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“Call us now if you have been involved in a car accident recently.....” TOUGHER PENALTIES FOR SPAMMERS?

03 March 2015 #Commercial

Unless you have no mobile phone or internet access, in which case you are probably unlikely to be reading this, you will be in a very small minority if you haven’t received a text message of this kind, or perhaps an automated call about PPI claims or some other “entitlement”. What these communications have in common is that they are almost always unsolicited, unwanted and very difficult to do anything about because the identity of the sender is either disguised or undisclosed, or there is no effective way given to opt out.

The law to address this problem is already in place and has been for some time. Regulation 22 of The Privacy and Electronic Communications (EC Directive) Regulations 2003 essentially prevents the sending of any direct marketing (DM) communication by “electronic mail” without the prior consent of the recipient. “Electronic mail” is widely defined as text, voice, sound or image message sent over a public network, and specifically includes text messages. Regulation 23 prohibits the sending of DM communications by electronic mail where the sender’s identity has been disguised or concealed, or where no valid address is given to allow recipients to stop the communications.

Until now, the issue has been, as well as the considerable hurdle of identifying the offenders, imposing sanctions which provide an effective deterrent. Breaches of Regulations 22 and 23 fall within section 55 of the Data Protection Act 1998 (DPA), which permits the Information Commissioner (ICO) to impose penalty notices of up to £500,000 on offenders where there has been a deliberate and serious breach and it is of a type “likely to cause substantial damage or substantial distress”. This “substantial damage or substantial distress” test has proved problematical, notably when a penalty of £300,000 was imposed in 2012 by the ICO on a Mr Christopher Niebel and his company in relation to the sending of huge numbers of unsolicited “PPI Claim” text messages. The penalty was overturned on final appeal in June last year after the appeal tribunal found that the “substantial damage or substantial distress” test had not been satisfied. Interestingly, this test is not part of the European law from which the Regulations derive and is a UK “add-on”.

The Government’s reaction to the Niebel case was to put in place a public consultation on the “substantial damage or substantial distress” threshold, and it has now announced that, as from 6 April, the threshold will be removed from the DPA which should, at least in theory, make it easier for the ICO to impose effective sanctions on those who breach the Regulations.

This does not necessarily end current measures on DM by electronic mail. 2014 also saw a Nuisance Calls and Texts Task Force led by Which? whose Report* appeared in December. One of its recommendations was that the Department of Culture, Media and Sport, and the Ministry of Justice, should review the ability of the ICO to hold to account board-level executives who fail to comply with rules and guidance on the use of consumers’ personal data for marketing purposes. The Government have indicated that they will do this.

Given the considerable public anger and disquiet at nuisance texts and calls, it seems likely that there will be a continuing focus by legislators and regulators on the use of electronic mail in DM communications. The easing of the threshold is likely to lead to an increase in severe financial penalties being imposed by the ICO, and these will attract unwelcome publicity, which may well also affect those reputable companies who use the services of DM organisations but who do not monitor adequately how these go about their business.

The Which? Report’s recommendations for businesses carrying out any DM activity include:-

  1. Treat compliance with the law on consumer consent to DM as a board-level issue in the context of corporate risk and consumer trust, and consider actively joining and promoting accreditation schemes aimed at preventing nuisance calls and texts.
  2. Commit to implementing ICO guidance on collecting and buying in data and specifically address a number of matters (listed in the Report) relating to consent in their policies and procedures.

These recommendations are instructive as to what a consumer champion’s view of good practice in this area is, and businesses might perhaps be well-advised to consider benchmarking their own DM practices against them (whether they carry out DM directly or through third-parties).

* Report of the Nuisance Calls and Texts Task Force on Consent and Lead Generation December 2014

Clarkslegal, specialist Commercial lawyers in London, Reading and throughout the Thames Valley.
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Jon Chapman

Jon Chapman
Senior Consultant

T: 0118 960 4683
M: 07979 591 627


Commercial team
+44 (0)118 958 5321