6 Enforcement
Tracing calls
52. Enforcement action against senders of nuisance
calls and texts is hampered by difficulties in identifying transgressing
companies; many callers present invalid telephone numbers or evade
contact with regulators (including not answering their own phone).
Call tracing is particularly difficult when calls are made over
the internet and is not easy when a chain of different telephone
networks is involved.
53. On practical measures to stop nuisance calls,
the TPS told us that a "telco" cannot currently trace
a call that originates with a different service provider. "The
most important thing that telcos could do to assist in the fight
against nuisance calls would be to collaborate on a way of tracing
the organisation which instigated a call in breach of the TPS
rules, whether a CLI [calling line identification] was presented
or not. The telcos could then report this information to the
appropriate regulator."[60]
54. We learned that BT Wholesale is contributing,
with Ofcom, to the establishment of an "interconnect"
group that will be chaired by the Office of the Telecoms Adjudicator.[61]
The group will be looking at what commercial or regulatory arrangements
could be put in place to support the telephone call tracing process
and to make sure communications providers comply.
55. David Hickson, Fair Telecoms Campaign, told us:
"One important point to remember is that in the telephone
networks—and I know you have BT coming in later and they
will probably confirm this—there is the capacity to trace
every call. If it is important enough, it will be traced. As I
understand it, every call to 999 is automatically logged and traced."
[62]
He did acknowledge that there might be reasons why BT have to
ration such a call tracing facility.[63]
Warren Buckley, Managing Director, Customer Service, BT, told
us that "broadly speaking" a call made in the UK can
be traced. He added: "If it has been genuinely made, even
if the number has been withheld, we have the ability to trace
it. The challenge we have at the moment is that we are restricted
by regulation when we use those facilities."[64]
BT has a legal right to trace 999 calls but, in the case of calls
received by its own nuisance call bureau, "if we want to
trace a call we would only do so under a court order or if we
are working closely with the police and so on."[65]
56. Service providers should put systems in place
to facilitate the tracing of nuisance calls, something that is
routine for emergency 999 calls. Making such a facility widely
available may, we acknowledge, be subject to some resource constraints.
While it will clearly not be possible to go after every transgressor
that is no justification for a continued failure to take enforcement
action on a scale that will provide an effective deterrent.
Regulators' resources
57. Some of our witnesses questioned the credibility
of enforcement action by the relevant regulators and their resources
to see it through. Richard Lloyd of Which? told us:
Part of the problem that the ICO has is that
it is required to whack them with a proportionate fine and they
then have the problem, as an enforcer using its powers anew, of
making that fine stick. There are firms that have been hit with
a fine and have not paid yet, I understand. There is a real issue
about the credibility of the enforcement action that the ICO is
able to take as well as how much evidence it needs to be able
to take that action in the first place.[66]
58. According to Claire Milne, Chair, Consumer Forum
for Communications, the two main regulators, the Information Commissioner's
Office and Ofcom, appear to have fewer than 20 full-time equivalent
staff members between them to deal with many thousands of complaints
a month and many hundreds - at least - of potential miscreants.[67]
Citing research by Ofcom, she told us:
But we are not going to get perfect enforcement
for the simple reason, on top of the things that have already
been mentioned, that there is a very large number of companies
in this direct marketing game. This is something that the recent
research by Ofcom has illustrated very clearly. As you probably
know, they have a large panel of people who keep notes over a
four-week period of all the calls they receive that they do not
want and who they are from. Only a small proportion of the nuisance
calls came from a small number of companies, and this has been
backed up by evidence from elsewhere too. The regulators are not
staffed to go after this enormous long tail of small offenders.[68]
59. David Hickson was critical of both the Information
Commissioner's Office and Ofcom. He claimed that "the nature
of the action that is required is foreign to the way in which
both organisations operate in general,"[69]
though he acknowledged that the number of nuisance calls was well
beyond the capabilities of the regulators to deal with effectively.
