27Apr

Two more CMCs stripped of authorisation for multiple rule breaches

The week commencing April 18 2016 saw the Claims Management Regulator at the Ministry of Justice announce its reasons for removing the authorisation of two more claims management companies. These are Stockport-based financial claims manager Debt Ace Limited, which traded as Taylor & Taylor, Verus Associates, Money Advice Centre and MAC; and Blackburn-based personal injury claims company Check Point Claims Limited.

Both companies were in breach of the following sections of the Conduct of Authorised Persons Rules:

• General Rule 2d – which requires companies to maintain appropriate records and audit trails
• General Rule 2e – which stipulates that referrals, leads and data obtained from third parties have been sourced in line with relevant regulations and laws
• General Rule 5 – which simply asks companies to observe all relevant laws and regulations

The additional rules which Debt Ace breached include:

• General Rule 8 – which requires companies to operate a complaints scheme that complies with the relevant rules
• Client Specific Rule 1a – which is the general requirement for companies to ‘act fairly and reasonably in dealings with all clients’
• Client Specific Rule 1c – which asks that information supplied to clients is ‘clear, transparent, fair and not misleading’
• Client Specific Rule 6d – which prevents companies from stating or suggesting that they are approved by the Government or are connected with a Government body
• Client Specific Rule 11 – which requires contracts between the company and its clients to be signed by the client, and prevents payments being taken before the contract is signed.
• Client Specific Rule 15 – which stipulates that companies must give clients 14 days after signing any agreement to cancel the agreement and receive a refund of all payments made

The rules with which Check Point failed to comply also include Client Specific Rule 4, which prevents cold calling in person and requires that all telephone, email, fax or text marketing complies with the Direct Marketing Association’s Code and related guidance.

The previous week, Llanelli-based financial claims manager Legal Collect Ltd was also prohibited, and again it was found to have breached General Rules 2d, 5 and 8; as well as Client Specific Rules 1c, 6d and 11. It also failed to comply with General Rule 1, which requires companies to display honesty and integrity when conducting business; and General Rule 3, which requires directors and senior management of claims companies to have the necessary competence and understand the legislation and regulations with which they must comply.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

26Apr

MOJ publishes bulletin for CMCs, which includes guidance on a number of compliance topics

The April 2016 bulletin for claims management companies (CMCs) from the Claims Management Regulator at the Ministry of Justice (MoJ) addresses five key topics: marketing practices, Data Protection Act (DPA) compliance, use of agents and third parties, the Government’s review of the claims management regulatory system and the consultation on capping the fees charged by companies.

Regarding marketing practices, the bulletin contains a link to the MoJ’s guidance on this subject. Companies are advised to read the full document, but some of the key information it contains includes:

• Companies must ensure information provided to both existing and prospective clients is ‘clear, transparent, fair and not misleading’. Examples of ways CMCs have breached this rule include: informing clients a specific sum is due to them in compensation on the first contact; making false promises as to the time in which the claims process will be completed; and stating or implying the company is a law firm, when this is not the case
• Personal cold calling, such as calling door-to-door or stopping passers-by, is prohibited. Telephone cold calls cannot be made to anyone registered with the Telephone Preference Service, or to anyone who has actively opted out of receiving these calls. Automated calls and marketing texts can only be made where the recipient has specifically informed the company they do not object to receiving these.
• Companies cannot state or imply they are connected with the Government or a government body when this is not the case
• If a company refers to the fact they are authorised, they must use the specific wording “Regulated by the Claims Management Regulator in respect of regulated claims management activities.” This applies to telemarketing as well as printed marketing material.
• Companies that use the statement ‘no win no fee’ must qualify this if either of the following applies: a fee would be charged if the agreement was cancelled, or a fee may be charged for responding to a Subject Access Request
• Any leads obtained via cold calling, even if obtained in compliance with the MoJ rules, cannot be passed to a solicitor as this would put the legal professional in breach of the Solicitors Regulation Authority rules
• All CMC websites must state: the full legal name of the company, its address, its registered address (if different), its contact details (including email address), its registration number and its country of registration. The following statement must also appear: “X Business is regulated by the Claims Management Regulator in respect of regulated claims management activities; its registration is recorded on the website www.gov.uk/moj/cmr.”

CMCs are urged to make use of the Self-Assessment Tool, which can be found on the Information Commissioner’s website, which allows companies to assess whether they are complying with their DPA obligations.

