03Oct

After an appeal to the First-tier Tribunal (General Regulatory Chamber) Claims Management Services, a West Sussex-based payment protection insurance and packaged bank account claims company had its fine for compliance failings reduced from £198,000 to £99,072. The Tribunal, headed by Judge Alison McKenna, did however agree that the company had breached the rules of the Claims Management Regulator (CMR) at the Ministry of Justice (MoJ), and that it was indeed appropriate for enforcement action to be taken by the Regulator.

The areas of the Conduct of Authorised Persons Rules breached by the company were:

  • General Rule 2d – the requirement to maintain appropriate records and audit trails
  • General Rule 2e – the requirement to confirm that any referrals, leads or data obtained from third parties have been obtained in accordance with the requirements of appropriate legislation and the MoJ’s Rules
  • General Rule 5 – the generic obligation to observe all laws and regulations relevant to a company’s business activities

Specifically, following its own investigations and complaints made to the Telephone Preference Service (TPS), the MoJ concluded that the company had made contact with 65 consumers who had registered with the TPS, and that the company was unable to demonstrate that it had received the necessary consent for those contacts. The company eventually admitted to making unauthorised contact with nine of these individuals, blaming a “human/programming error”, but maintained that all of the other 56 recipients of its calls had given the appropriate consent.

The Tribunal noted that the relevant legislation states that any “opt-in” consent by a TPS-registered individual must be “unambiguous”, i.e. the person must be clearly told that they are consenting to receiving marketing calls from the company in question.

The MoJ’s case for being able to take enforcement action largely centred around criticisms about the format or speed of the “opt-in” calls. The third-party company simply listed a number of companies who may make contact with the consumer during what was described as “a fast, recorded message at the end of the call.” The Regulator said that this could not amount to “freely-given, specific and informed” consent, which is the wording used in guidance from the Information Commissioner’s Office (ICO).

It is noted that the recorded “opt-in” calls did contain a request for the customer to give consent to receiving marketing calls. However, only after this consent has been given are the companies who may make contact listed in the recorded message. After the list of companies has been read, the call cuts out and the recipient is given no opportunity to register any dissent. Regarding this, the Tribunal sums up its concerns by saying:

“The consumer is given no opportunity to consent to contact from some third parties but not others, no opportunity to withdraw consent after hearing the names on the list, and no opportunity to agree to some means of communication but not others e.g. texts but not phone calls. Consequently, the consent requested (and given in the calls we heard) is unexpurgated.”

The Tribunal also criticised the company’s policy of destroying call recordings after six months, saying:

“We conclude that appropriate records and audit trails were not kept by [name of company]. We agree with the CMR that, in a business that involves telephoning member of the public, it would be appropriate to keep recordings of those calls for longer than six months, albeit that we accept they cannot be held indefinitely. The purpose of the record-keeping is to be able to demonstrate compliance with the law, and it is unlikely that the CMR/OFCOM/the ICO would have completed its investigations into any complaints within six months.”

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