authorisation for directory entries

15. The second element of the proposal addresses the issue of the authorisation of entries in directories over the telephone. This is not presently permitted under the 1971 Act. The Department considers that the law should be changed for the reason that in modern business it is quite normal for contracts for many services to be agreed over the telephone and, provided the customer is supplied with all the information necessary to make an informed decision and feels happy to proceed to payment via his debit or credit card, there is no reason why this option should not be available to directory publishers and their clients, as it is in respect of the purchase of other goods and services. Providing that contracts of this kind can be concluded over the telephone is seen by the Department as removing unnecessary regulatory burdens from both directory publishers and advertisers.[6]

16. Under the proposal, the making of an agreement to publication of a directory entry by telephone is conditional on i) the advertiser or his representative being provided, during one or more telephone conversations, with the information specified in paragraph 11 above and ii) the entry being paid for by means of a credit or debit card. The information which it is proposed the publisher must provide to the purchaser in the course of telephone discussions is the same as that which the 1971 Act presently requires a publisher to provide in the context of electronic communications for a directory entry.[7]

17. The Department indicates that there is some uncertainty as to what provisions lay down the information requirements for notes of agreement to publish directory entries. Section 3(3) of the 1971 Act was amended by the Unsolicited Goods and Services (Amendment) Act 1975 which provided for those details to be laid down in Regulations. This was done in the Unsolicited Goods and Services (Invoices etc) Regulations 1975 but there is doubt whether these amending provisions ever came into force.[8] The proposal would have the effect of clarifying the law and establishing without ambiguity the requirements for the form and content of notes of agreement.

Proposal C: simplification and extension of documentary requirements

18. The Department at paragraphs 41 to 45 of the explanatory statement describes how the proposed Order contains a third supplementary aspect which continues in amended form some of the provisions contained in the 1975 Regulations. The purpose of these Regulations is to specify the form in which invoices or related documents must be produced if they are not to be regarded as asserting a right to payment under the 1971 Act. As has been discussed at paragraph 10 above, it is an offence under the 1971 Act without reasonable cause (i.e. without good reason to believe that the authorization requirements of the 1971 Act have been met) to assert a right to payment for an entry in a directory. In order that confusion be avoided and that directory publishers will not through inadvertence commit these offences, the Regulations require that all communications specifying the cost of potential directory entries bear the statements "THIS IS NOT A DEMAND FOR PAYMENT THERE IS NO OBLIGATION TO PAY. THIS IS NOT A BILL".

19. The Regulations presently exclude the possibility of providing information about the cost of a contract for a directory entry by means of electronic documents because the relevant specifications are ones which can only be met by paper documents (such as the specification of the permitted distances in millimetres between the text of the document and the edge of the paper on which it is printed). The substance of the third aspect of the proposal is therefore to modernize and simplify requirements presently in the 1975 Regulations so that electronic documents may be used and can comply with the requirements to avoid being regarded as asserting a right to payment.

20. The third element of the proposal is therefore to repeal Section 3A of the 1971 Act and to provide in the Schedule to the Order a simplified and modernised provision to govern the form of documents sent to their customers by directory publishers.


4   Novation occurs where the parties to the original contract agree with each other and a third person that the latter will replace one of the original parties. Back

5   Explanatory statement, paragraph 31 Back

6   Explanatory statement, paragraph 36 Back

7   Explanatory statement, paragraph 58 Back

8   Explanatory statement, paragraph 39 Back


 
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