Companies that use agents or other parties, say for telemarketing purposes, were reminded that they must conduct adequate due diligence on these third parties, and must maintain records to demonstrate this. A number of CMCs have attempted to justify breaches of telemarketing legislation by saying that a third party made the communications on their behalf, but the MoJ will always hold the authorised CMC liable for any failings of third parties which they use.

At present, the MoJ retains responsibility for claims management regulation. However, the bulletin highlights that this will change in the not too distant future, as the Government has decided to transfer claims management regulation to the Financial Conduct Authority (FCA). At the appropriate time, all CMCs will need to apply to the FCA for re-authorisation, and CMCs are warned that the FCA has the power to take action against key individuals, such as directors and senior management – it may for example in serious cases decide to ban an individual from the industry for life.

CMCs are also informed that the consultation regarding proposed restrictions on the level of fees they can charge has now closed. Further information on this subject will be published at a later date.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

25Apr

FCA chief and Government minister speak on implications of FAMR

On April 13 2016, a government minister and the regulator’s acting chief executive both addressed an industry forum on the Financial Advice Market Review (FAMR), explaining what the implications of the Review might be for the financial advice market.

Economic Secretary Harriet Baldwin MP began by acknowledging that the financial advice sector “works well for wealthier customers,” before going on to say “those without significant wealth have an ‘advice gap’.” She made reference to the average hourly fee charged by an adviser being £150, and that cases could require as much as nine hours work.

Ms Baldwin said the Government would be taking forward all 28 recommendations made in the FAMR report. She firstly said that the Government will be consulting on changing the definition of financial advice so that it only applies to cases where a personal recommendation is made.

She promised that the Pensions Dashboard – a facility that allows clients to view all of their pension provision in one place – would be available by 2019.

Referring to the cost of advice, she said that the Government was consulting on allowing clients to access up to £500 of their retirement savings early in order to pay the advice fees, and also that the tax exemption for employer arranged-pension advice will rise to £500.

Ms Baldwin also referred to the proposed replacement of the Money Advice Service (MAS) with a new money guidance body. Advisers may be cheered by the news that this new body will not have a marketing budget, suggesting that firms will not pay as large a levy to fund it as they do with the MAS.

Tracey McDermott, Acting Chief Executive of the Financial Conduct Authority (FCA), made reference to the ageing population, and the new pension freedoms, as drivers for conducting the Review, in addition to the perceived cost of financial advice.

Like Ms Baldwin, she made reference to the tax breaks on employer-sponsored advice, the proposed changes to the definition of advice and the pensions dashboard. However, much of her speech concerned new arrangements to facilitate the provision by firms of automated advice (or robo-advice), and she announced that the FCA’s Advice Unit, which she said “will support the development of automated advice tools that can help provide low cost, high quality advice to mass-market consumers on investments, pensions and protection,” would be up and running by May 2016.

Ms McDermott also spoke of the review of the Financial Services Compensation Scheme (FSCS) that the Review recommended. The FCA will conduct bilateral meetings and hold industry working groups, followed by a formal consultation, as it examines proposals for alternative ways of funding the FSCS, such as risk-based levies and reform of the existing funding classes. FSCS levies are currently having a major impact on advisory firms’ profits.

She also explained to the audience why the FAMR rejected calls for a long-stop, which would have allowed firms to refuse to deal with complaints from clients made concerning advice given 15 years or more previously. She said that the Financial Ombudsman Service had only received 216 complaints in the last financial year that concerned advice given more than 15 years ago, and that only 30% were upheld, and thus suggested that the benefits to the industry of a long-stop would be minimal, while the detriment to individual clients could be considerable.

The FCA chief executive commented:

“It is crucial we strike a balance here – between ensuring firms are willing to offer advice in good faith, knowing that if it is professional and suitable they will not be exposed to costs in the future, but also ensuring appropriately high levels of consumer protection, and making those protections clear and tangible, in order to inspire public confidence in the advice sector.

“In light of this, we decided we should not recommend imposition of a longstop.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

20Apr

FCA chief warns credit firms to comply with the rules or leave the industry

Consumer credit firms who are unwilling to adapt to the stricter requirements of Financial Conduct Authority (FCA) regulation have been informed by the regulator’s acting chief executive that she is happy for them to leave the industry rather than continue to trade in a non-compliant way.

