HC 636-i

Written evidence submitted by trueCall Ltd [NTC 030]

1. Summary

1.1 Call blocking technology has an important place in the mix of solutions to the nuisance phone call problem, but some have expressed concern that regulation and enforcement should be sufficient to control the calls that the public received – that people shouldn’t have to pay for products or services to block unwanted calls.

1.2 If someone has a particular problem with nuisance calls today, then telling them that if they wait for a few years the problem will eventually go away is no solution. A call blocking device installed today will immediately solve their problem. It is a solution with a proven track record – in recent independent trials carried out by Trading Standards a Third Generation system blocked over 95% of unwanted calls.

1.3 Of course cost is an issue - the cost of the technology would be significantly less if the main consumer telecos would incorporate such technology into their networks.

1.4 Older and vulnerable people are those most at risk from each nuisance call they receive, and perversely, since they are more often at home for most of the day, they receive four times as many nuisance calls as the average person. Trading Standards trials show that it makes financial sense for councils to provide call blocking technology free of charge to those who are vulnerable and most at risk from these calls.

1.5 The email spam problem was not brought under control by stopping the spammers sending emails, it was solved by service providers and users deploying tools that prevent spam emails arriving at the inbox. Dave Clancy, PECR Investigations Manager for the Information Commissioners Office said at a recent seminar "Even though people still receive huge amounts of spam emails we don't get many complaints because filtering systems in the network and at the users’ inbox reduce the problem to a level that is manageable for most people". The nuisance call problem can be solved using exactly the same approach – Third Generation call blocking technology installed as a device in the home, or built into the network can solve an individual’s nuisance phone call problem quickly and effectively.

1.6 This submission is a summary of a report we have published ‘Allowing consumers to block nuisance phone calls in the network’ which is available from www.trueCall.co.uk/reports and which is copied in. 

2. Can regulation solve the nuisance call problem?

2.1 What do we mean by ‘a solution to the nuisance call problem’? Ideally we mean that we want to reach equilibrium where consumers feel that they are in control of the type and number of phone calls they receive.

2.2 There are five problems with relying on regulations to get us to this equilibrium:-

1. Regulation is a blunt instrument

It is often said that a nuisance phone call is in the eye of the beholder. A call that I may be happy to receive may be a nuisance call to you, and a cause of anxiety to an older person. Also, our individual experience of nuisance calls is not the same - there is a huge difference between the inconvenience of receiving 4 nuisance calls per month (the experience of most people) and receiving 19 calls per month (the experience of 20% of the population).

Consider the calls that are the public seem to dislike most at the moment - PPI calls. Financial services companies, who have paid out £15bn in PPI compensation, report that the vast majority of PPI claims come to them via claims management companies. Consumers who were alerted to their right to compensation by a PPI phone call may be very grateful for having received it.

Regulation provides a ‘one size fits all’ solution where the regulator decides which types of marketing calls are good and which are bad. This means that all consumers are offered the same protection against unwelcome marketing calls irrespective of their needs or preferences. If, as we have demonstrated, different people have different needs then regulation only provides a compromise solution that is unlikely to be satisfactory for many people.

2. Regulation has not been effective at preventing unwanted calls anywhere in the world

The UK is already one of the best regulated countries in the world regarding nuisance calls – a national opt-out list is in place (TPS), there are rules that limit the use of the most pernicious call centre technology, recorded messages calls, number scanning and fax scanning, and strong data protection regulations are in place.

So far regulation in the UK hasn’t been effective at stopping nuisance phone calls – at best it has slowed down the increase. Nuisance calls are a problem around the world and we are not aware of any country where regulation has been effective. Telemarketers are resourceful and adept at finding loopholes and new types of call that can get around the rules, or just hiding themselves so that they are too difficult to identify and pursue. Of course, call centre technology is always developing and regulation is inevitably always one step behind.