Strengthening regulation
60. At the end of July, the Information Commissioner
submitted a detailed business case for amending PECR to the Department
for Culture, Media and Sport (DCMS). The focus of the business
case is on amending PECR to enable the Commissioner to impose
a civil monetary penalty of up to £500,000 in relation to
contraventions likely to cause "nuisance, annoyance, inconvenience
or anxiety". This is a lower threshold than the "substantial
damage and distress" that currently applies and which the
ICO interprets in a way that might be vulnerable to legal challenge
(unless PECR is amended). The ICO evidence asserts: "This
change would ensure that the penalties available meet the criteria
of 'effective, proportionate and dissuasive' as required by the
E-Privacy Directive, from which PECR are derived."[70]
61. Which? have similarly called for the evidentiary
threshold to be lowered to "annoyance, inconvenience or anxiety".[71]
The Mobile Broadband Group (MBG) has also recommended that the
ICO be granted greater resources to pursue illegal spammers and
that the evidential threshold applied by the ICO and other enforcement
agencies be reviewed to facilitate prosecutions. MBG believes
this could be achieved by amending the Privacy and Electronic
Communications Regulations along the lines suggested by the ICO.[72]
We agree. The threshold for the Information Commissioner to
take enforcement action under the Privacy and Electronic Communications
(EC Directive) Regulations 2003 should be changed to cover telephone
calls or text messages likely to cause nuisance, annoyance, inconvenience
or anxiety.
62. Ofcom guidelines on what is expected of dialler
users include measures to: limit abandoned calls, help consumers
identify who is calling them and limit repeat abandoned and silent
calls. Abandoned call rates should not exceed 3% of live calls
made per call centre or per campaign (i.e. across call centres)
over any 24 hour period. The 3% limit on abandoned calls aims
to strike a balance between efficiency gains from using dialler
technology (which in turn may feed through into lower prices for
consumers) and consumer harm.[73]
63. While Ofcom does not deal with individual complaints,
it monitors such complaints and can investigate and take enforcement
action against organisations persistently misusing communications
networks. The maximum penalty is £2 million. Prior to 2010,
the highest fine Ofcom could impose was £50,000. The most
recent financial penalty for making abandoned and silent calls
given in Ofcom's evidence is one of £750,000 levied this
year against TalkTalk Telecom Ltd.
64. David Hickson alleged that Ofcom "tolerated"
silent calls, stating that "there have not been any cases
where Ofcom has taken action against those who terminate less
than 3% of their calls in silence." He added: "Ofcom
clearly does not want these powers and has no intention of using
them properly!"[74]
65. Penalties of up to £500,000 have been available
to the ICO since 2011. Evidence from the Information Commissioner
notes that available penalties have to meet the criteria of "effective,
proportionate and dissuasive" as required by the E-Privacy
Directive, from which PECR are derived.[75]
Edward Vaizey, Parliamentary Under-Secretary of State for Culture,
Communications and Creative Industries, told us:
The PECR regulations say that fines should be
effective, proportionate and dissuasive. I think the regulators
are referring effectively to a legal requirement under the directive
and, as you know, neither the last Government nor this Government
want to gold-plate directives, but they can be fined again and
again. I am not aware of a business model that would incorporate
quite substantial fines, particularly for persistent offenders.[76]
66. We recommend that individuals and organisations
who persistently make nuisance calls in breach of the Privacy
and Electronic Communications Regulations should have monetary
penalties repeatedly imposed. We do not consider it disproportionate
that such fines should threaten the continued operations of people
who ought not to be in business in the first place.
67. The Commissioner has issued statutory guidance
on what should trigger civil monetary penalties: "…if
damage or distress that is less than considerable in each individual
case is suffered by a large number of individuals the totality
of the damage or distress can nevertheless be substantial".[77]
Written evidence from the Information Commissioner articulates
a concern that the courts might overrule him on this at some point
unless the legislation is changed to lower the legal threshold.
