This week the Ministry of Justice will launch a consultation on whether regulated companies that breach Claims Management Regulation Unit rules should face fines of up to 20 per cent of their annual turnover – an increase that will mean some companies could potentially be fined millions of pounds, up from the current £500,000 maximum.
Next week regulations will be laid out in Parliament to simplify how Ofcom can share information with the Information Commissioner’s Office (ICO) and the Insolvency Service about rogue companies.
Later this year the Government will also launch a consultation on lowering the threshold for when the ICO can fine companies from the current level that dictates calls must cause “substantial damage” or “substantial distress”.
Meanwhile today (30 March) as part of the action plan, consumer group Which?’s executive director has become chair of a task force that will investigate how consumers give and withdraw consent to receiving marketing calls.
Communications Minister Ed Vaizey will also continue to hold regular meetings with associated regulators, industry and consumer groups, the Government says.
Announcing the plans, Justice Secretary Chris Grayling, said: “The scale of these fines shows just how serious we are about stopping them. The Claims Management Regulator already takes touch action against companies which break the rules, suspending and closing down rogue firms, but now these fines will give us an extra weapon to drive bad behaviour out of the industry.”
Between April and November 2013 there were 120,310 complaints made to the ICO about unsolicited marketing calls. In January alone this year, there were 2,507 complaints about silent and abandoned calls to Ofcom, the regulator responsible for these types of nuisance calls.
Fines totalling £2.54m have already been issued on nuisance callers and rogue claims management companies by Ofcom and the ICO since January 2012.
Last October the All Party Parliamentary Group on Nuisance Calls, chaired by Liberal Democrat MP Mike Crockhart, published a report listing 16 recommendations which called on telecoms companies to pilot new ways of blocking specific phone numbers and for caller identification to be provided to consumers free of charge on all marketing calls.
The Direct Marketing Association represents the UK’s telemarketing industry. Commenting on the Government’s action plan, the DMA’s chief of operations Mike Lordan says: “The Government’s action plan is a welcome warning to the rogue companies responsible for the nuisance calls that cause misery for millions of people and severely damage the legitimate telemarketing industry. As the industry’s representative, the DMA will play a leading role in implementing the action plan. This will not only benefit people at home, but also the tens of thousands businesses that lawfully use telemarketing to win new customers and drive sales.”