Consider the idea of banning cold calling – a popular option suggested by many (and one that is currently being considered by the EU). This was introduced in Germany over ten years ago but German consumers continue to receive a wide range of unwelcome phone calls from companies who presume consent when it hasn’t been explicitly given. In 2011 complaints about nuisance calls in Germany were at a similar level to the UK.

Drafting regulations that are tight enough to be effective will pile on costs for the legitimate call centre industry and is likely to have unintended consequences while doing little to stop the rogues.

3. Regulations are almost impossible to enforce

The international nature of telemarketing and the anonymity that telecoms technology affords means that even if regulations are in place to control calls it is almost impossible to enforce them.

· It is difficult to identify culprits

· It is difficult to gather evidence as phone calls don’t leave an audit trail that is easily accessible

· The legal process is costly and resource heavy

· There are jurisdictional boundaries

· Laws are different in different countries

· The worst culprits are the ones who are most difficult to identify and pursue

There has been talk of international co-operation on this issue, but it is difficult to see the countries that host the international call centres giving priority to the enforcement of another countries nuisance calling rules.

The risk is that more enforcement action will just lead to the easy targets – UK call centres – being fined for minor infraction of the rules, and the call centres that completely ignore the rules but are based overseas getting away with it. Many believe that this has already happened, and it is yet another regulatory cost for the legitimate UK call centre industry.

4. Lots of calls are compliant

One way that you can classify marketing phone calls is to separate them out into calls that are compliant (those where the caller has complied with all the regulations relating to telemarketing), and calls that are not complaint (those where the caller has failed to comply with one or more of the regulations relating to telemarketing). We estimate that around half of unwelcome marketing calls received by UK households are compliant.

Of course, the fact that a call is compliant doesn’t mean that everyone is happy to receive it. Consider a phone call you receive trying to get you to install solar panels. If you are not registered with the Telephone Preference Service, if the call is made by a live operator, and if the call centre’s equipment is correctly configured then this call can be perfectly legal. Some people will welcome this call – maybe it leads to cheaper electricity costs – but others will consider it to be an unwelcome intrusion.

A call centre may be operating completely within the law but:-

· Their calls are frequent

· Their calls arrive at inconvenient times

· Their callers use ‘hard sell’ tactics

· The person receiving the call doesn’t have the capacity to deal with it so it causes anxiety or distress

Regulators cannot – by definition – prevent compliant phone calls being made, so an approach that just focusses on enforcement of regulations can only hope to partially solve the nuisance call problem.

5. People have a problem today

Consider the problem for Anne’s carers:-

"Anne has dementia and lives on her own. She has been a victim of several scams and has willingly given her credit card details to cold callers and sales people resulting in multiple insurance policies to cover household appliances and cover for unnecessary items as well as buying inappropriate health products.

It has been distressing for Anne when she discovers this is the case as often she has no recollection of it and therefore feels vulnerable and that she has been taken advantage of."

Telling Anne’s carers that she has to wait until new regulations start to bite is no help at all – Anne needs protection now, and the only option is call blocking technology.

3. Nuisance phone call blocking technology

3.1 Nuisance call blocking technology has advanced hugely in the last five years – it is proven and effective. It allows each user to decide exactly which sorts of calls they want to receive and which ones they don’t. Second Generation technology (which has been around for almost 20 years and costs £40 - £60) can block some of the nuisance calls, but it is being superseded by Third Generation systems that are much more effective (and cost around £100).

3.2 Early in 2013 three Trading Standards teams – in Angus, East Dunbartonshire and East Renfrewshire – carried out independent projects to see how nuisance calls affected vulnerable people, and to test the effectiveness of Second and Third Generation systems. This was first time that this had ever been investigated. During the trial Second Generation call blocking technology blocked 34% of the unwanted calls and Third Generation technology blocked 98%. When configured to protect the most vulnerable residents a Third Generation system blocked 100% of the nuisance calls giving them total protection.

