Nuisance calls, end of the line?
The more things change, the more they stay the same. At least, that’s what it may seem like if you’re a director.
New changes in legislation can result in directors being held liable for nuisance calls from companies they represent. So, regulations change but directors are again facing the risk of personal liability for actions within their company.
The Financial Conduct Authority (FCA) says that in the last 12 months, around 2.7 billion unsolicited calls, texts and emails were made to people offering to help them make a claim.
This is equivalent to approximately 50 calls, texts or emails being made to every member of the adult population.
Opt-In Now Required for Direct Marketing Calls
The new regulation, which came into effect 8th September 2018 requires an ‘opt-in’ by an individual before a company can legally make cold calls offering claims management services. It is an amendment to the Privacy and Electronic Communications Regulations (PECR) and will allow companies and directors to be fined if the regulations are not followed.
In the past, an individual had to ‘opt-out’ to stop receiving nuisance calls by either registering with the free Telephone Preference Service (TPS) or removing consent for future calls when they are contacted by a company. With this newest change, a company can only contact those people that ‘opt-in’ (often by selecting ‘yes’ on an online form to receive information such as phone calls). The aim is to decrease the number of nuisance calls people in the UK receive by requiring firms to limit cold calls to only these people that have agreed to it.
Government Includes Director Liability for Nuisance Calls
We’re all aware that the previous system did not seem to deter unscrupulous companies from nuisance calls, even when individuals had registered with the Telephone Preference Service or had asked to be removed from calling lists. However, almost half the companies fined for this in the past liquidated to avoid paying fines, and then started the company again under a new name.
Adding director’s liability is an attempt to address this. While it is designed to go after companies that try to avoid paying fines by dissolving, it certainly puts additional risks on all those who hold director positions. Operating along the Insolvency Service’s director disqualification regime, these fines can be levied against multiple directors and directors that have resigned from their position.
Impact of Changes on Directors
The new legislation is causing directors to take a closer look at their company’s direct marketing practices. While companies may still rely on cold calls, they need to create policies that ensure they comply with changes in legislation. Fines of up to £500,000 can now be issued for failure to follow the new legislation.