HC Deb 26 April 2002 vol 384 cc642-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]

2.24 pm
Kevin Brennan (Cardiff, West)

I am delighted to have secured this debate on the regulation of telephone marketing. I am also delighted that it will be an all-Celtic exchange with my hon. Friend the Minister for E-Commerce and Competitiveness. Many of our Anglo-Saxon colleagues will be engaged elsewhere, probably in nuisance telephone calls to members of the public on behalf of political parties. I know that this is not always the most popular slot for Members or Ministers, and I am grateful to my hon. Friend for coming to reply on behalf of the Government.

This Adjournment debate, like many others, arose directly from constituency casework. A constituent contacted me to complain that she was receiving marketing calls despite being registered with the telephone preference scheme, which should prevent that from happening. She even went to the additional trouble of going ex-directory, but continued to receive such calls. Apparently, the problem has become worse because of the introduction and more frequent use by tele-sales companies of automated dialling equipment. Many people are not aware of that technology; it involves computers that randomly generate telephone numbers and call people to sell them things. It is sometimes known as power dialling.

I wrote to the Secretary of State for Trade and Industry, who confirmed that this practice could occur, and I received a written reply from the Minister for E-Commerce and Competitiveness, because the matter fell under his responsibilities. With your permission, Mr. Deputy Speaker, I should like to quote from some documents as I go along, to tell the story of how the matter developed. In the Minister's reply, he confirmed that an ex-directory listing by a customer does not in itself prevent direct marketing calls. An ex-directory listing with BT means that the subscriber will not be included in the BT Phonebook, nor will BT give out details of the subscriber through their directory enquiries service. This will serve to stop calls from direct marketers using the telephone directory as a source of contact information. However, direct marketers who are using other sources for contact information, such as that collected from promotional questionnaires and flyers, or through dialling numbers at random or in series, will be unaffected by an ex-directory listing. I believe that most people would be surprised to find out that registering one's number as ex-directory does not provide protection against calls from direct marketers. To achieve that it is necessary to register actively with the telephone preference scheme, but, in fact, that scheme in itself does not protect the customer from market surveys by companies. I shall return to that point towards the end of my remarks, with some suggestions for the Minister.

Two more constituents then contacted me to draw my attention to an even more worrying aspect of the technology and practice of power dialling. The first, Gill, contacted me because she had been receiving silent phone calls—very worrying and disturbing—and, not being a vulnerable person but someone who was active and was worried that she might be being stalked, she contacted the nuisance calls bureau. She discovered that the silent calls were emanating not from someone who was stalking her or trying to frighten her, but from a commercial organisation, and were being produced by power-dialling equipment.

The second constituent, Simon, contacted me because he had been receiving phone calls at regular two-hourly intervals. When he picked up the receiver, a silent call resulted, follow some time later by a click. He investigated and, interestingly, when he contacted the nuisance call bureau of his telephone provider, NTL, was told that if it was a nuisance phone call that might result in criminal action—that is, from someone with malicious intent—the bureau staff would contact the police, but if a commercial operator was responsible NTL would contact the commercial operator but would not tell Simon who had been calling him.

The problem with such calls is that when the recipient tries to discover who is behind the phone call by dialling 1471, he hears the message: The caller withheld their number", which makes it very difficult indeed to discover what is going on, and very worrying.

On 31 August 2001, I wrote to the Minister about that problem. On 1 October I received a reply, in which my hon. Friend confirmed that power dialling silent calls did occur.

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]

Kevin Brennan

The Minister's letter states: This equipment automatically transfers the call to an available operator if the call is answered. Although the system can give the direct marketer certain efficiency savings, it can also result in silent calls which are subsequently terminated at times when the number of answered calls exceeds the number of available operators …registration with the TPS"— the telephone preference scheme— should offer her protection from all direct marketing calls, irrespective of how they have been dialled. To address the issue my Officials have arranged to meet with Oftel, the ICO"— the Information Commissioner's office— both BT and NTL's nuisance calls bureau and the Direct Marketing Association at the beginning of November. I will update you on their findings in due course. I have yet to receive an update, and I hope to hear from the Minister about the outcome of those consultations, what the current position is, and what progress is being made in dealing with the problem.