68. As noted earlier, the Information Commissioner
has submitted to DCMS a business case to enable him to impose
a civil monetary penalty of up to £500,000 in relation to
contraventions likely to cause "nuisance, annoyance, inconvenience
or anxiety". This is a lower threshold than the "substantial
damage and distress" that currently applies.
69. Other tools available to the ICO range from early
engagement with potential nuisance callers to the issue of Enforcement
Notices; the latter require remedial action to be taken. Details
of the Commissioner's enforcement activity are published in quarterly
PECR enforcement activity reports; these include naming and shaming
organisations where appropriate.
Joint working
70. On 31 July 2013 the ICO and Ofcom launched a
joint initiative on tackling nuisance calls and messages, and
published a joint action plan. The key elements of this action
plan are:
- Ongoing, targeted enforcement action;
- Improving the tracing of nuisance calls and messages;
- Effective coordinated action including a review
of the impact of the Telephone Preference Service (TPS);
- New ICO guidance on consent;
- Updated consumer guides on nuisance calls and
messages; and
- New proposals for tackling nuisance calls.
71. Ofcom and the ICO intend to publish a progress
report on the joint action plan in early 2014. The Information
Commissioner is also leading the multi-agency operation LINDEN
which is looking into the relationship between lead generation
and unwanted marketing communications. Evidence from the Information
Commissioner adds: "This has enabled the Commissioner to
identify key intervention points and enforcement opportunities
for regulators and stakeholders and a joint delivery plan has
been compiled to shape and complete this activity."[78]
The ICO is also developing bilateral information sharing agreements
and enforcement opportunities with counterparts overseas.
72. The Government has told us it is "very encouraged"
that the ICO and Ofcom have now issued a joint action plan to
help drive forward improved enforcement in light of their specialist
knowledge in this area and "will monitor progress against
this action plan with interest."[79]
73. Evidence from the DCMS refers to the Government's
strategy paper, Connectivity, Content and Consumers, which
was published on 30 July 2013. The latter commits to some further
action and raises the possibility of further measures:
We want to see more joined-up action by regulators
to tackle this issue and welcome the joint Ofcom/ICO initiative
that will be announced in the summer. We will also legislate to
enable Ofcom to more easily share information about companies
undertaking such activities with the ICO and the Insolvency Service,
just as it does with other regulatory bodies such as the Office
of Fair Trading...
74. Allowing Ofcom to share information with the
ICO would require an amendment to section 393 of the Communications
Act. Which? told us that the ICO and Ofcom were now working together
more closely but that the current prohibition on sharing data
represented a problem.[80]
We welcome the Government's decision to amend section 393 of
the Communications Act 2003 to permit Ofcom to share information
with the ICO. We also appreciate the Government's undertaking
to implement this measure "as soon as possible", given
the careful consideration needed before any extension of data
processing powers.
75. BT is concerned that enforcement of both privacy
rules and the persistent misuse (PM) policy can sometimes take
far too long, allowing companies to change their names and numbers
to avoid being caught. BT told us that a "quick, effective
enforcement regime is required."[81]
BT considers that "the speed of action and the ability to
trace calls across different network providers is key."
Two sets of rules to tackle nuisance calls is also confusing to
consumers:
Companies breaching one set can often be breaching
the other too, e.g. no consent (under PECR), or no valid calling
line identity (CLI) displayed or recorded messages being left
on abandoned calls (under PM), and yet only one set of legislation
is used. Why not use both, especially if the ICO has more difficulty
in always having to prove distress?[82]
76. Ofcom should consider extending the application
of its persistent misuse powers to cover all direct marketing
calls. There is no reason why persistent abusers of the telephone
networks should not be hit twice.
A single regulator?
77. The Fair Telecoms Campaign has proposed[83]
the establishment of a nuisance calls agency, within Citizen's
Advice, to perform two essential functions:
- To collect and assimilate all reports of "Nuisance
Calls", passing prepared cases for action by the respective
regulators.
