How do you know when a marketing channel has a problem? It should be when only 4 million out of a possible 33 million targets will accept your messages. It is certainly once mainstream media run relentlessly negative stories about activity in the channel. What puts it beyond doubt is when a government department and a House of Commons Select Committee single you out for their attention.
That is what has happened to unsolicited outbound telemarketing or cold calling. For the last five years, a head of steam had been building among consumers alienated by their landline constantly ringing with offers of claims management, solar power or investment opportunities. (Every consumer has been getting two calls a week on average, according to Ofcom research.)
Once a channel picks up a negative reputation, it becomes hard for reputable brands to defend their activities in the shadow of the abusers. So when cold calls became “nuisance calls”, it was only a matter of time before the whole sector needed to change its paradigm.
In July, the Department for Culture Media and Sport began that shift with its report, “Connectivity, Content and Consumers: Britain’s digital platform for growth” which called for a crackdown on nuisance calls, intelligence sharing between regulators and options for making it easier to take down rogue operators, such as lower thresholds for penalties and tougher fines. (Data practitioners should also be wary of the report’s statement that, “we are also considering whether there is scope to improve clarity around the securing of consumer consent” as this could potentially shift the terms of permission in all channels.)
Worse was to come, if that seems possible. The House of Commons Select Committee on Culture Media and Sport launched its own inquiry into nuisance calls in September, taking oral and written evidence from a wide range of stakeholders. That shone a very bright searchlight onto the issue of why cold calls had spiralled out of control and become a nuisance.
In particular, it put the Telephone Preference Service under significant pressure. TPS was originally established in 1999 to provide an opt-out from unsolicited sales calls and now operates under the Privacy and Electronic Communications Regulations 2003. It has been run by the same organisation throughout that period and notably during the time that registration figures have soared to their current level of around 29 million.
Not that this can fairly be blamed on TPS. For one thing, consumer expectation is out of line with what the service can do, which is only to screen out cold calls from companies willing to licence its file. Service calls are not covered and many consumers forget just who they have had a relationship with or given permission to.
BT described TPS, in written evidence to the Select Committee, as “a good and useful scheme valued by many of our customers.” The telephone network operator added: “It is important, however, to recognise the limits of such a scheme. Customers might mistakenly believe their TPS registration or opt out requests will stop all calls being made to them by companies; it will not. The TPS can only seek to prevent sales and marketing calls being made, not service messages. Perhaps more awareness may help to manage customer expectations.”
The submission continued: “Although the effectiveness or otherwise of the TPS has been called out as being an area of specific focus, we believe that there are many other areas of the e-privacy rules which are flouted by marketers, and which can cause just as much, if not more, harm if disregarded; automated calls about PPI and debt management being an example. Companies that flout the rules in one area are more likely to flout the rules across all areas, including those of the TPS, so any ineffectiveness in the TPS would be mirrored in other areas.”
Frustratingly, the TPS, together with the Direct Marketing Association and others across the industry had been making somewhat desperate attempts over the previous couple of years to get action taken on nuisance calls. It was stressed that existing regulation could help, but only if it was properly enforced. The fact was equally stressed that much of the volume of objectionable calls came either from companies with no regard for the law or from overseas territories beyond the reach of UK authorities.
In its response to the inquiry, the Information Commissioner’s Office appeared to try to deflect criticism away from its own lack of action on the matter. Director of operations Simon Entwisle said: “The simple fact is that the law only allows the ICO to take action against the worst offenders. A change in the law would allow us to target more of the companies making these cold calls, and would have a noticeable effect for consumers. This could be a game-changing improvement to how we can stop unwanted calls.”
He added: “There’s a balance to be struck between a direct marketing industry that relies heavily on making calls, and consumers who feel they’re being bombarded. It’s for MPs to decide where the balance lies, but I think it’s fair to say that most people probably don’t think the law’s getting it right at the moment.”
That deft swerve made it appear that the DM industry as a whole was responsible for the problem of nuisance calls, rather than a small handful of “black hats”. It also ignored the failure of the ICO and Ofcom to work together on a solution. Only in early 2013 did this finally start to happen, with several joint initiatives aimed at identifying where the real problems were being created and levying the first significant fines - the largest of these being in June of £125,000 on Nationwide Energy Service and £100,000 on We Claim You Gain for failing to screen against TPS before calling.
John Mitchison, head of preference services, compliance and legal for TPS, notes that: “The political temperature is interesting - for quite some time things have been hotting up. We have started to see a huge increase in the number of complaints about calls, which is why we have been lobbying the ICO for some time to do more about that. Companies who were doing bad things and not screening weren’t getting called to justice.”
That call does seem to have been answered with the new joint action. But as Mitchison adds: “One of the first things we need to get across is that there is no silver bullet. There have been a lot of calls for new legislation, but that wouldn’t solve the problem. Companies not following the existing law won’t follow new laws.”
Withholding caller ID is one way in which rogue businesses evade enforcement since it makes it hard for the consumer to complain. Mitchison also stresses that a third-party opt-in does not remove the need to screen against TPS, even though this defence is often used. “We clarified that a year ago with the ICO and they have now set out guidelines on the use of third party data,” he says.
The end of October saw the launch of TPS Assured, a new service which audits companies and accredits them for compliance. “It brings all of the best practice together into one place,” he says. That includes looking at data from automated diallers to provide a genuine insight into practices in a company.
“We would like to think it helps legitimate companies to differentiate themselves from the rogues and it provides them with an opportunity to come up to scratch,” says Mitchison. But he admits: “It won’t stop people from breaking the law.” For that to happen, the telephone network operators will need to work with Ofcom to come up with a technical solution that cuts out calls at source - a challenge they have only just started to face up to.