As the Minister suggested, I contacted the telephone preference scheme. I received a reply on 16 November as follows: Whilst registering with the TPS may well stop silent calls if the cause of them is a power dialler used by a telephone marketing company the use of auto diallers is widespread and it could be the call is not initiated by a direct marketing company. That shows that, as I said, one can still receive nuisance calls from market survey companies in particular. The letter continues: One of the main problems is identification of the companies making silent calls and sanctions that can be taken against them. Until the caller can be identified and contacted there is no way of telling if the attempted call was an unsolicited sales and marketing call … TPS is anxious to see enforcement action taken against companies who do not abide by the Telecommunications (Data Protection & Privacy) Regulations 1999 … TPS is keen to see the problem of silent calls reduced as the increase in registrations as a result of recommendations that registering with TPS will solve the problem is an unforeseen cost burden to running the service. The Government are recommending that people register with the telephone preference scheme to get over the problem, but according to the letter—from Tessa Kelly, director of compliance operations for the scheme—doing so imposes unforeseen cost burdens on the service. In November, I received an answer to a parliamentary question to the Minister, which confirmed the existence of this particular practice.

Following those letters and constituency cases, I tried to find out exactly what was going on, and in that regard I am grateful to the House of Commons Library for its help. I discovered that two types of power dialling exist, the first of which is not so pernicious. We all accept that tele-sales calls are regrettably necessary, and the first type of power dialling makes outgoing calls only when an agent becomes free. In that way, it can be guaranteed that an agent is available to take successful call attempts. In other words, on answering the telephone, a human voice explains who they are, which company they represent and what they are trying to sell. Most people would find it reasonable to receive a call of that type if they have not registered with a telephone preference service.

It is the second and more pernicious type of power dialling to which I object. It is known in the industry as predictive power dialling and is a version of power dialling that attempts to improve agent productivity by increasing their talk minutes per hour. The computer application that makes the outbound calls uses predictive analysis to maximise the agent's telephone talk time. That is achieved through a combination of predicting when an agent is likely to become free and starting an outbound call to coincide with it or, alternatively, through predicting the number of call attempts that are statistically answered.

For example, if only one in three call attempts are successful, the system can make three simultaneous outbound calls at the same time although only one agent is free. If people answer the telephone in greater numbers than the computer predicts, which is bound to happen from time to time, the unfortunate person at the other end of the line will receive a corporate silent nuisance call. I am sure the Minister will agree that that is unacceptable. We need to ensure that safeguards are in place to protect the citizen from such corporate nuisance calls.

Oftel started to review the use of power dialling in June last year with a view to relaxing further the restrictions on the use of that type of technology. However, it admitted in the consultation documents that there is huge potential for abuse of the technology. As a result, it issued a statement on 18 January 2002 in which it said that the current regulatory position should mean that the calls do not take place. The director general of communications said: The use of automatic equipment licence condition (the ACE Condition) prohibits the use of automatic calling equipment … where the resultant call does not consist of live speech, unless written consent has first been obtained from the recipient of the call. The ACE Condition is intended to protect consumers from abuses, including … using ACE to initiate calls with insufficient operators available to take the calls when answered, resulting in customers receiving either a recorded message or just silence. The document goes on to say that Oftel decided to relax the restriction requiring prior written consent for such a call. However, regulations are in place to stop them. In theory, therefore, despite the dilution that Oftel announced to the regulations on power dialling, consumers should still be covered by the existing protection. However, it seems from the information that I receive from constituents that they are not.

There is little awareness of the problem and only a low level of protection. There have been one or two references to the issue in the public domain and the press. Sue Arnold wrote an article in The Independent as long ago as 30 January 1999 in which she described how she received silent telephone calls at 27 minutes past three every afternoon which were from a corporate source. In finding out about the series of nuisance calls that she was receiving, she came across the term "power dialling" for the first time. Furthermore, I discovered a letter as recently as 17 December last year in the Daliy Express, which was from a Mr. Peter Ivers of London SE8. He wrote: Having been subject to such calls for about a year, I rang BT to request an ex-directory number and it was then that I was informed that 'power-dialling' was probably to blame and that the companies concerned had been asked to include a recorded message informing the recipient of the nature of the call but they had declined to do so. If anyone out there has any ideas on how to combat this problem, I would like to hear them. That is partly why we are here today; we want to hear the Government's views on that. Clearly, this problem is still going on. Incidentally, if the company included a recorded message telling the recipient the source of the call, that would technically be illegal, because the call would not have resulted in live speech but in recorded speech.

