Tribunal increases ICO fine over unsolicited marketing by 50%

Out-Law News | 17 Apr 2015 | 8:39 am | 2 min. read

A UK court has increased the level of fine imposed on a business which made unsolicited marketing calls to people signed up to the Telephone Preference Service (TPS) by 50%.

The First-tier Information Rights Tribunal said that "aggravating factors" justified its decision to impose a £75,000 monetary penalty on Reactiv Media over its breach of the Privacy and Electronic Communications Regulations (PECR) instead of the £50,000 fine that had been initially served on it by the Information Commissioner's Office (ICO).

The Tribunal, in rejecting Reactiv Media's attempts to overturn the ICO's penalty or reduce its value, said that it been "entirely appropriate" for the ICO to serve a fine on the company but that the level of fine was "lenient".

The Tribunal said (12-page / 62KB PDF) that Reactiv Media's "lack of co-operation" with the ICO had hampered the watchdog's assessment of its "financial robustness" and meant the ICO "took a cautious view as to the financial resources of the company and discerning some mitigating factors imposed a lower sanction of £50,000". It said it had evidence which was not available to the ICO at the time its sanction was imposed which merited a more substantial fine being served.

"The evidence before the Tribunal shows a culture of denial and minimisation of the breach, weak governance of the company and a tendency to blame others rather than accept responsibility," the Tribunal said. "There is little evidence of robust policies and procedures coupled with a culture which properly respects telephone subscribers and their right to privacy."

The Tribunal said that Reactiv Media continues to fail to engage effectively with "the regulatory process" and "clearly sought to mislead the press and minimise the issues raised" when the ICO's monetary penalty notice was announced.

"The Tribunal can have little confidence that appropriate lessons have been learned," it said. "In the circumstances therefore of a larger, more prosperous company and clearer evidence of aggravating factors the Tribunal is satisfied that the penalty of £50,000 is too low and a sum of £75,000 more appropriately meets the objectives of the notice."

Under PECR, the ICO can fine businesses and other organisations up to £500,000 for serious breaches of the rules, which include in relation to the sending of unwanted marketing emails and texts or live and automated marketing phone calls to individuals.

The rules generally prohibit organisations from transmitting or instigating the transmission of unsolicited communications to consumers for the purposes of direct marketing by means of electronic mail unless the person receiving the mail has notified prior consent for the messages to be sent. The marketing companies also must not disguise or conceal their identity in the messages or use invalid addresses where recipients of the messages would send responses to ask for the messages to stop being sent.

Companies can send direct marketing via electronic mail to consumers if they have "obtained the contact details of the recipient of that electronic mail in the course of the sale or negotiations for the sale of a product or service to that recipient", where the marketing is for "similar products and services only" and providing the recipient has a "simple means" to refuse the use of their contact details for that marketing "at the time of each subsequent communication."

Recipients must not be charged when opting out other than what it costs them for the "transmission" of their refusal, according to the regulations.

The Tribunal considered Reactiv Media's appeal in accordance with a previous threshold that the ICO used to have to prove had been surpassed to be permitted to impose fines under PECR.

To be justified in serving a fine, the ICO previously had to show that the sending of unsolicited direct marketing communications was a serious breach of PECR and "of a kind likely to cause substantial damage or substantial distress". The need to show 'substantial damage or substantial distress' was removed following a change to the law earlier this month. The ICO has suggested that it will issue more fines as a result of the changes in a bid to deter unsolicited marketing activities.