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Peers agree to cold-calling ban with strong penalties for those who use illegally obtained data

Buscombe: Complexities in legislating in this area

The government yesterday got its way with the form of the cold-calling ban that will be imposed on claims management companies (CMCs) and said it would be backed up by hefty fines on anyone who uses illegally obtained data.

Following discussions between the Conservatives and Labour [1], the House of Lords accepted the ban introduced by the government in the House of Commons stages of the Financial Guidance and Claims Bill, despite concerns that it did not go far enough.

The bill will insert a provision into the Privacy and Electronic Communications (EC Directive) Regulations –  which govern unsolicited direct marketing calls – to ban cold-calls in relation to claims management services, unless prior consent has been given.

Department for Work and Pensions minister Baroness Buscombe told peers: “This amendment takes the onus away from the individual to opt out of such calls being made to them and puts the responsibility back on the organisation to do its due diligence before making such calls…

“There are complexities in legislating in this area, including issues relating to EU frameworks. But I am confident that the amendment will have the effect of making unwanted calls about claims management services unlawful.”

Recognising concerns about the commercial use of illegally obtained data, she continued: “The measures in the bill will be complemented by existing and forthcoming data protection legislation.

“Where personal data is obtained through an unlawful cold call, the further use of that data—for example, to make further calls in the future—would be contrary to the Data Protection Act.

“The Information Commissioner’s Office can issue fines of up to £500,000 for breaches of the Data Protection Act, although this will be raised significantly—to approximately £17m or 4% of a company’s turnover—through the forthcoming General Data Protection Regulation and the Data Protection Bill that is currently going through Parliament.”

Liberal Democract Lord Sharkey, who had been leading the efforts to tighten up the ban, was satisfied with these commitments and did not pursue amendments that he had planned to put.