Second Reading

Unsolicited Telephone Communications Bill [HL] – in the House of Lords at 1:31 pm on 8th November 2013.

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Moved by Lord Selsdon

That the Bill be read a second time.

Photo of Lord Selsdon Lord Selsdon Conservative 1:33 pm, 8th November 2013

My Lords, over my years in this House, I have found that two subjects always come to the front and the back of my mind at the same time. Those are privacy and freedom. If we are not careful, we will find that legislation can handicap and control us, bureaucracy takes over, and we lose that most critical quality of individuality. For me, privacy in one’s own home is as important as anything. It is for this reason that, over a period of 10 years, I introduced a Bill on powers of entry, not necessarily to produce new legislation, but to bring forward regulations that would forbid someone to go into a person’s home without permission or without a court order.

I find, too, that if you want to do something here, you start with a Starred Question, and you have a little debate. Then you table a Question for Written Answer, but not like the leaders, who may ask hundreds of questions a year. You are seeking information. If you do not get it, you try a Private Member’s Bill, which effectively opens up the issue for discussion and debate. That is the purpose today. I am very grateful to the Government for giving me permission to speak and to introduce the Bill. Its objective is not necessarily to pass into law but to raise issues for open debate.

Unsolicited telephone communications are commonly known as a nuisance phone calls. I do not know who thought of the term “nuisance” first, but that includes unsolicited live direct marketing calls, automated recorded message calls and silent, abandoned calls. That is as if people were entering your home without permission unless they have said who they are. Many of these calls cause considerable distress. They come under the control, indirectly or directly, of Ofcom. Recent research by Ofcom of UK adults with landline phones found that 82% had experienced a nuisance call over the four-week period of that research. More than 54% reported experiencing a silent call and an estimated 17% an abandoned call. Other research drew attention to the stress and anxiety caused to many recipients by that invasion of privacy, as one might call it, including a report that more than 3 million people were left with a fear of answering the phone and worry about debt selling or payday loans.

That is easily soluble by regulation. We have to bring in this great thing, the European Economic Community. The principle at the moment is that if you use Ofcom, you have a chance to say that you do not want nuisance calls, but that does not actually help you very much. The purpose of the Bill is to say that if you want to receive calls, you register with Ofcom; if you do not want to receive calls, you do not do anything. EC Directive 2002/58 states that it is up to member states to decide whether they have an opt-in or an opt-out policy for marketing phone calls. Therefore, the Bill does not contradict the EC directive, which states:

Member States shall take appropriate measures to ensure that, free of charge, unsolicited communications for purposes of direct marketing, in cases other than those referred to in paragraphs 1 and 2, are not allowed either without the consent of the subscribers concerned or in respect of subscribers who do not wish to receive these communications, the choice between these options to be determined by national legislation”.

I am saying that to stop this invasion of your house or your home, we change the rules, which we can do quite simply in this House—domestically—so that only those who want those calls opt in and everyone else is protected.

The Bill reverses the relevant regulations in the privacy and electronic communications directive. We can do that domestically. Your Lordships will probably be aware that one of the most informed institutions in the world on EEC matters is your Lordships’ House, because of its numerous EU committees. I am advised that it is a simple matter to change the implementation of the EC regulation here in the United Kingdom so that this proposal works.

At present, Ofcom keeps a register of people who have opted out. The principle of leaving Ofcom in control is therefore accepted. Your Lordships have considerable experience here, and from discussions, I have a feeling that officials may say that this is not possible, whereas the Public Bill Office, for which I have great respect, feels that it is. With his wise judgment, my noble friend the Minister will make a decision one way or the other in a few moments.

There is also the fear factor. I never realised how invading your home with telephone calls caused stress. I do not see why one cannot get a response. If we have had 82% receiving nuisance calls over a four-week period, one wonders how many there are.

