Privacy and Electronic Communications (Amendment) (No. 2) Regulations 2018 — House of Lords, 2018-11-28
Topic: Domestic Commerce
Michael Bates (Conservative, Centre-right): I thank noble Lords for their questions. I will try to address the points that were raised. The noble Baronesses, Lady Drake and Lady Bowles, asked why we have not considered banning all cold calls. Pensions cold calling is a special case where levels of consumer detriment are particularly high. The Government are determined to tackle the scourge of nuisance calls, but a balance needs to be struck between ensuring that consumers are adequately protected and providing the right conditions for the legitimate direct marketing industry to operate. Government efforts are focused on taking action against companies that deliberately break the rules, not on penalising legitimate businesses that comply with the law The noble Baroness, Lady Bowles, made a specific point about extending this to cover all investments. The wording used— "direct marketing in relation to … pension schemes"— is broadly defined in the SI to capture the marketing of any investment product, not only conventional pension products, to be acquired using pension funds. However, it does not cover marketing in relation to funds held in other products that may serve to provide retirement benefits, such as a lifetime ISA, as this would go beyond the powers currently in the enabling Act. However I accept her point that our approach should be continued vigilance rather than claiming that it could never be changed in future The noble Baroness, Lady Drake, asked about the definition of "reasonably envisage". It is drafted to set up an objective rather than subjective standard. It would be determined on a case-by-case basis. Consideration would be given to the nature of the firm with which there is a relationship. Is it the kind of firm that could provide pension services, for instance? She asked whether the exemption gives a preferential market position to those with an existing relationship. It enables consumers to hear from the existing provider and enables them to make informed decisions about their pensions It was suggested that the ban would be ineffective because it does not cover calls from overseas. The Information Commissioner’s Office has arrangements with international—including non-European—regulators to enable enforcement action where companies operating abroad make calls to the UK which would appear to be unlawful if made in the UK. Companies based in the UK which contract or instruct companies based abroad to make calls into the UK must comply with data protection legislation. In fact, this is a good moment to note that the PECR and this SI sit alongside the Data Protection Act 2018 and the GDPR in this respect The noble Baronesses, Lady Drake and Lady Bowles, raised a very fair point about potential inertia by people ticking boxes. We have all inadvertently done that or not done that, as the case may be. The GDPR provides a very high threshold for consent. Consumers cannot provide consent through a pre-ticked box. Consent must be actively given under the GDPR The noble Baroness, Lady Bowles, asked why the FCA is not prohibiting the use of personal data collected by third parties through cold calling. Organisations are already required to process or handle personal data in accordance with the Data Protection Act—a point which I have already made. The Data Protection Act 2018 and the GDPR include significantly stronger sanctions for breaches than the legislation they replaced. Processing data in contravention of data protection principles could attract fines of up to approximately £17 million, or 4% of the company’s global annual turnover, whichever is higher I do not know whether I have reached the threshold set by the noble Lord, Lord Tunnicliffe, for adequately responding to the questions. If I have not, I will be happy to write, but on the basis of what I have said I commend the regulations.