Addressing the 2016 Credit Summit, Tracey McDermott acknowledged that some firms had put in a lot of work to embrace the new regime. However, she then went on to say:
“I think everyone in this room is aware that we’ve also seen certain types of firms exit the industry since the FCA took over consumer credit regulation.

“We have refused authorisation to 40 consumer credit firms who didn’t meet our standards. We have also seen over 100 debt management firms leave the industry. Over 1400 firms in total have either been refused or decided to withdraw their application

“We have set out our expectations of the standards firms must meet to be authorised. And in many cases these are a step change from what was required in the past. But they are not a nice to have. They are critical to ensuring proper protection of your customers.

We are content to see firms leave the industry if they cannot meet these standards.”

Ms McDermott cited the example of PDHL, a large debt management firm whose application for full authorisation was declined by the FCA even though they had been trading for a number of years under the auspices of the Office of Fair Trading. She said that, when considering PDHL, her organisation found “cases of customers’ files not being reviewed for months despite them reporting job losses. In one instance, we found the firm insisting a client should maintain £30 monthly repayments, despite the client having no income.”

According to the FCA chief executive’s remarks, 23 credit firms have already been forced to pay a total of £334 million in customer redress, for issues ranging from inappropriate lending decisions and unfair charges to poor treatment of customers in arrears and improper debt collection practices.

Credit broking, debt management and payday lending were described in the speech as “areas where we see the greatest risk of detriment through poor practices,” and Ms McDermott emphasised to firms operating in these sectors that they can continue to expect close scrutiny.

As well as complying with the FCA’s detailed rules, firms were also asked to ensure they had the right corporate culture – one that operated in the interests of consumers.

On this subject, Ms McDermott commented:

“What we want to see as an outcome is an approach where the interests of customers and the market are at the heart of your business and where you and your staff focus on delivering the right outcomes, not just meeting regulatory requirements.”

On a different note however, she made reference to the ongoing review of the retained Consumer Credit Act provisions. Firms are invited to respond to the FCA’s ‘call for input’ as to which provisions of the Act could be amended or repealed altogether.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

19Apr

CMC loses authorisation for multiple failings

Llanelli, South Wales-based claims management company (CMC) Legal Collect Ltd has been stripped of its authorisation to conduct claims management services, after the Claims Management Regulator found the company to be in breach of eight of its rules.

The sections of the Conduct of Authorised Persons Rules 2014 that Legal Collect failed to comply with were:

• General Rule 1 – which requires companies to display honesty and integrity when conducting business
• General Rule 2d – which requires companies to maintain appropriate records and audit trails
• General Rule 3 – which requires directors and senior management of CMCs to have the necessary competence and understand the legislation and regulations with which they must comply
• General Rule 5 – which simply states that companies must comply with all relevant laws and regulations
• General Rule 8 – which stipulates that companies must handle complaints in accordance with the Regulator’s rules in this area
• Client Specific Rule 1c – which dictates that all information supplied to clients must be ‘clear, transparent, fair and not misleading’
• Client Specific Rule 6d – which prevents CMCs from stating or implying in their marketing material that they have been specifically approved by the Government, or that they have a connection with a government agency
• Client Specific Rule 11 – which requires all contracts between a CMC and a client to be signed by the client, and states that payment must not be taken until the contract is signed

Legal Collect specialised in payment protection insurance and packaged bank account claims. As of April 15 2016, its website made no mention of the Regulator’s action, still invited new clients to get in touch about making a claim and still stated that the company was “regulated by the Claims Management Regulator in respect of regulated claims management activities,” even though the cancellation of its authorisation took effect two days previously.

The reasons why Legal Collect lost its authorisation serve as a warning to other CMCs to check that they are complying with their obligations.

Under the existing regulator, the number of rules CMCs have to comply with has already increased significantly in recent years. However, even stricter regulation is on the way, as in March 2016 the Government announced that the Financial Conduct Authority (FCA) will assume responsibility for regulation of CMCs. No date for this switchover was officially announced, although media reports suggest it may occur in 2018.

Financial services firms who are regulated by the FCA are required to comply with an extensive rulebook, are required to submit comprehensive data returns and are subject to a structured monitoring programme. The FCA can also impose bans and fines not only on authorised firms that break the rules, but also on key individuals within firms, unlike the existing regime which only allows companies to be punished. For example, in March 2016 alone, six individuals were prohibited by the FCA.

