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UK Directors to be personally liable for nuisance calls
Amendment aims to stop those responsible from “ducking” ICO fines by liquidating their companies.
On 23 October 2016, the UK Department for Culture, Media and Sport announced that it will amend the Privacy and Electronic Communications (EC Directive) Regulations 2003 (e-PrivacyRegs) with effect from spring 2017 to introduce personal liability for directors for nuisance call fines.
This amendment will allow the Information Commissioner’s Office (ICO), the UK’s data protection and privacy regulator, to issue fines of up to £500,000 to each company director for nuisance calls. If a company has multiple directors, then each could be liable for a fine.
The amendment is one of a number of provisions introduced by the UK government in its campaign against nuisance calls and work to better protect the personal data of individuals in the UK. Measures have included requiring companies to display their caller ID and working to provide call blocking devices to vulnerable members of society.
According to the ICO, it has issued more than £2.7 million in penalties for nuisance calls since April 2015. However, £2.26 million of those penalties remain unpaid. Many limited liability companies try to avoid the fines by dissolving the business and re-emerging under a new name. The Information Commissioner, Elizabeth Denham, states that this amendment “will stop them ducking away from fines by putting their company into liquidation” and “will stop them leaving by the back door as the regulator comes through the front door“. It reinforces the ICO’s message that complying with the law relating to information handling is a boardroom matter.
It is believed that the ICO will consider the level of fine based on evidence and whether it should apply to a company, director, or both.
During September 2016, the ICO issued fines for serious contravention of the e-Privacy Regs as below: (Details of those fines can be found here.)
- A finance company was fined £130,000 after it sent a total of 7.7 million text messages over 6 months, with 4.5 million of these successfully transmitted. More than 1,900 complaints were received by the ICO about these spam texts. The ICO also issued the company with an enforcement notice ordering it to stop sending spam texts.
- A car finance brokerage company was fined £30,000 after 912 complaints were made in relation to its 4 month marketing campaign involving 65,000 unsolicited direct marketing text messages.
- A debt management company was fined £40,000 after 142 complaints were made to the 7726 “Spam mail” service about the receipt of unsolicited direct marketing text messages sent by the company.
- A marketing company was fined £60,000 for making 1.6 million nuisance calls to try to sell solar panels and green energy equipment.
The Information Commissioner also stated that the ICO is “quick to fine the companies responsible”, and we can expect this stance to continue when applying fines in future to directors.
For a helpful ICO guidance on the issues a business should consider when carrying out direct marketing, please see here.
Disclaimer: This article is produced for and on behalf of White & Black Limited, which is a limited liability company registered in England and Wales with registered number 06436665. It is authorised and regulated by the Solicitors Regulation Authority. The contents of this article should be viewed as opinion and general guidance, and should not be treated as legal advice.