Which bodies approach you depend on what people are trying to sell you. However, there is a reverse factor here: if you want to speak to any bank these days, normally you are referred directly or indirectly to a call centre, wherever it may be on the face of the earth. How do you know who is at that call centre? You will usually get a Christian name given to you. Now, is that Christian name the name of the young lady who is answering or is it the name of the telephone post? I have found, on many occasions when I have rung on various financial matters, that I get “Tracy” with a different name. Or you have your offshore organisations, where you may ring Calcutta but you have no idea whether or not you are ringing a respectable body. Telecommunications as such have created a great degree of uncertainty.

I hope that your Lordships will accept that I am not trying to do anything complex. I am advised by the Public Bill Office that this is easy and will be almost a stroke of the pen. I beg to move.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office) 1:41 pm, 8th November 2013

My Lords, I apologise to the noble Lord, Lord Selsdon, for not giving him warning that I would speak in the gap. I have, however, informed both the Front Benches. I was not certain that I would be here in time today, which is why I was not able to put my name on the list. I apologise to the House for that.

I speak because of a particular interest of mine arising from my earlier role as vice-chairman of the Financial Services Consumer Panel. We were dealing with PPI and pressed first the Financial Ombudsman Service and then the FSA very hard to take action on its mis-selling. We thought that we had achieved a lot when it was realised that, while the product was not necessarily bad in itself, it was being mis-sold. It took a long time to persuade people of that, but when we had it was clear that a number of them would get redress. I was therefore not ashamed but immensely disappointed to discover that the unintended consequence of that was this absolute barrage of phone calls; many noble Lords, many of whom may not be here today, have recounted stories of being offered money back that they had never actually spent.

As the House will know—there was an exchange on this just yesterday—we are quite chuffed that we have now got a similar move forward on the ability of tenants and landlords who might have been mis-sold something, or mistreated by a letting agent, to take that to an ombudsman. That will become legislation and will come into force some time in the coming year. However, I fear that the same lot of people will again be after rich pickings and will start phoning up tenants and landlords in the same sort of way. We cannot just deal with this problem issue by issue.

The Bill therefore seems extremely timely. I myself have opted out but I still get these calls, mostly from abroad, which do not seem to be caught by the opt-out. One is also not able to trace the number to call back and make complaints. Partly personally, but partly on behalf of those consumer groups that do so much to get things such as redress and then find that that leads to this sort of nonsense, I thank the noble Lord for introducing the Bill and I wish it well.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport) 1:43 pm, 8th November 2013

My Lords, I, too, thank the noble Lord, Lord Selsdon, for introducing the Bill. It comes at a particularly interesting time because it comes on the back of a number of other reports and suggestions for change on this issue. I draw particular attention to the all-party group that has been set up on this issue, of which I am sure he is well aware. Reading what it has said this week, I was struck by how much it chimed with much of what the noble Lord has been saying. It has a list of 15 or 16 recommendations that seem extremely good. If the Bill is to proceed, it would be worth having a further discussion with the officers and that committee to get the benefit of where it has got to in its evidence and support.

In supporting the Bill and wishing it well, I must pick up on something my noble friend Lady Hayter suggested. There are one or two things about the existing arrangements that might be picked up in the debate and discussions, and I would welcome a further session with the noble Lord, if he is happy to do that, because, speaking in my capacity as chair of the StepChange debt charity, I have some thoughts about some of the ways in which those who market and sell financial products prey on vulnerable customers. The noble Lord does not include that in his Bill in particular, but it is an area we might explore together to see whether there is room for movement.

As the Bill is currently drafted, there might be concern about how individuals will grant consent to being on the “can be contacted” list. The essence is straightforward, but if it is to be done by a third party or through an agency such as Ofcom or the TPS, the Bill will have to deal with its rights and responsibilities. It may increase the number of unsolicited calls because being on the list would make an individual’s number available to anybody who wants it. We might have to think through the implications of that.