- To press the regulators to codify, promote and
enforce relevant regulations.
78. The TPS noted[84]
a campaign by Mike Crockart MP which includes a call for one regulator.
The TPS agreed that a single regulator might make things easier
for people to locate information but it would have little effect
on stopping the organisations that are breaking the law. The
Government's position, enunciated in its strategy paper, Connectivity,
Content and Consumers, is that the establishment of a single
regulator will be considered in the absence of clear progress
towards tackling nuisance calls and texts.
79. In evidence from Which?, the case for a single
regulator is acknowledged as an option for the future but, with
clear leadership and with someone given responsibility for finding
solutions, Which? believes the problem of nuisance calls should
be tackled now. Which? comments on both the complexity of the
regulatory framework and the number of regulators with an interest
in nuisance calls and texts. Richard Lloyd told us:
I think it would be difficult to completely redesign
the regulatory landscape and to start attacking this problem very
fast ... There is a range of legislation that can be used to bear
down on this problem. That is why I think it is too simplistic
to say, "Just give it to one regulator". Perhaps give
it to one individual based in a regulator to be accountable for
ensuring that all those powers are effectively brought to bear,
accountable to a single Minister.[85]
80. Which? would like to see the Claims Management
Regulator given the power to fine culprits.[86]
David Hickson, Fair Telecoms Campaign, told us:
Only the sectoral regulator—in the case
of the claims management companies, this is under the control
of the Ministry of Justice—can say, "Is this a proper
means of contacting people? Is it not?" I can't make that
determination, but the Ministry of Justice and the Claims Management
Regulator can make that determination. As regulators, they are
in a much more powerful position to take action if they say, for
example, "No direct marketing to get leads for claims management".
If that were to be their determination, they would be in a much
stronger position to enforce that. They could remove the licences
from people who were using leads generated in that way. That would
be a much more effective way of getting on top of the problem.[87]
81. In his evidence, David Hickson cautioned against
regulating call centres on the grounds of proportionality and
the dangers of driving more such activities offshore.[88]
For its part, the Government notes moves towards a system of
voluntary accreditation for calling companies under the auspices
of the Direct Marketing Association.[89]
The Government has said it will consider legislation to license
call centres in the absence of progress towards curtailing nuisance
calls.[90]
82. While we recognise that the existence of multiple
regulators, each with a specific and limited remit in relation
to nuisance calls, may be confusing to consumers, we see no obvious
benefit in reorganising the current regulatory landscape. However,
the complaints process must be more consumer-friendly and there
should be clearer lines of accountability. Each of the main regulators
should name an identified individual whom consumers can hold responsible
for dealing with the problems of nuisance calls.
83. Edward Vaizey, Parliamentary Under-Secretary
of State for Culture, Communications and Creative Industries,
told us he had "seized the buck"[91]
and accepted accountability on behalf of the Government.[92]
We see no pressing case for a single nuisance calls regulator.
We do see the case for a single point of contact for all nuisance
calls and for the existing regulators to be more visible and accountable
for both their actions and inaction.
Sector-based regulation
84. The Direct Marketing Commission (DMC) is an independent
body that oversees the Direct Marketing Association's Direct Marketing
Code of Practice. They told us: "We do this through the
investigation of complaints into members of the Direct Marketing
Association, and examination of direct marketing issues and practices.
This has included investigations and adjudications in relation
to telemarketing in contravention of TPS rules and consumer preferences."[93]
Of four recommendations made in the DMC's evidence, one stands
out: "Action should be taken to establish a self-regulatory
industry-based body to deal properly and proportionately with
all TPS complaints. This need not be a new body - the TPS working
with DMC could build on existing capacity and capability."[94]
Such an approach, based on the Advertising Standards Authority
model, would support the roles of the ICO and Ofcom who would
step in to deal with the most serious cases.