The announcement was made as part of the Government’s Budget measures. A Treasury statement referred to the FCA’s policy of holding senior management accountable by saying:
“The Government is clamping down on the rogue claims management companies that provide bad service and bombard customers with nuisance calls. The new regime will be tougher and will ensure claims management company managers can be held personally accountable for the actions of their businesses.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

18Apr

Advisory firms given one year to opt out of P2P permissions

Advising on peer-to-peer (P2P) lending agreements became a regulated activity on April 6 2016. The current situation is that all firms that hold permission to advise on investment contracts have automatically been granted permission to advise on P2P.

These firms must now decide over the next 12 months whether they wish to retain their permissions in relation to P2P. Firms can decide to opt out at any time up until April 6 2017, however the simple method of opting out via a tool on the Financial Conduct Authority (FCA) website will be withdrawn on October 6 2016. Until then however, firms can complete a variation of permission form and email it to P2Padvice@fca.org.uk. There will be no cost to firms for withdrawing this permission.

Any firm that does not opt out by April 6 2017 will then need to pay the necessary authorisation fee to the FCA. Until this date there will be no additional charge for holding P2P permissions.

Another reason why firms may wish to opt out is that having P2P permissions could increase their professional indemnity insurance premiums.

Firms who give P2P advice are subject to similar standards as those applying to other forms of investment advice. These include:

• The FCA’s rules on ensuring suitability of advice apply in full
• P2P advisers cannot receive commission from the provider, and so must be remunerated entirely via fees
• P2P advisers must be appropriately supervised and assessed as competent, and need to attain a suitable Level 4 Diploma qualification
• Firms must have systems and controls in place for monitoring P2P advice which are equivalent to the controls they have in place for other investment advice.
• Firms giving P2P advice must hold the same level of capital resources as any other investment advice firm
• All of the FCA’s financial promotions rules, as set out in Chapter 4 of the Conduct of Business Sourcebook, apply to firms giving P2P advice
• Clients who receive advice on P2P agreements have access to the Financial Ombudsman Service should they wish to complain, and to the Financial Services Compensation Scheme should the advising firm go out of business

Financial advisers who hold themselves out to be independent at present can continue to do so even if they do not offer advice on P2P agreements.

Investment in peer-to-peer loans is now permitted within an Individual Savings Account (ISA). An ISA that includes a P2P component is known as an Innovative Finance ISA (IFISA). However, only operators of P2P platforms that hold full permission from the FCA can offer IFISAs. On March 31 2016, the FCA issued a statement to the effect that only eight P2P operators held full permission, and media reports said that only two of these eight had obtained ‘ISA Manager’ status from HM Revenue & Customs.

15Apr

FOS finds against firm over illiterate insistent client

The issue of how financial advisers should deal with insistent clients has been a hot topic since the pension freedoms were introduced. Firms should now take careful note of a case in which the Financial Ombudsman Service (FOS) upheld a complaint made by an illiterate customer who chose to transfer her pension on an insistent client basis.

Portal Financial Services recommended that Mrs W, who could not read or write, remained in her employer’s final salary occupational pension scheme when she indicated that she wished to access lump sums for home improvements. However, when writing to her to confirm this recommendation, the firm also stated that she could take a different course of action as an insistent client, and enclosed an insistent client form. Mrs W signed and returned this form, but later claimed to have been confused by its content, and claimed it was never her intention to transfer out, adding that it was only after she retired in 2014 that she realised the transfer had gone ahead.

Ombudsman Adrian Hudson agreed with the initial decision of the FOS adjudicator when the firm chose to appeal the judgement. He ordered the firm to compensate Mrs W for the losses she incurred by transferring out, and to pay an additional £250 for the inconvenience caused.

Mr Hudson’s judgement reads:

“I cannot ignore the fact that Portal knew that Mrs W could not read or write. It was required to act in the best interests of Mrs W. Portal knew that Mrs W could be worse off if she transferred from her former employer’s pension scheme.

“I take the view that Mrs W’s circumstances were such that Portal should have acted with considerable caution. If it wished to act for Mrs W, it should have given all the information she needed in order to make an informed decision – and in a format that she would have been able to understand.

“I am not satisfied that Portal gave Mrs W sufficient detail about the benefits that she was giving up by transferring or what she could receive. In my opinion, had it done so, Mrs W would have seen the extent of the harm that would be caused by transferring and taking her lump sum.