The downside of making the Bill very restrictive is that there might be problems for those who currently market in that way. One would have to think about how that is calibrated. It is important to recognise that denying consumers the opportunity to receive calls that they might want is an area that we might have to consider with care.

The Bill does not solve the problem that my noble friend Lady Hayter mentioned. If you are currently registered under the TPS, that does not prevent you receiving calls that originate outside the UK. This is a well known gap, and it is something that government has looked at from time to time. When the Minister replies, I hope he will say where we are on this. It is a bit useless to have a situation that prevents calls originating within the UK but does not prevent the very large number of calls that come from abroad.

The Bill does not address firms getting access to consumer lists, whether they are opt-in or opt-out. It may be worth looking again at that. On the one hand, we want to make data available for marketing purposes but, on the other, those data have a marketable value and it is not unknown for these lists to be sold for other firms to make use of them. Perhaps that is where one might want to act to stop unscrupulous firms.

There is a difficulty in the current legislation about issuing monetary penalties. We are not against monetary penalties. They are very useful, and they can be quite sizeable. They ought to be a very effective way of cleaning up this area, but unfortunately the threshold that you have to reach before you apply them is too high. It is something that the Bill could look at.

At the moment, redress is, ironically, very difficult for consumers who are receiving calls, even if they are on opt-in basis. If the caller becomes a nuisance or is acting illegally, there is no redress scheme. My noble friend Lady Hayter made a good suggestion about an ombudsperson.

One of the key problems of the current system is that the ICO and Ofcom share responsibility for regulating this area. That can be okay, but the problem of who has responsibility is compounded by the fact that the ICO is relatively short-staffed and underresourced and Ofcom has similar but different difficulties in this area. Between them, they carve up the field, but they are unable to take on the full range of responsibilities that they would like to take on. If we were to go further on this Bill, it might be worth thinking about how best to arrange the regulation.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip) 1:50 pm, 8th November 2013

My Lords, I make it clear from the outset that the Government very much welcome and appreciate the efforts and concern that my noble friend has shown in highlighting this important issue. I am sure that, for many consumers, my noble friend reflects the feeling that something more needs to be done to deal with this problem.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson of Balmacara, also raised the points about consumers and the redress and improvements we all seek. The Bill is welcome in that it is a timely opportunity for further discussion.

The resolution of this issue is more complex than at first sight it might appear. It requires industry, government and consumers to collaborate if there is to be any chance of success. Unsolicited telephone marketing nuisance calls are certainly topical and have been the focus of vast amounts of correspondence, many Parliamentary Questions, a Select Committee inquiry in the other place and an inquiry led by the All-Party Parliamentary Group on Nuisance Calls, as mentioned by the noble Lord, Lord Stevenson, whose report was published last week.

These reflect the clear fact that, despite the Privacy and Electronic Communications (EC Directive) Regulations 2003 being in place, unsolicited marketing nuisance calls are a source of great annoyance and inconvenience for consumers. Indeed, when I pick up a message which starts, “That’s right!”, I am pretty certain that it is not. I also may well ignore being instructed to press a certain number to get further information. To many, however, and especially the elderly and more vulnerable, as all noble Lords have said, this causes confusion and great anxiety. I wish that there were a magic wand that could be waved to eradicate the problem but, sadly, that is simply not possible.

I assure noble Lords that we are absolutely determined to take action on this issue. That is why the Minister for Culture, Communications and Creative Industries has initiated and led a serious of meetings over the past 18 months which have brought together the key interested parties to press for change. Unsolicited calls and texts are a problem, but we have to be careful that, in dealing with this issue, we do not harm the direct marketing industry, which is a legitimate industry that provides employment and opportunities in support of our economy. The noble Lord, Lord Stevenson, made precisely that point. Direct marketing can be beneficial for consumers—for example, calls from telecoms or energy companies advising on better deals or tariffs potentially save consumers money. An opt-in register, as in the Bill, would severely constrain such activities. We must therefore consider the matter carefully.

