The government has issued a wide-ranging response to criticisms of whether its plan to ban cold-calling will be effective, saying that making the Financial Conduct Authority (FCA) responsible for it would risk “confusing consumers and industry”.
John Glen, economic secretary to the Treasury, said making the Information Commissioner’s Office (ICO) responsible instead would ensure that the ban was “plugged into the existing framework”.
The government’s proposed ban on claims management cold-calling contained in a new clause was added earlier this month to the Financial Guidance and Claims Bill.
The clause prohibits live unsolicited direct marketing telephone calls in relation to claims management activities, except where the recipient has given explicit consent to receiving such calls.
Labour contended that this did not go far enough, and it also proposed making the FCA, which under the bill is taking over regulation of claims management companies (CMCs), responsible for enforcing the ban.
In a letter to Gareth Thomas, Labour MP for Harrow West, Mr Glen said any call made “for the purposes of direct marketing in relation to claims management services” would be unlawful under the clause.
“This is unless the receiver has explicitly consented to that call being made to them. The clause applies to anyone calling to market claims management services, not just those firms providing claims management services regulated by the FCA.”
Mr Glen said that under the Privacy and Electronic Communications Regulations (PECR), the ICO had “tough enforcement powers”, including the ability to fine firms based in the UK up to £500,000.
Mr Glen said the ICO had issued fines totalling £2.83m in 2017 and, under the upcoming General Data Protection Regulation, would be able to impose fines of up to €20m for data protection breaches.
He said that in their joint action plan, published this month, ICO and Ofcom had reported a decrease in the total of complaints received about direct marketing for the second year in a row, and the ICO was more than doubling its workforce.
Mr Glen said “separately tasking” the FCA with the ban would be “inconsistent with the framework we already have”, and it would also “risk confusing consumers and industry” to have “different cold-calling regimes for different sectors”.
He said the FCA would “have a role to play” and would be consulting on new rules for CMCs. He suggested the FCA could take breaches of PECR into account as part of a CMC’s suitability to carry on a regulated activity.
On consent, the economic secretary said that to be valid, it must be “knowingly and freely given, clear and specific” and firms must keep records of when consent was obtained and what it included.
“There is no fixed time limit after which consent automatically expires but consent does not remain valid forever.”
Mr Glen said this depended on the context and whether it was reasonable to treat it as an indication of the person’s current wishes. He added that he was “confident that the government is taking the right approach”.