Karen Wagstaffe surveys the fallout from the first fining of a text spam agency
The Information Commissioner’s Office (ICO) has ordered the owners of Tetrus Telecoms to pay £440,000 after an 18-month investigation found it sent as many as 840,000 unlawful spam texts a day over three years.
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These huge volumes of unsolicited text messages, many of which were relating to PPI compensation, were sent without the consent of the recipient and without identifying the company as the sender, and the fine is the first imposed by the ICO for a serious breach of the Privacy and Electronic Communications Regulations since it received these powers in January 2012.
Examples of the text messages sent out by Tetrus Telecoms include:
– CLAIM TODAY you may be entitled to £3500 for the accident you had. To claim free, reply CLAIM to this message.
To opt out text STOP. Thank you– URGENT! If you took out a Bank Loan prior to 2007 then you are almost certainly entitled to £2300 in compensation. To claim reply ‘YES’
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By GlobalData
The owners of the business were making between £7,000 and £8,000 a day by selling on the details of customers who replied to
these texts to other companies, such as claims management companies (CMCs), leading to the staggering increase of alleged
complaints within the automotive industry.
Hefty enforcement fines imposed on such companies will serve as a severe warning to other firms sending similar texts or phone
messages and will hopefully reduce the volume of consumer data being sent to CMCs which raise false hope of compensation.
At the time of writing, the ICO is also considering issuing penalties to three other companies believed to be acting in breach of the
regulations.
With the ICO working closely with the Ministry of Justice (MoJ) to monitor CMCs, news earlier this year that CMCs are set to face tougher rules and regulations following a consultation by the Claims Management Regulator (CMR) will be viewed positively.
The three main amendments to the rules proposed by the consultation will include:
1. CMCs will only be allowed to agree contracts in writing with their clients before any fees can be taken.
2. CMCs will be required to inform their clients of any suspension or variation to the business’s authorisation once in effect.
3. CMCs will only be allowed to refer to their regulatory status as being regulated by the CMR rather than by the MoJ, which could be misconstrued as MoJ endorsement.
The CMR is fully aware that consumers, in some cases, are being left out of pocket when using a CMC to make a PPI refund claim.
As the tide of alleged PPI-related complaints start to reduce, dealers are reminded to ensure they continue to handle them effectively and in line with current legislation, and to familiarise themselves with the Data Protection and Privacy and Electronic Communications Regulations to ensure full compliance at all times.
Karen Wagstaffe is head of compliance and training at Finance Cover & Training Limited
