*** Submission from David Hickson to OfcomWatch ***

There are some points to pick up from Amit’s posting on 9 May.

This is with reference to the Notification against MKD Holdings (Kitchens Direct) and the accompanying Explanatory Notes published on 3 May. (I love what appears to be a spelling mistake in the file name!)

Ofcom is perfectly correct in saying that it does not endorse the DMA Code of Practice and that it may have reason to “have to regard to” a relevant industry Code of Practice. It is of interest to note that Kitchens Direct is a kitchen company that does its own telemarketing. It is not a member of the DMA, nor of the specialist Direct Marketing industry served by that organisation.

The specific breach of an earlier undertaking identified in the Notification as being the only reason why it was issued is a somewhat technical matter relating only to the “drop rate” on specific telephone lines.

According to the details reported, MKD Holdings was found to be now remaining within the 5% limit for its campaign as a whole, as specified by the DMA Code, and was thereby fully compliant with that Code. The failure of compliance used to issue the Notification was an invention of Ofcom, derived from its own peculiar adaptation of the principles contained in the DMA code.

The Explanatory notes identify a requirement to “have regard to” the DMA Code, and quote extensively from the provisions of the relevant sections of the Communications Act 2003. They do note however quote from Section 131 of the Act, which gives formal legal status to Ofcom’s Statement of Policy in relation to the powers. The portion of greatest relevance, which is not quoted, is section 131 (4):

“It shall be the duty of OFCOM, in exercising the powers conferred on them by sections 128 to 130, to have regard to the statement for the time being in force under this section.”

Here we see what it is that Ofcom is actually required by law “to have regard to”.

This Statement of Policy confirms that the making of Silent Calls is potentially “persistent misuse” and any determination will be based on the scale of the activity itself and the degree of consumer detriment likely to be caused. There is no reference whatsoever to any other activity by the offender requiring consideration nor being of any relevance when a determination of “persistent misuse” and the action to be taken is being made.

The nature of what may be found to be “persistent misuse” is not said to be altered by them perhaps recycling their waste paper, providing work in an area of high unemployment, sponsoring the local football team or making 19 times as many completed calls as they make silent calls.

The Statement of Policy even addresses this point directly as follows:

“Because the ‘persistent misuse’ powers are framed with a view to the protection of individual consumers, it would be inappropriate to apply a ‘percentage’ approach. ? From the standpoint of an individual who has received such a call, there is little comfort to be drawn from the knowledge that other people did not.”

Whilst the Statement is only a statement of general policy and cannot bind Ofcom absolutely in exercising its discretionary powers, neither can the DMA Code of Practice. It is hard to see how Ofcom’s duty under section 131 (4) of the Act can have been discharged when such a clear general principle has been disregarded so blatantly.

The limit of 3% in the US does not relate to Silent Calls, which are not allowed, but to “dropped calls” which must be covered by the transmission if a (non-marketing) recorded message. The Privacy and Electronic Communications (EC Directive) Regulations 2003 is often given as a reason why UK law conversely requires us to suffer Silent Calls rather than recorded messages when calls are “dropped”.

The offence covered by regulation 19 of the PECR is “the transmission of communications comprising recorded matter for direct marketing purposes”.

The significant point is that the purpose applies to the transmission of the material not, as is often suggested, the intention of the person when starting to make the call. Transmitting a purely informative recorded message which could not fulfil any direct marketing purpose, when an intended direct marketing call could not be completed because insufficient operators were available, could not be an offence under the terms of this regulation.

A pattern of such calls could however be deemed by Ofcom to be “persistent misuse” if it were determined that they caused unnecessary annoyance, inconvenience or anxiety. There can be little question that the likely consumer detriment caused would be judged to be less than that of the Silent Call, notably by excluding the factor of anxiety.

We wait to see how the application and understanding of Ofcom’s policy in this area will develop.

David Hickson