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Speech to Telephone Preference Service Forum

Earl’s Court - 24th February 2005.

The issue of direct marketing calls from companies, particularly those that result in a silent call, is something that I have raised in the House of Commons on a number of occasions. In fact I first had an adjournment debate on the subject on 26th April 2002. More recently in November last year I introduced a bill to create an offence in respect of corporate nuisance telephone calls. The publicity surrounding the bill, which unfortunately ran out of Parliamentary time, resulted in the biggest response on any issue, including the war on Iraq, that I have had since being elected in 2001.

This issue was first brought to my attention by constituents who were annoyed and sometimes worried by these calls. When I first raised this issue in the House I was surprised by the extent of the problem. I received strong support from colleagues from all parties and was inundated by calls and letters from members of the public around the country. I also received letters and calls from people and organisations within the industry who were supportive of my stance.

I want to make it clear that unlike some, I have not called for unsolicited marketing calls to be made illegal. I accept that the industry is a legitimate and important one, but its methods are unacceptable and counter productive – even when the voluntary code of practice is adhered to. Let me explain why I say that.

I have a confession to make. When I was a small boy, me and my mates went through a brief period when we thought it was funny to knock on people’s front doors and run away. We even had a name for this game; we called it “knock out ginger”. I know from my parliamentary colleagues that the same game under different names is played across the UK.

It wasn’t funny really of course, just a bloody nuisance to those who had to answer the door to nothing but the sound of us scarpering around the corner – but small boys will be small boys and these days we’d probably be threatened with an ASBO and deserve it.

Now in those far off days, other people knocked at front doors in our area of South Wales. They still do. Legitimate door to door salesmen. The early equivalent of today’s telemarketing industry.

Imagine if they had been sent out with this instruction. Go down the street, knock all the doors quickly and go in the first one that answers – never mind if someone comes to the door and you’re not there.

That’s what today’s telemarketing industry does – it sets out deliberately, for its own convenience, to make millions of telephone calls every year which it knows will result in a game of telephonic “knock out ginger”. What industry or business in its right mind would set out deliberately to antagonise, irritate and alienate its potential customers to such an extent that over 100,000 of them per month complain and millions of them register to have no further contact from that industry.

It is insane – self destructive behaviour and it is killing your own industry.

The volume of silent calls is unacceptable. According to last year’s CM Insight’s report “Death of the Cold Call” BT receives over 112,000 queries every month from customers worried about silent calls. These calls cause many problems for those receiving them. The elderly can be intimidated and often believe that they are receiving malicious calls. Those that find it difficult to get to the phone are also seriously inconvenienced by corporate nuisance calls.

But it is not only the vulnerable that are worried by these calls. A journalist who I spoke to recently said that she had previously been a victim of genuinely malicious stalking calls. More recently she had received silent calls generated by predictive diallers, a frightening experience for her that was a reminder of her previous difficulties. Even those who are aware of why they are receiving these calls are inconvenienced and irritated by them.

Let me tell you as a politician it is often difficult to get the public engaged (if you excuse the pun) with an issue. Not this one. When I recently did an interview on this for BBC Wales Today I was congratulated on take up the issue by the taxi driver on the way to the studio (not unusual perhaps for a cabbie to proffer an opinion to a passenger – let alone one who is an MP) the security guard on reception, the make up artist, the producer, the cameramen and then the presenter who said her elderly mother was plagued by silent calls and did I have the TPS number.

This irritation has driven over 7 million customers in to joining the Telephone Preference Service – 400,000 every month. According to a NOP poll for the DMA 37% of people registering with the TPS do so to stop silent calls. This excludes them from all outbound calls even if their only intention was to stop the silent calls.

The DMA Code of Conduct provides guidelines for members, and I welcome the recognition of the problem in the DMA’s action plan, but this is an utterly ineffective tool in trying to eradicate the nuisance of silent calls by telemarketers. The level of silent calls generated by a company that is tolerated by the DMA code of conduct is unacceptable. Even allowing 5% of all live calls to be silent calls in a 24 hour period can lead to a huge number of silent calls. The Ofcom investigation into MKD Holdings, working on behalf of Kitchen’s Direct, showed that they made 24 million calls in a 4 month period, 11 million of which were answered, 1.5 million of which resulted in silent calls. But even if they had complied with the DMA guidelines they would still have been able to generate 549,999 silent calls. That’s one company, in one 4 month period, complying with the industry guidelines. Is it any wonder that people are falling over themselves to register with TPS?

