horwich farrelly

New Cold Calling Consent Laws Take Effect

September, 14, 2018

On 11 May we posted our comments on the Financial Guidance and Claims Act 2018, which had just received Royal Assent, and we expressed our concern that a total ban had not been imposed on ‘cold calling’, particularly in relation to personal injury claims. These continue to attract the highest number of complaints about nuisance calls. Instead the government opted to deal with the issue by imposing strict limitations on the circumstances in which such calls may be made. Anticipating the impact of this seemingly missed opportunity we had also raised concerns about whether the measure would be sufficient to stop the tea-time call from a claims management company enquiring about the whiplash claim you may or may not have had (see our posting of 8 March).

The new rules came into effect on 8 September and provide consumers with a choice of whether or not to ‘opt-in’ to receive these calls and, if they do not opt-in and are still contacted, the right to complain. A justified complaint will lead to sanctions being imposed on the cold-caller, with potential fines of up to £500,000. Policing is in the hands of the Information Commissioner (ICO).

Man using telephone

The process has something of a ‘horse-before-the cart’ feel about it, as the would-be caller is required to make the necessary checks to make sure they have the recipient’s consent before calling. Surely no consumer in their right mind will give such consent and how, in practice, can it be obtained, unless the consumer is actively seeking assistance with a claim?

There appear to be two main possibilities. First, those attempting to harvest claims will abandon the telephone altogether in favour of social media marketing and messenger bots. These will invite the potential claimant to register their interest with the relevant organisation, at which point the permission to make contact by telephone or email will be obtained. Secondly, less scrupulous organisations will continue to make unsolicited calls but will try to do so without falling into the hands of the ICO. This may be by setting up companies which operate illegally but only in short bursts before changing their name, or by operating from overseas. In either case the resources of the ICO may be stretched to identify and take enforcement action against the guilty parties.

Solicitors are caught by these rules both directly an indirectly. The Solicitors Regulatory Handbook, which governs the conduct of the profession, has been amended also to prohibit cold-calling for business. However, solicitors are also prohibited from entering into any financial arrangement with an introducer and/or intermediary who has obtained business by way of any type of cold-calling. In the past such arrangements have been of considerable importance to some claimant lawyers and the SRA has already shown that it will be monitoring firms closely to prevent these practices continuing.

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