What action are the Government taking? From those meetings, we now have clearer and improved guidance and information for consumers, to help ensure that they are aware of where to go to register complaints on regulators’ websites. I realise that, of course, to many of the elderly this may not be an option, but this information is now more consistent and readily available. The consumer organisation Which? has also been engaged in the meetings and has developed a useful mechanism on its website by which consumers are automatically directed to the right place to access information as well as to make complaints.

On enforcement, we have ensured that the monetary penalties that the Information Commissioner’s Office and Ofcom can use have been increased and, equally importantly, used more frequently to fine companies which break the regulations. We have made clear in tasking regulators that, through robust action, they must send a clear signal that those who flout the rules will be caught. We are pleased that, since January 2012, more than £2.3 million has been issued in fines and would want to see more.

Persistent offending companies are also now named and shamed on the Information Commissioner’s Office website, so that those who engage in poor practice are made known to the public, as informed consumers are safer consumers. There is also greater collaboration between regulators, sharing knowledge and expertise to improve compliance throughout. However, we are fully aware that much more needs to be done. That is why our future proposals for nuisance calls were set out in our strategy paper published on 30 July. These include legislating to ensure that Ofcom can share information more easily with the Information Commissioner’s Office. We will be implementing this through a statutory instrument that will be laid shortly, with a view to it coming into force by 6 April 2014 at the latest, if not sooner.

We are also actively considering the scope to legislate to lower the legal threshold the ICO needs to demonstrate before issuing a monetary penalty, which the noble Lord, Lord Stevenson of Balmacara, mentioned. We are assessing the business case and the cost before we take action on this. In view of the large number of nuisance calls relating the payment protection insurance sector, which the noble Baroness, Lady Hayter, referred to, we are also working closely with the Claims Management Regulator. It is welcome to see that the CMR is taking action against claims management companies which fail to comply with the rules.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

The Government have made no progress yet on the funding of the claims management ombudsman. If the Minister is not able to answer now, I hope he can come back and maybe give a report to the House on that.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble Lords Spokesperson (Department for Culture, Media and Sport), Lord in Waiting (HM Household) (Whip)

It is probably best if I write to your Lordships so I can give chapter and verse on that matter.

The main issue in this Bill is changing from the current opt-out requirement to an opt-in system for unsolicited direct marketing calls. There is a feeling that this is unlikely by itself to make an impact on the present situation, as calls to consumers who are registered with the Telephone Preference Service, provided they have not given explicit consent to receive such calls, are already outlawed under the Privacy and Electronic Communications Regulations. Germany has an opt-in system but, according to a study in 2011 by trueCall Ltd, complaint levels are broadly similar those in the UK. The Government’s view is that those breaking the law by calling consumers registered with the Telephone Preference Service are just as likely to ignore the law, regardless of whether there is an opt-in or opt-out system. Tackling nuisance calls would be better addressed by focusing on improving enforcement rather than changing the nature of the register; legislation of this nature is unlikely to be the answer.

The Government will continue to work with regulators, network operators, consumer group representatives, interested Members of Parliament and Members of your Lordships’ House to find solutions. A combined effort by all parties is needed. This is now beginning to happen and we are ensuring that work by the industry is also under way including, for example, the ability to trace calls where the calling number is deliberately withheld or spoofed. This will also help contribute towards achieving more long-term solutions. We welcome the fact that TalkTalk last week launched a network-level solution for its customers and that BT will be displaying full call-line identification for incoming international calls, where available, on its network by next autumn. Last week, the Telephone Preference Service launched its accreditation scheme, TPS Assured, which seeks to improve best practice among companies. We know that there are already products on the market which can help consumers filter calls. We are keen for the UK to take a lead in developing the solutions that put the power in the hands of consumers. We are aware that, as part of the joint action plan to tackle nuisance calls and messages, which was launched by Ofcom and the Information Commissioner’s Office in July, research is being undertaken to see what further improvements can be made to the Telephone Preference Service. All this is extremely welcome.