85. The DMC does not believe that the ICO and Ofcom
have the capacity, procedures and cultural base "to make
a profound impact on matters acting alone. We believe an industry-based
self or co-regulatory approach is needed as a support."[95]
DMC argues that "that some form of industry/TPS funded programme
of active response to complaints could dramatically reduce the
level of complaints and wrongdoing."[96]
One advantage the DMC approach has relates to its ability to take
a holistic approach which takes into account preference service
rules, data sourcing rules and rules on honest and fair marketing.
86. According to DMC, one barrier to closer working
with the TPS is section 393(1) (General restrictions on the disclosure
of information) of the Communications Act 2003; this inhibits
Ofcom from authorising the TPS to release complaint data to the
DMC. The DMC has a number of sanctions it can impose, one of
which is termination of an organisation's membership of the Direct
Marketing Association.
87. Ideally, more unwanted calls should be curtailed
at source. David Hickson told us: "What we need to do at
this time is turn attention to those who have regulatory control
over the industries that are making calls where we feel it is
not appropriate ... Only the sectoral regulator … can say,
'Is this a proper means of contacting people? Is it not?'"[97]
A sectoral approach might also allay some fears by charities that
their fund-raising activities might unfairly be constrained.
Richard Lloyd told us that the "vast majority" of nuisance
calls are not by charities, but by businesses who disregard the
existing regulations.[98]
88. While the prospect of effective enforcement action
by both Ofcom and the ICO should provide an effective deterrent,
there is clearly a greater need for sectoral regulators or associations
to put their own houses in order. The Direct Marketing Commission
would have more clout were it to be given greater authority to
share relevant information with both the Direct Marketing Association
and the Telephone Preference Service.
89. There is some support for an approach which places
greater emphasis on tackling the nuisance calls problem closer
to home. Evidence from the DCMS summarises non-legislative options
under consideration: these do include accreditation for calling
companies being pursued by the Direct Marketing Association.[99]
90. We believe that consumers would be unwise
to respond positively to direct marketing calls that do not adhere
to a code of practice equivalent to that which applies to members
of the Direct Marketing Association.
91. It is difficult to see how there could ever be
a "silver bullet" to solve the problem of all nuisance
calls. Not all unsolicited calls are necessarily unwanted. The
unsolicited job offer might be a welcome interruption. The unsolicited
double glazing pitch might prompt a long overdue home improvement.
Alternatively, the associated caller might be nothing more than
a nuisance. A combination of technical measures, simple means
of logging a report, and effective regulation backed up with meaningful
deterrents and sanctions might all need to be brought to bear
when a nuisance calls.
60 Ev 78 Back
61
The OTA is an independent organisation tasked by Ofcom to oversee
co-operation between communications providers Back
62
Q 32 Back
63
Q 34 Back
64
Q 87 Back
65
Ibid. Back
66
Q 25 Back
67
http://blogs.lse.ac.uk/mediapolicyproject/2013/07/18/new-policy-brief-reports-nuisance-calls-complaints-more-than-triple-recommends-co-ordinated-action/
Back
68
Q 27 Back
69
Ev 43 Back
70
Ev 85 Back
71
Ev 39 Back
72
Ev 56 Back
73
Ev 60 Back
74
Ev 43 Back
75
Ev 85 Back
76
Q 175 Back
77
Ev 85 Back
78
Ev 85 Back
79
Ev 68 Back
80
Q24 Back
81
Ev 51 Back
82
Ev 51 Back
83
Ev 43 Back
84
Ev 78 Back
85
Q 28 Back
86
Ev 39 Back
87
Q15 Back
88
Ev 43 Back
89
Ev 68 Back
90
Connectivity, Content and Consumers, DCMS, July 2013 Back
91
Q 181 Back
92
Q 211 Back
93
Ev 49 Back
94
Ibid. Back
95
Ibid. Back
96
Ibid. Back
97
Q 15 Back
98
Q35 Back
99
Ev 68 Back
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