I believe that what I have uncovered is just the tip of the iceberg. This morning, a constituent who heard that I was raising this subject in Parliament sent me an e-mail via the House of Commons website constituency locator service to say that he was pleased that I was raising the issue. As one of my constituents, he wanted to tell me—I shall not repeat the words that he used, for fear of breaching the convention of the House—that he had had many of these calls early in the morning and at weekends. He said that he would not call himself a vulnerable member of society, but that he genuinely thought that he had a crank caller. When he reported the calls to BT's nuisance calls line, he was given a number to ring and he was able to get his name removed.

This should not be happening. Many people out there are not going to the trouble of contacting the nuisance calls bureau because they are living in fear of the kind of calls that they are receiving. Thousands of people are suffering in silence. Perhaps today's debate might help them to come forward and raise their concerns with Members of Parliament.

It is not clear that there has been sufficient will to deal with the problem until now, but the Government are now aware of it. With power dialling, the balance of rights between the citizen and the corporate world is wrong. There is a lack of public understanding of the problems, and there is a confusing number of bodies involved—TPS, Oftel, the Information Commissioner, DTI, NTL, BT, representatives of the industry and the Direct Marketing Association. It is a confusing picture for members of the public.

We need to establish clear principles. There should be no predictive power dialling, and the pernicious form should be completely stopped. Companies should not be allowed to withhold their numbers when they ring people up to sell them something and there should be rapid action against an abuse of that. Telephone preference scheme registration should also be included when somebody registers as ex-directory, unless the consumer opts out from that registration.

As I said earlier, tele-sales can be a good thing. Many people enjoy the benefits of being able to buy goods and services over the telephone, but it is open to abuse. I have not even mentioned some of the overseas scams of which some other Members of Parliament are aware, in which people are phoned from overseas and have to ring back high-premium numbers. I would like to know that the current regulation is being enforced and to hear the outcome of the Minister's talks.

One of my constituents suggested an alternative to registering with the telephone preference scheme: when people receive one of these calls, they should politely ask the caller for the home telephone number of the directors of the company involved so that they can phone them up in case they have anything to sell—perhaps a useful way of trying to get rid of that old kitchen table.

2.44 pm
The Minister for E-Commerce and Competitiveness (Mr. Douglas Alexander)

I congratulate my hon. Friend the Member for Cardiff, West (Kevin Brennan) on securing this debate. As he said, the motivation was his concern for his constituents, which is widely recognised across the House. I am fully aware that the subject of the debate can, as we have heard, rouse strong feelings and generates much interest, not least from individual constituents. I shall seek first to put the issues into context.

Used responsibly, telephone marketing is a useful and valuable tool for businesses; used badly, it can be the cause of serious nuisance and inconvenience. It is therefore important that the right protections are put in place. I shall outline what the current rules say about unsolicited direct marketing by phone, and the individual subscriber's right to opt out, and then move on to what people can do if they are getting those unwanted calls.

The current rules originate from the EU telecoms data protection and privacy directive. Under the UK implementing regulations, we introduced statutory opt-out rights for individual phone subscribers who do not want to receive unsolicited direct marketing calls. They can register with the telephone preference service, or TPS, which is run by the Direct Marketing Association under supervision by the telecoms regulator Oftel. Registration is fairly straightforward: a telephone subscriber can do it by phone, fax, post or e-mail, and it is free.

The regulations also give individual subscribers the right to opt out of calls from particular direct marketers. No one may make an unsolicited direct marketing call to someone who has previously instructed them not to ring again. People may object to calls from a particular marketer without wanting to opt out on a blanket basis, and the rules accommodate that option for the individual telephone subscriber. Of course, that raises the question what are the sanctions for breaches of the regulations.

The Information Commissioner has powers to enforce the rules and will take action against direct marketers who persist in breaching the rules despite being warned of their obligations. Ultimately, failure to comply with an enforcement notice issued by the commissioner is a criminal offence punishable by a fine. Alongside those provisions for the individual telephone subscriber stands the position for corporate subscribers. No one should suffer in silence if they are being called despite having registered with the TPS or opting out of calls from particular marketers. Anyone who finds that they are being called despite opting out should complain to the TPS, if they are registered, or to the commissioner's office.