We take the issues raised in this Bill very seriously and very careful consideration needs to be given to them. The reservation we have about my noble friend’s Bill is not that we do not share the intention to remedy the matter but that we think there is a more effective route to securing what my noble friend’s Bill seeks to achieve. We already have regulations in place that protect consumers, so the focus needs to be on better enforcement in support of them. In addition to the measures noted earlier, we are actively considering proposals for further reform. The recommendations of the report from the All-Party Parliamentary Group on Nuisance Calls, published last week, and the forthcoming report of the recent CMS Select Committee inquiry will be useful in informing further our thinking in this area. The work is ongoing, and the Government will publish their action plan on nuisance calls later this year. I hope that your Lordships will understand that this reflects the importance and urgency of this issue.

The practical way to solve this issue is to get industry and regulators to work together. Like my noble friend, I am eager to find effective solutions, both legislative and non-legislative. In doing that we need to balance the right of business to conduct legitimate direct marketing while strengthening the regulatory framework and industry best practice to target companies that flout the rules. In view of the work, legislative and non-legislative, I assure your Lordships that we are progressing efforts to counter the issue of unsolicited marketing of nuisance calls with vigour.

Photo of Lord Selsdon Lord Selsdon Conservative 2:00 pm, 8th November 2013

My Lords, I am most grateful to the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson. It is so nice to have more support on the opposition Benches than on one’s own. I say nothing against my noble friend, but he is too young to remember those signs on gates outside houses, which said, “No hawkers, no circulars”. He will, of course, know that the reason that I am in your Lordships’ House is to do with telecommunications, because my grandfather was the longest-serving Postmaster General in the past 100 years.

I will give my noble friend a little help and refer him to the wonderful report from the House of Lords Library. However, that report is effectively banned from outside circulation because of information that is deemed as not approved for use elsewhere. Will he give very serious consideration to the all-party group that he mentioned last week? Will he also consider: the DCMS written evidence; the report submitted to the House of Commons nuisance calls inquiry of 10 September 2013; the ICO and Ofcom joint action plan, “Tackling Nuisance Calls and Messages”, of 31 July 2013; the Ofcom landline nuisance calls panel research of 17 May 2013; the House of Commons Library Note, Nuisance Calls: Unsolicited Sales and Marketing, and Silent Calls, of 10 July 2013; and StepChange’s “Got Their Number” campaign of 29 October 2013. I want to make sure that this goes into Hansard so that other people can read it

I can therefore assure the noble Lord that I have at my disposal perhaps as much information as, or possibly even more, than his officials. Therefore, on that expression “foot-dragging”, I never know whether it means you drag the whole of your foot or just your toe when you do it. I would be grateful if he would give consent to perhaps having a small group meeting as quickly as possible so that we can work out the solutions. One of those solutions would be the amendment of that EC directive or part thereof. Maybe his officials might meet with the Public Bill Office upstairs to see how this could be done.

In the mean time, we find that most of the people who suffer the greatest are not electronically enabled. They do not have PCs; they are not “press button to answer” people. They cannot even work an answerphone. However, they feel very insecure when, out of the blue, comes a voice they try to answer but which gives no response. They do not know what these calls are. This is about the uncertainty and anxiety that is created. I thought, for a bit of fun, that I would make a threatening message; I will not repeat it to your Lordships, but I recorded myself so that I could press a button when anyone did that to me and leave them in fear of their life. However, that would probably have got me into serious trouble.

I am very grateful to my noble friend the Minister, who is a very good chap, and will do what he said. I took the liberty—I probably should not mention this in your Lordships’ House—of speaking to his officials. We know that officials are pretty good but, although they often try to direct their Minister, we always work better when Ministers direct their officials. I beg to move.

Bill read a second time and committed to a Committee of the Whole House.

House adjourned at 2.04 pm.