Cold-calls put on ice by new legislation

New legislation, which came into force on 08 September 2018, has been put in place to combat unsolicited calls by companies providing claims management services. The new laws apply stringent restrictions on when such calls can be made. The change will likely be welcome news to consumers, many of whom will be used to (and, no doubt, tired of) receiving unsolicited direct marketing calls from claims management companies (CMCs) dealing predominantly with PPI and personal injury claims.

Under the old legislation, CMCs could contact individuals by phone unless they had opted out, which the recipient could do during the call or by registering on the Telephone Preference Service. On 08 September 2018, s35 of The Financial Guidance and Claims Act 2018 amended the Privacy and Electronic Communications (EC Directive) Regulations 2003, inserting regulation 21A to stop direct marketing calls by CMCs unless the individual has previously given their consent to be contacted, or has subscribed to receive such calls.

The change in the law will now require CMCs to ensure that individuals they want to contact have opted-in and given their consent, before calling. If a CMC is found to communicate with an individual who has not opted in, that person can report the company and/or number to the Information Commissioner’s Office (ICO) who will investigate further. The ICO can apply fines of up to £500,000 on any company found to have violated the new laws.

There have recently been clear indications from the ICO that calls from CMCs are very much on its radar. In the ICO’s report on nuisance calls and messages published in August this year, it identified calls regarding accident claims as the category most reported by consumers in June and July 2018. The report also identified a spike in the number of reports of both automated and live calls in July 2018, following the implementation of GDPR, as more consumers started to gain awareness of their rights. Against that background, the ICO appears likely to come down hard on CMCs contravening the new laws.