By Mark Fairlie.

Directors of certain types of limited companies which cold-call consumers are now personally liable for fines of up to £500,000 after a change in law came into effect, according to the Information Commissioner’s Office (ICO).

Companies affected are in the personal injury and payment protection insurance claims sectors covering attempted contacts, where the person called, has not opted in to receive unsolicited calls (source: HM Government).

In a Financial Conduct Authority report from June 2018, it claimed that 2.7bn unsolicited calls, texts, and emails were made to adults in the UK offering claims management services out of a total of 3.9bn attempted contacts.

Personal liability

Fines have been levied against companies for unlawful use of telephone and internet communications for years. However, according to BBC News, many fines were never paid because the directors of those companies shut their firms down and then started again with a different limited company.

Following a Freedom of Information request by The Register reader Robert Rijkhoff, it was revealed that

“the Information Commissioner’s Office has fined companies breaking data protection and marketing laws some £17.8m since 2010 – but just £9.7m has made its way into government coffers, a 54 per cent recovery rate”.

Margot James, the digital minister, told the Financial Times that

“(f)or too long a minority of company directors have escaped justice by liquidating their firms and opening up again under a different name”.

Recently, a fine of £260,000 was levied against Easyleads which used automated calling equipment to contact consumers between January 2017 and June 2017. Although the director involved will not be personally liable for the £260,000 because the campaign occurred prior to the introduction of the amended law, he has been suspended from acting as a company director for 6 years.

Rogue directors dialling up £500,000 fines

Industry reaction

Targeted telemarketing, text messaging, and email campaigns are forms of direct marketing. The leading trade body in the UK for the sector is the Direct Marketing Association (DMA).

The DMA runs the Telephone Preference Service (TPS) on behalf of the government. The TPS is a centralised register of consumers who do not wish to receive unsolicited sales calls. By law, any company engaged in outbound telemarketing to consumers must check their calling lists against the TPS register to ensure that they don’t call a subscriber to the service.

The DMA is in broad favour of the policy as it believes that the new rules governing unsolicited personal injury and payment protection insurance claims marketing messages has “forever tarnished…the credibility of responsible telemarketers”.

Recent fines levied by the ICO

Despite their to-date low collection rate on nuisance calls fine issued, the ICO has recently charged:

  • £350,000 for 75m calls
  • £400,000 for 99.5 million insurance calls
  • £220,000 on two home security firms
  • £350,000 for 46m calls
  • £80,000 for selling data lists without informing consumers on how their information would be used.