Proposal to lower the legal threshold for enforcement of the Privacy and Electronic Communications (EC Directive) Regulations 2003 (“PECR”), for regulations 19-24, to tackle unsolicited direct marketing calls and SMS text messages.

Foreword by Ed Vaizey, Minister for Culture, Communications and Creative Industries

The staggering number of complaints and the stress and anxiety caused by nuisance calls and text messages, especially to the vulnerable and housebound, is of great concern. This is why I have been working closely with regulators, industry, consumer groups and parliamentarians to take concerted action on this issue.

Earlier this year on 30th March we launched our first ever Nuisance Calls Action Plan. The Action Plan detailed the work in hand to improve call tracing and joint working by regulators. It also outlined legislative proposals to enable regulators to share information more easily. That work is progressing well and the relevant legislation is now in force.

But, a robust enforcement regime requires a regulator that can take tough action and issue monetary penalties against the worst offenders. The Action Plan noted that the Information Commissioner’s Office efforts to issue such penalties were frustrated by the legal requirement to demonstrate that nuisance calls and texts caused substantial damage or substantial distress. We therefore committed to consult on this critical issue to see if this threshold should be lowered, so that those breaking the law cannot evade enforcement action. This consultation seeks your views on how best this can be achieved and I welcome your thoughts on the proposals.

I believe a lower threshold will help boost our efforts to protect consumers more effectively. Whilst direct marketing makes an important contribution to our economy, this must not be at the expense of the consumer’s rights. Those who choose not to receive such calls and texts should have their rights respected and those who break the law should be held to account. These proposals seek to strike that balance and reflect our ongoing commitment to ensure that we have a safe and vibrant digital economy.

Executive Summary

What this consultation is about

1. The past decade has seen a rise in the number of complaints made about nuisance calls and text messages, with complaints reaching more than 13,000 per month up to March 2014. The issue is particularly acute for the elderly and housebound, as such calls can cause distress and anxiety. Whilst there have been some penalties issued against organisations for breaking the law, many have not faced enforcement action, in relation to the Civil Monetary Penalty regime and in particular to s.55A (1)(b) DPA. This suggests that there is a need to strengthen the enforcement regime to provide greater protection to consumers.

2. The Privacy and Electronic Communications (EC Directive) Regulations 2003 (“PECR”) govern when a direct marketing call can and cannot be made and the Information Commissioner’s Office (ICO), which is responsible for enforcing PECR, can issue a civil monetary penalty (CMP) of up to £500,000 for those found to be in breach of the regulations. However, the law also states that such Civil Monetary Penalties (CMPs) can only be issued where:
· there has been a serious contravention of the regulations; and
· the contravention was of a kind likely to cause ‘substantial damage’ or ‘substantial distress’; and
· the contravention was deliberate or the person knew or ought to have known that there was a risk that the contravention would occur (and that it would be of a kind likely to cause substantial damage or substantial distress) but failed to take reasonable steps to prevent it.

3. The ICO has issued monetary penalties totalling £675,000 to six organisations since January 2012, but some organisations that have deliberately made a large number of unsolicited direct marketing calls or sent numerous unsolicited SMS text messages and have not been issued with any CMPs. Furthermore, in one instance where an organisation was issued with a CMP, it was overturned on appeal by the Information Rights Tribunal for lack of evidence that such a practice caused substantial damage or substantial distress. Therefore, there remains a real risk that a CMP issued by the regulator could be overturned, due to the need to prove ‘substantial damage or substantial distress’. This has limited the ICO’s ability to regulate effectively.

4. The reports of the All Party Parliamentary Group (APPG) on Nuisance Calls (published on 31st October 2013) and of the Culture Media and Sport (CMS) Committee’s (published on 5th December 2013) also echoed our concerns about the impact of this high threshold. In our Nuisance Calls Action Plan we committed to consult on this issue to see if and how the threshold could be lowered to enable ICO to regulate more effectively.

5. The focus of this consultation is to change how PECR is enforced by ICO, particularly with reference to Regulation 21 on ‘live’ unsolicited marketing calls (and SMS text messages), but the proposal will equally apply to contraventions of the following Regulations1:
19 (automated recorded calls),
20 (fax messages),
21 (direct marketing calls referred to above),
22 (electronic mail),
23 (identification of sender when concealed for electronic mail) and
24 (information for regulations 19, 20 and 21)

Read the full report here