The plan she transferred into would have required growth of 12% per annum to match the returns available from the occupational scheme. The insistent client letter sent by Portal included a number of complex terms, such as ‘critical yield’.

The firm argued that to have refused to deal with Mrs W on the grounds of her illiteracy could have constituted discrimination, and that she would not have signed the form if she did not understand its implications.

The Financial Conduct Authority (FCA) has promoted use by firms of a three stage process when dealing with insistent clients:

• Give a clear and concise recommendation, ensuring the client understands what is being recommended
• If the client indicates that they wish to take an alternative course of action, clearly explain that this is against the firm’s advice, and make them aware of the risks involved with the route they wish to take
• Clearly document on the client file the fact that the client has chosen to go against the professional advice they received

However, it is not clear whether this process was followed in this case – it may be that the FOS feels that additional steps should have been taken given the client’s circumstances. Firms should consider whether to make use of taped oral disclosure and recorded oral suitability reports when advising clients who cannot read or write.

The case prompted Keith Richards, chief executive of the trade association the Personal Finance Society, to repeat his recommendation that member firms should not process insistent client transactions.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

13Apr

FCA data shows fewer customers cashing out pensions

The latest figures from the Financial Conduct Authority (FCA) show a significant fall in the numbers of customers cashing out their pensions.
The regulator has published data for the fourth quarter of 2015, obtained from 94 pension and retirement income providers that collectively cover 95% of the post-retirement benefits market.

127,094 pension funds were accessed for the first time in the three month period, whether via an annuity, a drawdown plan, a cash withdrawal or a combination of these methods. This figure represents a fall of 36% from the figure of 197,443 reported in the third quarter.

These 127,094 instances of accessing pension funds were made up of:

• 65,610 full cash withdrawals – this remains the most popular way of accessing retirement savings, but this figure is down by as much as 42% when compared to the July to September figure of 113,100. The proportion of customers choosing this method also fell from 57.3% to 51.6%
• 37,150 new drawdown plans (excluding the plans used to make a full withdrawal)
• 21,289 annuity purchases, down by 9% from the previous figure of 23,385. However, the proportion of retirees choosing to access their savings via an annuity rose from 11.8% to 16.8%
• 3,045 partial cash withdrawals via the Uncrystallised Fund Pension Lump Sum (UFPLS) method

68% of the purchases of drawdown plans, 42% of the annuity purchases, 37% of the full withdrawals and 34% of the partial withdrawals via UFPLS were made after the customer sought regulated financial advice. (In the third quarter, 58% of drawdown buyers and 37% of annuity buyers sought advice in this way).

14,955 pensions with Guaranteed Annuity Rates (GARs) were accessed between October and December, and the proportion of GARs not taken up remains high, at 63%, even if this is slightly down on the figure of 68% reported for the preceding three months.

Many customers are still not shopping around, with 53% of the drawdown plans and 57% of the annuities sold to existing customers of the provider. The equivalent figures in the third quarter were 58% and 64% respectively.

Most customers are still making only small withdrawals from their pension pot. When looking at pension pots where regular withdrawals are being made through drawdown or UFPLS, 86% of these withdrawals involved taking less than 4% of the pot. Only 5% of withdrawals involved taking more than 10%, although the curious state of affairs in which younger retirees withdraw more continues – 11% of customers aged 55 to 59 withdrew more than 10%.

Stephen Lowe, group communications director at annuity provider Just Retirement, said:

“As we head into the second year of pension freedoms some of the initial excitement has worn off to be replaced by what seems to be a more practical attitude.

‘Pent-up demand for full cash withdrawal that resulted in eye-watering amounts of money being stripped out of pensions has moderated.

Claire Trott, head of pensions technical at pensions administration firm Talbot and Muir, said:

“The most notable drop is in those accessing their whole fund as cash and this isn’t really a surprise, it would have been those individuals who would have been able to encash their funds quickest and easiest, so I can see this figure continuing to fall to a reasonable level over the next few quarters.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

12Apr

FCA issues statement on P2P authorisation process

In view of the changes taking place affecting peer-to-peer (P2P) lending from April 6 2016, the Financial Conduct Authority (FCA) issued a statement on March 31 about its progress in authorising P2P firms.

In this statement, the regulator said it had “received a lot of applications for firms wanting permission to operate a P2P platform.” However, it reminded applicant firms that it may take as long as 12 months to reach a final decision on a firm’s application, and also that firms are not permitted to trade in the P2P market unless they hold either full permission or interim permission.