The TPS does not apply to corporate subscribers, however. The Government took that decision following extensive consultation before the new regulations were introduced. Many businesses both sell and buy products and services over the telephone. However, although corporate subscribers do not have a blanket opt-out right, as with the TPS, they do have the right to instruct individual callers not to make further calls to them. That right comes from the Telecommunications Act 1984 licensing regime, which requires anyone making that kind of call to cease doing so on receipt of a written request. Those rules are enforced by Oftel.

Yet it remains the case that those rights are enforceable only where the source of direct marketing calls can be traced and people know who is behind a rogue call. Consequently, as part of all direct marketing calls, the caller must give their name and, on request, a freephone telephone number on which they can be contacted. If callers withhold that information, telephone operators are able to trace the source of calls and disclose it to subscribers and/or the relevant enforcement body.

My hon. Friend identified the problem concerning the significant number of complaints received recently about the use of power diallers by direct marketers. These systems, also known in the industry as auto-diallers or predictive diallers, generate calls automatically but can cause silent calls if there are not enough operators available at the direct marketer's end to handle all the calls put through. When the call reaches its destination, if there is no operator available, a silent call results.

I stress that whatever phone system a direct marketer is using, he or she must still respect registration on the TPS or any direct request not to make any further calls. Direct marketers who fail to do so risk breaching the regulations and, therefore, enforcement action. When subscribers receive silent calls, their service provider should be able to trace their source. I understand, however, that marketers are now taking action themselves to sort out that problem. The DMA issued new guidelines in January which all responsible marketers will want to follow. These are to be incorporated into the DMA's code of practice, which is binding on its members.

My hon. Friend referred to individuals dialling 1471 to identify the person making the call. Among other things, the new guidelines require direct marketers to provide calling line identification when using that kind of calling system. The effect is that the source of any failed calls can be traced by dialling 1471. The marketer must ensure that anyone who rings back on the number thus provided is given clear information about the marketer's identity and how to stop any further calls. The guidelines will also strictly limit the number of failed calls that systems can make.

The new guidelines result from an industrywide initiative and follow extensive consultation that involved, among others, representatives of telephone operators' nuisance call bureaux and of enforcement agencies including the Information Commissioner's office, Oftel and ICSTIS—the Independent Committee for the Supervision of Standards of Telephone Information Services—as well as my officials. Although I regret the delay in responding to his earlier letter, I assure my hon. Friend that the work has been continuing as I have described. I am sure that the new guidelines will be welcomed by hon. Members on both sides of the House as a significant step forward.

I agree that silent calls of any kind can be distressing. If silent calls are made with malicious intent, consumers should contact their telephone operator. Operators co-operate with police to trace any such calls, and such investigations can lead ultimately to prosecution and fines, or imprisonment for those found guilty of making malicious calls with intent.

The new regulations I mentioned are making a real difference as subscribers and marketers become more accustomed to the new system. Surveys carried out on behalf of the TPS show that 27 per cent. of the UK population is now aware of the service—an increase of 5 per cent. over last year. The number of direct marketers that check their lists with the TPS has also increased considerably. Some 1.8 million subscribers are now registered with the TPS. Despite rising registration numbers, the TPS reports that the number of complaints has remained steady, at approximately 300 a week, which indicates increased compliance.

My hon. Friend will be interested to hear that there is to be an opportunity to review how the regulations are working and whether improvements can be made when we implement the communications data protection directive, which is the updated version of the directive on which the current rules are based. The new directive is expected to be adopted later this year for implementation in 2003. Not least because of the degree of interest in these matters, we will run a consultation exercise before we implement the new rules, and I shall certainly welcome Members of Parliament and their constituents giving their views as part of that process.

Although real progress has been made, we now have a significant opportunity to take forward this important work. Our ongoing challenge is to ensure the appropriate balance between the use of responsible telephone marketing as a useful and valuable tool for business and appropriate protection from serious nuisance and inconvenience resulting from misuse.

Question put and agreed to.

Adjourned accordingly at eight minutes to Three o'clock.

Forward to