The UK Information Commissioner’s Officer (“ICO”) has issued its largest fine to date in connection with using an automated calling system to make direct marketing calls. The ICO found that Home Energy & Lifestyle Management Ltd (“HELM”), a green energy company that made millions of automated marketing calls in relation to “free” solar panels, recklessly contravened UK regulations, and fined the company £200,000.
UK rules on making automated calls are quite strict. An organization is permitted to make a live unsolicited marketing call so long as it screens numbers against the Telephone Preference Service (“TPS”) register; an organization can only call someone listed on the TPS if that person has notified the organization that they do not object to its calls. However, an organization is only permitted to make an automated call — i.e., a call made by an automated dialing system that plays a record message — if the person has specifically consented to receiving automated calls from that organization. (See Regulation 19 of the Privacy and Electronic Communications (EC Directive) Regulations 2003, as amended (“PECR”), and the ICO’s guidance on Direct Marketing.)
The ICO has the authority, under section 55(1) of the Data Protection Act 1998, to issue fines (of up to £500,000) for serious contraventions of PECR. The conditions are: (a) there has been a “serious contravention” of PECR; (b) the contravention is likely to cause “substantial damage or substantial distress”; and (c) the contravention was deliberate, or the person knew or ought to have known that there was a risk the contravention would occur and that it would cause substantial damage or substantial distress but failed to take reasonable steps to prevent it.
In this case, the ICO found that each of the conditions was satisfied:
- The contravention was “serious” given the volume and misleading nature of the calls. HELM made over six million recorded direct marketing calls to people without their prior consent. This included repeat calls to the same person, sometimes on the same day, even when they had selected an option to be removed from the list. The ICO also found that the calls were misleading because the solar panels were not necessarily free, as implied by the recorded message. To make matters worse, HELM admitted during the investigation that it did not appreciate that a different PECR regulation applied to the sending or instigating of automated marketing calls compared to live calls.
- The contravention was likely to cause substantial damage or substantial distress taking into account the number and nature of complaints that the ICO received. 242 people complained in a three month period. The ICO cited several examples of the complaints received, including, “Waiting for phone call about terminally ill family member so I cannot ignore my phone but I feel this nuisance company have taken over my phone line! Please can something be done to stop these pests?”. The ICO found that even if the distress likely to have been suffered by each affected individual was less than substantial, the cumulative impact would clearly pass the threshold of “substantial”.
- Regarding the last leg of the test, the ICO quickly concluded that HELM did deliberately contravene Regulation 19 of PECR.
Regarding the assessment of the fine, it seems that it would have been higher had HELM not co-operated fully with the ICO’s investigation and confirmed that it would not run a similar marketing campaign in the future.
The ICO severely criticized HELM’s ignorance of the law (describing the situation as “beyond belief”), and has warned that this “should be a warning to other companies to think before they launch into a campaign”.