How much money do you need to make from doing business for you not to care about complying with regulations? If you knew you might get fined the best part of a million pounds for abusing phone number data, for example, how much would you need to make in order to decide to go ahead?
As the financial crisis of 2007/8 demonstrated, once the cash flow hits nine figures, all sense of playing within the rules gets ignored. Lending to borrowers who can’t afford the payments? Packaging those debts knowing they are high risk but labelling them as AAA? Huge profits lead to minimal compliance (at least until the roof falls in).
National Advice Centre Ltd has just provided a prime example of how businesses often choose to ignore restrictions on the use of data if they can make money out of their misbehaviour. It is believed to be responsible for over 6 million outbound calls for claims management services, many of them to households registered with the Telephone Preference Service.
Screening a call list against TPS is a statutory obligation. Unless you are making a service call to an existing customer, you can not make a cold marketing call without the opted-in consent of the individual. Failing to do so is illegal and also another example of the “dark DM” practices which are beginning to be exposed and rolled back by regulators.
In this case, it is the Claims Management Regulator who has just slapped an eye-watering fine of £850,000 on NAC for its rogue dialling. Notably, this is more than the Information Commissioner’s Office could impose for breaches of the Data Protection Act, although less than the ceiling-less fines which Ofcom can apply as the telephony regulator.
With a bit of luck, it will be enough to put the company out of business. It should also serve as a due caution to all the other outbound telemarketing businesses who have turned this channel into a nuisance through their complete disregard of consumer rights and preferences.
It is easy to look on this example as just a reflection of a specific get-rich scheme which bears little relation to mainstream business. Yet the same might have been said of sub-prime mortgages, even though these were on offer from the most blue-chip banks of the time. Their subsequent meltdowns and need for financial assistance revealed that risk outweighs compliance where the profit motive is strong enough.
As the regulatory framework around data and compliance gets tightened, every business will need to take a close look at its data governance. It does not take much for policies to be ignored if there is a buck to be made. Just look at the suggestion that publishers are paying to get fake impression of ads in order to boost their audience figures.
If you are confident that every part of your business is playing by the rules and there is no risk of being fined, congratulations. But making that assumption without having carried out an audit into your governance and compliance processes is foolhardy - and could prove to be an expensive mistake.
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