HC 636-i

Written evidence submitted by the Market Research Society [NTC 022]

Introduction: About MRS and Telephone Research

MRS is the world’s largest association for market, social and opinion research. MRS supports best practice by setting and enforcing industry standards. All MRS Members and Company Partners must adhere to the MRS Code of Conduct, its associated regulations and compliance procedures. The commitment to uphold the MRS Code of Conduct is supported by the Codeline service and a wide range of specialist guidelines.

Telephone interviewing is used for about 15% of market, social and opinion research projects in the UK. It is used extensively in social research, to interview otherwise hard to reach groups and wherever a high quality random sample is required. It is imperative that this mode of communication remains open to research and that it not abused or subject to misuse.

Abandoned and silent calls

MRS responded to Ofcom’s consultations on revisions to its Statements of Policy in 2006, 2008 and 2010. We have incorporated the requirements of the statements aimed a preventing abandoned and silent calls in our Regulations for the Use of Predictive Diallers, making them directly enforceable by the MRS Market Research Standards Board against our 6000 individual members and 470 Company Partners.

Nuisance Calls

Over the last 18 months we have noted a significant level of queries to the MRS Standards Department about calls purporting to be for the purpose of market research. This is in line with a general increase in complaints about telemarketers - the number of calls made to the Telephone Preference Service (TPS) about unsolicited cold calls was 9,803 in July 2012, a 147% increase on the 3,958 received a year earlier, according to figures from Ofcom .

TPS’ own complaint figures show that the number of complaints relating to "market research" has increased from 2,877 in 2009 to 5,263 in 2011, an increase of 83%. Many callers to TPS are referred onward to MRS. Very few of the calls directed to us via TPS relate to genuine market research calls, and none have been connected to breaches of the MRS Code of Conduct. For the most part the calls we receive relate to the use of lifestyle questionnaires, a form of data collection for use in direct marketing. It is frequently the case that we have to refer callers back to TPS, as their calls relate to direct marketing.

MRS is also aware of traders using the guise of research as a means of generating sales or fundraising. These methods are known to researchers as sugging (selling under the guise of market research) and frugging (fund-raising under the guise of market research). Such practices are unethical and contrary to the MRS Code of Conduct

Self regulatory provisions

Current self-regulatory provisions adhered to by responsible and reputable organisations specifically forbid the misrepresentation of sales or marketing as market research. The DMA’s Direct Marketing Code of Practice provides in 3.22:

Members must not misrepresent themselves as carrying out research or a survey, or soliciting donations when the real purpose of the contact is to sell goods or services.

Similarly rule B21 of the MRS Code of Conduct requires researchers to provide a number of items of information at the beginning of interview, including the identity of the organisation making the call, the subject matter of the interview and its purpose (market, social or opinion research).

Consumer protection legislation

This is aligned with other consumer protection legislation such as Regulation 7(4) of the Consumer Protection (Distance Selling) Regulations 2000 (Statutory Instrument 2000 No. 2334) which provides that:

In the case of a telephone communication, the identity of the supplier and the commercial purpose of the call shall be made clear at the beginning of the conversation with the consumer.

MRS has also made representations to the Department of Business, Innovation and Skills to clarify its guidance on the EU Directive on Unfair Commercial Practices to make clear that sugging and frugging fall within practices banned by the Directive.

By sugging or frugging, traders use the appearance of conducting research, which is commonly understood not to involve any form of commercial message, to materially distort the economic behaviour of the average consumer to whom it is addressed. Consumers may feel obliged to provide information which is later used for sales leads or be drawn into purchasing a product or making a contribution as a direct result of the positioning of the commercial communication as a research exercise. Therefore MRS believes that these practices fall within the scope of the Directive.

Additionally, Annex 1, paragraph 22 of the Directive prohibits:

Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

The essence of sugging and frugging is that the trader claims or creates the impression that they are not acting for purposes relating to their trade or profession, i.e., they are acting in the capacity of researchers not traders. Therefore MRS believes that sugging and frugging are within the scope of this banned commercial practice which, under the Directive, is in all circumstances considered unfair.

Privacy Electronic Communications (EC Directive) Regulations 2003

In order to protect consumers from misleading commercial practices and protect the telephone network as a channel for research, MRS proposes that P rivacy Electronic Communications (EC Directive) Regulations 2003 be amended to explicitly prohibit selling under the guise of research and any other activities masquerading as telephone market, social or opinion research (such as fund raising). Additionally, MRS proposes that that all telephone market, social and opinion research should be conducted in accordance with the MRS Code of Conduct. We have discussed this potential solution with the TPS, who have been supportive of this approach.

August 2013