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2.44 pm

The Minister for E-Commerce and Competitiveness (Mr. Douglas Alexander): I congratulate my hon. Friend the Member for Cardiff, West (Kevin Brennan) on securing this debate. As he said, the motivation was his concern for his constituents, which is widely recognised across the House. I am fully aware that the subject of the debate can, as we have heard, rouse strong feelings and generates much interest, not least from individual constituents. I shall seek first to put the issues into context.

Used responsibly, telephone marketing is a useful and valuable tool for businesses; used badly, it can be the cause of serious nuisance and inconvenience. It is therefore important that the right protections are put in place. I shall outline what the current rules say about unsolicited direct marketing by phone, and the individual subscriber's right to opt out, and then move on to what people can do if they are getting those unwanted calls.

The current rules originate from the EU telecoms data protection and privacy directive. Under the UK implementing regulations, we introduced statutory opt-out rights for individual phone subscribers who do not want to receive unsolicited direct marketing calls. They can register with the telephone preference service, or TPS, which is run by the Direct Marketing Association under supervision by the telecoms regulator Oftel. Registration is fairly straightforward: a telephone subscriber can do it by phone, fax, post or e-mail, and it is free.

The regulations also give individual subscribers the right to opt out of calls from particular direct marketers. No one may make an unsolicited direct marketing call to someone who has previously instructed them not to ring again. People may object to calls from a particular marketer without wanting to opt out on a blanket basis, and the rules accommodate that option for the individual telephone subscriber. Of course, that raises the question what are the sanctions for breaches of the regulations.

The Information Commissioner has powers to enforce the rules and will take action against direct marketers who persist in breaching the rules despite being warned of

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their obligations. Ultimately, failure to comply with an enforcement notice issued by the commissioner is a criminal offence punishable by a fine. Alongside those provisions for the individual telephone subscriber stands the position for corporate subscribers. No one should suffer in silence if they are being called despite having registered with the TPS or opting out of calls from particular marketers. Anyone who finds that they are being called despite opting out should complain to the TPS, if they are registered, or to the commissioner's office.

The TPS does not apply to corporate subscribers, however. The Government took that decision following extensive consultation before the new regulations were introduced. Many businesses both sell and buy products and services over the telephone. However, although corporate subscribers do not have a blanket opt-out right, as with the TPS, they do have the right to instruct individual callers not to make further calls to them. That right comes from the Telecommunications Act 1984 licensing regime, which requires anyone making that kind of call to cease doing so on receipt of a written request. Those rules are enforced by Oftel.

Yet it remains the case that those rights are enforceable only where the source of direct marketing calls can be traced and people know who is behind a rogue call. Consequently, as part of all direct marketing calls, the caller must give their name and, on request, a freephone telephone number on which they can be contacted. If callers withhold that information, telephone operators are able to trace the source of calls and disclose it to subscribers and/or the relevant enforcement body.

My hon. Friend identified the problem concerning the significant number of complaints received recently about the use of power diallers by direct marketers. These systems, also known in the industry as auto-diallers or predictive diallers, generate calls automatically but can cause silent calls if there are not enough operators available at the direct marketer's end to handle all the calls put through. When the call reaches its destination, if there is no operator available, a silent call results.

I stress that whatever phone system a direct marketer is using, he or she must still respect registration on the TPS or any direct request not to make any further calls. Direct marketers who fail to do so risk breaching the regulations and, therefore, enforcement action. When subscribers receive silent calls, their service provider should be able to trace their source. I understand, however, that marketers are now taking action themselves to sort out that problem. The DMA issued new guidelines in January which all responsible marketers will want to follow. These are to be incorporated into the DMA's code of practice, which is binding on its members.

My hon. Friend referred to individuals dialling 1471 to identify the person making the call. Among other things, the new guidelines require direct marketers to provide calling line identification when using that kind of calling system. The effect is that the source of any failed calls can be traced by dialling 1471. The marketer must ensure that anyone who rings back on the number thus provided is given clear information about the marketer's identity and how to stop any further calls. The guidelines will also strictly limit the number of failed calls that systems can make.

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The new guidelines result from an industrywide initiative and follow extensive consultation that involved, among others, representatives of telephone operators' nuisance call bureaux and of enforcement agencies including the Information Commissioner's office, Oftel and ICSTIS—the Independent Committee for the Supervision of Standards of Telephone Information Services—as well as my officials. Although I regret the delay in responding to his earlier letter, I assure my hon. Friend that the work has been continuing as I have described. I am sure that the new guidelines will be welcomed by hon. Members on both sides of the House as a significant step forward.

I agree that silent calls of any kind can be distressing. If silent calls are made with malicious intent, consumers should contact their telephone operator. Operators co-operate with police to trace any such calls, and such investigations can lead ultimately to prosecution and fines, or imprisonment for those found guilty of making malicious calls with intent.

The new regulations I mentioned are making a real difference as subscribers and marketers become more accustomed to the new system. Surveys carried out on behalf of the TPS show that 27 per cent. of the UK population is now aware of the service—an increase of 5 per cent. over last year. The number of direct marketers that check their lists with the TPS has also increased considerably. Some 1.8 million subscribers are now registered with the TPS. Despite rising registration numbers, the TPS reports that the number of complaints has remained steady, at approximately 300 a week, which indicates increased compliance.

My hon. Friend will be interested to hear that there is to be an opportunity to review how the regulations are working and whether improvements can be made when we implement the communications data protection directive, which is the updated version of the directive on which the current rules are based. The new directive is expected to be adopted later this year for implementation in 2003. Not least because of the degree of interest in these matters, we will run a consultation exercise before we implement the new rules, and I shall certainly welcome Members of Parliament and their constituents giving their views as part of that process.

Although real progress has been made, we now have a significant opportunity to take forward this important work. Our ongoing challenge is to ensure the appropriate balance between the use of responsible telephone marketing as a useful and valuable tool for business and appropriate protection from serious nuisance and inconvenience resulting from misuse.

Question put and agreed to.

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