Out-Law / Your Daily Need-To-Know

Director liability for nuisance calls introduced

Out-Law News | 17 Dec 2018 | 3:52 pm | 1 min. read

Company directors in the UK can now be fined up to £500,000 if their businesses engage in unsolicited marketing activity.

The new legislation, which came into force on Monday, extends existing powers of the Information Commissioner's Office (ICO) under the Privacy and Electronic Communications Regulations (PECR).

PECR prohibits companies from transmitting or instigating the transmission of unsolicited electronic communications to consumers for the purposes of direct marketing unless the person receiving those communications has given prior consent for the messages to be sent or the sender can demonstrate an existing commercial relationship with recipients.

Previously, the ICO was only able to impose fines of up to £500,000 on companies that breached the rules. However, the new rules, which had been laid before the UK's parliament in November, give the ICO the power to fine company directors up to £500,000 for breaches of PECR too.

Under the new regime, the ICO can fine the company, its directors, or both where it establishes a breach has occurred. The change will also allow the ICO to hold individual directors to account where the company fails to pay the fine or is placed into liquidation; and where the individual is no longer in a senior position, for example through resignation. The new rules operate alongside the Insolvency Service's director disqualification regime.

The UK's minister for digital, Margot James, said: "There is now no hiding place for the small minority of rogue directors who have previously tried to escape justice. We are determined to stamp this menace out and this new law is the latest in a series of measures to rid society of the plague of nuisance calls."

"Estimates by Ofcom show British consumers were bombarded with 3.9 billion nuisance phone calls and texts last year. Previously it was only the businesses themselves that were liable for fines of up to £500,000 rather than individuals. Some directors escaped paying by declaring bankruptcy only to open up again under a different name. Now the ICO can hold company directors directly responsible with further fines of up to half a million pounds," she said.

Andy Curry, head of the nuisance call enforcement team at the ICO, said the new rules will make it easier for the watchdog to "recover the fine" and "make it much harder for unscrupulous operators to set up in business again".

"This new legislation is the latest in a long line of measures designed to put an end to unwanted calls and texts," Curry said. "Complaints to the ICO and Ofcom about nuisance calls have fallen for the second year in a row suggesting the action taken is working."

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