OFFICE OF FAIR
TRADING News Release (60/09) issued by COI News Distribution Service
on 25 May 2009
The OFT has told
six debt management businesses and four cold-calling companies to
stop using unsolicited and misleading calls to advertise their
services or face formal enforcement action.
The action has been taken after the OFT and the Information
Commissioner's Office received complaints from consumers that
they had been cold-called either without prior consent or despite
registering with the Telephone Preference Service (TPS). The OFT
also found that most of the information given to consumers was
potentially misleading or inaccurate, or missed out vital facts
about the purpose of the call and the identity of the caller, for example:
* some calls misled consumers into believing that they were one
of the 'few chosen individuals' contacted as part of a
government scheme to help wipe out consumer debt;
* some recipients were transferred to a commercial debt
management business on the pretext of talking to a not-for-profit
debt adviser; and
* once referred to a different business, consumers were often not
told that there was a fee payable for both the initial advice and
the debt solutions offered.
The businesses warned today may also have broken the law by
pestering individuals who had not given their consent to be called
and/or who had registered to the TPS.
Nigel Cates, Deputy Director of Consumer Credit, said:
'Taking advantage of people who are suffering distress
through debt problems is completely unacceptable and this practice
of illegal or misleading cold-calling for debt management services
must cease immediately. The current economic climate means that it
is vitally important vulnerable consumers are protected. We will
not hesitate to take action against any business that uses
misleading calls to advertise debt management services.'
Mick Gorrill, Assistant Information Commissioner at the ICO, said:
'Under the Privacy and Electronic Communications Regulations
(PECR), organisations should not make automated marketing calls
without the prior consent of the subscriber. The ICO has received
a large number of complaints about automated marketing calls
promoting debt management schemes. We have worked closely with the
OFT on this issue and welcome the action taken.'
NOTES
1. The OFT is not able to name the 10 businesses warned about
unsolicited cold calling because of disclosure provisions under
Part 9 of the Enterprise Act 2002.
2. This action stemmed from evidence received from complainants
and submitted to both the OFT and the Information
Commissioner's Office (ICO) that these companies were
engaging in practices, contrary to the Privacy and Electronic
Communications (EC Directive) regulations 2003 (PECR) and the
OFT's debt management guidance.
3. The OFT has worked in partnership with the ICO on this issue.
It supplemented OFT complaint information by providing vital
evidence regarding a number of licensed companies.
4. The OFT published Debt Management Guidance for licensees in
December 2001, updated in September 2008. This outlines minimum
standards expected of licence holders providing debt management
services. It states that advertisements and other promotional
material must not mislead, either expressly or by implication or
omission. Marketing includes texts and faxes as well as telephone,
and the use of such mediums for marketing purposes will also need
to comply with the Guidance. Whilst the use of cold calling by
telephone as a means of marketing is not prohibited by the
Guidance it is implicit that such business practices must be
transparent and must not mislead consumers either expressly, by
implication or omission.
5. Whilst the use of cold calling by telephone as a means of
marketing is not prohibited by law there is legislation in place
which regulates how it should be done. This provides that a trader
must not transmit, or instigate the transmission of,
communications comprising recorded matter for direct marketing
purposes by means of an automated calling system unless prior
consent is provided. It also says that a trader must not use or
instigate the use of, a public electronic communications service
for the purposes of making unsolicited calls for direct marketing
purposes where the subscriber has notified the trader that they do
not wish to receive such unsolicited calls, or where the number of
the line in question has been registered with the Telephone
Preference Service (TPS).
6. Consumers who are concerned about automated cold calls should
contact the ICO in the first instance. For further information,
see http://www.ico.gov.uk.
7. Consumers wishing to avoid receiving unsolicited and unwanted
calls may wish to contact the TPS. The TPS is a free service
administered by the ICO. It allows consumers to register to opt
out of receiving unsolicited sales and marketing telephone calls
to their home or mobile telephone numbers. Further details can be
found at http://www.tpsonline.org.uk/tps
8. For advice on dealing with debt, see Directgov at http://www.direct.gov.uk/en/campaigns/RealHelpNow/index.htm
or visit your local Citizens Advice bureau.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499
enquiries@oft.gov.uk
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from:
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