3.3 Second and Third Generation technologies can be delivered as a network service, as a device for the user to install in their home, or integrated into a telephone handset. In the USA the networks have offered customers Third Generation services for over a decade, and France Telecom introduced a Third Generation network service seven years ago. Landline and mobile networks in the UK have been slow to embrace this technology and still only offer limited Second Generation solutions.

3.4 There are many advantages to putting call management technology into the network – there is no equipment for users to buy or install; it can be provided for a modest monthly fee; it can be quickly enhanced and adapted if call centres change their tactics; and the same technology can be used to protect landlines, mobile phones and VoIP lines.

. The case for providing nuisance phone call blocking technology for older and vulnerable people

4.1 While the telephone is an essential lifeline, it can also cause problems for older and vulnerable people. They may be confused by telemarketing calls that they receive, they may agree to order products that they don’t need, or they may be taken advantage of by unscrupulous sales people or scammers. How should vulnerable consumers be protected?

4.2 The study carried out by Trading Standards in Angus monitored the calls of 43 vulnerable individuals over an average period of 2 months. While they weren’t housebound, they spent much more of their time at home than someone who worked. On average 40% of the calls received by older and vulnerable residents were nuisance calls (four times the national average), and alarmingly, there appeared to be evidence that the most vulnerable residents were receiving more calls – ie they were being specifically targeted. With 98% of the nuisance calls blocked by Third Generation technology the feedback from residents and their carers was extremely positive.

4.3 The graph above shows that call blocking technology has given all residents involved an increased level of confidence and empowerment; a clear reduction in concern about nuisance calls; a reduction in stress; a decreased risk of trips and falls; and a reduction in fear. This has not only had an impact on their own lives, but also on the lives of their carers, who previously had to deal with the consequences of these calls. Carers said that the technology was reducing the risk of trips and falls, and was enabling residents with dementia to live independently in their own homes for longer.

4.4 The benefits go beyond general protection and wellbeing – it can reduce the amount of support these residents require from public services. Allowing people to stay independent for longer is a key policy objective; preventing vulnerable people falling victim to a scam not only reduces the burden on law enforcement agencies but reduces the chance that the resident will have to rely on state to support them; a reduced incidence of trips and falls can make a big difference to the medical care that the resident requires both in the short and long term.

4.5 As a result of the project these Trading Standards teams recommended that councils should provide call blocking technology free of charge for its most vulnerable residents – for example those in council run sheltered accommodation, those who have already lost money to a scam (re-victimisation is a big problem), those who get a diagnosis of dementia, and those who are assessed for a council community alarm.

4.6 Anne’s carers make this very clear (trueCall is our own Third Generation call blocking product):-

"trueCall has been an extremely valuable tool enabling Anne to stay in her home longer. It has eliminated these nuisance calls and has had a direct impact on her wellbeing. Anne is more confident and is more positive about her situation; she is also less worried about being able to cope in her home. It has really made a positive difference in helping Anne adjust to living with dementia, and renewing her faith in her own abilities."

5. Conclusion

5.1 If everyone obeyed the law then burglar alarms wouldn’t be necessary. That doesn’t mean that burglar alarms are not an important component in preventing burglary. Call blocking technology is a key component in the fight against nuisance calls, and the only one that has proved to be effective so far.

5.2 Of course there is a cost for this technology, but there are huge personal and societal benefits in blocking the unwanted calls that elderly and vulnerable people receive. Councils provide pendant alarm systems for older and vulnerable people in their area – they should also provide call blocking technology.

5.3 Delivering call blocking in a device is very effective, and there are real benefits to providing it in the telecoms network. None of the UK telcos have chosen to implement the network call management features that have been available in the US since 2001 and in France since 2006. They say that while this is possible, the technology is too expensive to implement. We are sure that the public would like to see government and regulators encouraging the networks to embrace this technology to provide us all with another option to solve the nuisance call problem.