Exactly how long it takes the FCA to reach a decision depends on: whether the application is complete when first received, the complexity of the firm’s operations and the extent to which the initial application demonstrates that the firm can comply with its regulatory obligations.

At the time of the statement, only eight firms in the UK hold full permission to operate a P2P lending platform. 44 firms currently hold interim permission, and are permitted to trade while the FCA reaches a decision on their application to upgrade to full permission. This means that a total of 52 P2P firms are currently legally able to operate.

Another 42 firms have applied to enter the P2P market for the first time, and these firms are not permitted to carry out regulated activity relating to P2P until such time as the FCA approves their application.

The statement describes the P2P arena as “a young and innovative market” and the FCA goes on to say that the new Innovative Finance ISA (IFISA), launched for the 2016/17 tax year, will “further increase consumers’ awareness of peer-to-peer lending.”

P2P agreements administered by firms that still hold interim permission cannot be included within the IFISA wrapper, so it seems that this product may take some time to take off, given that there are still only eight full permission firms.

Advising on P2P agreements became a regulated activity on April 6, and all firms authorised to give investment advice have automatically received permission to advise on P2P agreements. Essentially firms are subject to similar requirements when giving P2P advice as those that apply when giving investment advice, including:

• The need to ensure suitability of advice
• A requirement for advisers to hold a Level 4 financial advice Diploma
• A requirement for advisers to be appropriately supervised and assessed as competent
• A ban on receiving commission or other inappropriate inducements from providers
• The financial promotions rules relating to investments

When advising on IFISAs, firms are expected to provide clients with an explanation of the tax situation, the potential impact if the P2P agreement is not repaid and the potential impact if the P2P platform operator fails. They should also explain how an IFISA can be cashed in, or transferred to another provider – here transfers can only be made if all outstanding loans have been repaid. Firms should give an indication to affected clients of how long the transfer is expected to take.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

08Apr

CMC that is already banned by the MOJ hit by ICO fine for nuisance calls

A claims management company was stripped of its authorisation in January 2016, for what the Claims Management Regulator at the Ministry of Justice (MoJ) described at the time as “the worst excesses of the industry.”

Now the data protection watchdog the Information Commissioner’s Office (ICO) has also taken action against the company. It has fined the firm £175,000 after some 5,535 complaints were received by ICO about its automated marketing calls regarding payment protection insurance claims. If payment is made by April 19 2016, the fine will reduce to £140,000.

The firm told the ICO in June 2015 that it had stopped making the marketing calls, yet the watchdog found evidence of the company making 2,475,481 calls in the two months following that. Many customers claimed the company were making calls in the middle of the night – these are two examples of complaints received by the ICO:

“The most annoying and disgusting thing was the time of the call in the early hours of the morning. It woke everyone in the house including young children. It caused me a lot of anxiety as I do not receive calls at that time of day unless it is an emergency or bad news. A family member is currently seriously ill and I immediately thought the worst.”

“They called at half 3 in the morning! I have a sick grandfather dying of cancer, and it was assumed things had taken a turn for the worse. This is a TPS registered number. I hate getting these calls at the best of times. Now they’re ringing at utterly ridiculous times.”

The company claimed the calls had been made by a third party, who had told them that all individuals who were phoned had consented to receiving calls, but this defence did not impress the ICO, who again stressed that companies cannot rely on third party assurances of this type, and must conduct their own checks. Automated calls can only be made to customers who have given explicit consent to receiving them.

The ICO also announced at the same time that another firm had been fined £50,000, leading it to describe Swansea as ‘the UK’s cold call capital’. Six companies in the city have been subject to ICO action in the last three years.

Anne Jones, Assistant Commissioner for Wales, said:

“Our action will send a clear message to callous cold callers operating in Swansea that they must follow the rules.

“We’d previously contacted both of these companies but they showed a blatant disregard for the law by continuing to make nuisance calls. Their action left many people feeling frustrated and harassed.

“Both these firms tried to shift the blame by pointing the finger at a third party. This is not an acceptable defence. It is a company’s responsibility to ensure it does not make marketing calls that break the rules.”

When taking its action back in January, the MoJ said the company had made almost 40 million automated calls over a three month period. They also pressured clients into signing contracts, and took payments, without allowing the clients time to understand the contract terms. The company was in fact in breach of as many as six sections of the Conduct of Authorised Persons Rules.

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