Although I support the effort that the DMA is demonstrating, there is no way of enforcing even the inadequate code of conduct. These are only guidelines; it is a voluntary system; and no real action is taken against offending companies. I am aware of the need to make outbound calls, the pressure of competition (including overseas), and the economic value of the industry, but UK telemarketers need to recognise that they are seriously damaging their industry and its potential customer base. If you annoy customers they are highly unlikely to use the services provided by companies. The apparent complacency of the industry and the lack of willingness to act is only harming telemarketing as a whole. In a way it is a classic case of individual companies apparently acting in their own self interest by maximising the efficiency of their telemarketing operation, but in doing so, undermining the collective interest of the industry and therefore the individual interest of each company within that industry. Like the famous prisoners dilemma there is a telemarketers dilemma – act responsibly and risk short term profits, act irresponsibly for short term gain but risk long term oblivion.

All this is why we need stronger regulation – in the industry’s own interest – as well as the consumers. Ofcom seems unwilling to use the powers that it has been given under the Communications Act. Its leadership on the issue has been pitiful. I recently met with representatives of BT who were asking me to put pressure on Ofcom to take firmer action (as indeed does the DMA action plan). How often does a major multinational corporation and an industry body beg a regulator to tighten its grip – it shows how weak Ofcom has been.

At present Ofcom will not take action against a company unless this has been instigated by an individual or an outside agency. In the MKD case the investigation and resulting mildest of action was only taken up by Ofcom as a result of complaints made by a member of the public. Although Ofcom can fine companies up to £5,000 for misuse of the telecommunications network they have never used this power even in the case of MKD Holdings. Ofcom also has the ability to revoke licences, but again this has not been used in the legislation’s 6 year history.

The reason there are not more cases is because most members of the public are not interested in pursuing a case. They just want to stop the silent calls. So when they phone BT to complain what are they told? Register with TPS. Or if they go to BT’s website what does it say in big letters? “Even one nuisance or malicious call is one too many “. BT may believe that but the code of conduct says millions are not too many. It then goes on to say the solution is to register with TPS.

The current enforcement has been ineffective in offering a solution, what is required is a new and stronger partnership between the industry and regulator.

The powers that are currently held by Ofcom need to be used more effectively in order to deter companies from flaunting the current legislation. A company will know that the vast majority of customers will not pursue action against them and as the regulation stands this is an incentive for them to maximise their calling potential. The DMA should not be recommending 5% as the acceptable rate of silent calls. They shouldn’t even be recommending between 2 and 3% as in the action plan. My contention is that the industry should calibrate its predictive dialling equipment to attempt to achieve a silent call rate of zero. That is a tough target, perhaps even an unattainable one in practice. But while the industry continues to believe it is acceptable to deliberately irritate its potential customers as a matter of policy – it will find itself fishing in a pool that is rapidly evaporating.

In addition when a silent call is made customers must be able to identify who has called. Caller Line Identification should be used on all outbound calls. I know this is supported by the DMA, but European legislation is interpreted to mean that you can’t force someone to use CLI. Ofcom must look closely at this because it is a ludicrous provision in the context of a commercial call. If necessary we should legislate to make it compulsory. On its own this would contribute greatly to improving the situation.

In addition the industry in partnership with Ofcom and telephone companies could set up its own complaints body, so that complaining customers are not simply told to register with TPS. Their complaint could be looked into quickly, compensation paid if appropriate, and league tables of the worst offending companies published with sanctions for real offenders.

Without a quick and effective way to complain – potential customers will simply opt out – and that is what more than 7 million have already done.

I said at the outset that I have not called for a ban on unsolicited calls; or even for an opt-in system as in some other European countries. But there are plenty of others who will do so unless the industry stops knocking on people’s doors and running away.