The Information Commissioner’s Office clampdown on so-called nuisance calls has been branded a flop after an investigation revealed that 14 out of 20 companies penalised have either gone bust or declared themselves insolvent to avoid the fine.
The ICO has made major strides in the battle against rogue firms, and recently revealed it had issued fines totalling more than £2m since the law was changed last April, compared with just £360,000 during the previous 12 months.
However, according to an investigation by The Telegraph, the vast majority of firms have avoided paying up by going under, with Reactiv Media the most recent firm to be placed into liquidation, by owner Tony Abbott.
Reactiv was fined by the ICO in 2014 after an investigation discovered the business had made unsolicited marketing calls to people registered on the Telephone Preference Service. The original fine of £50,000 was increased by £25,000 in 2015 following an unsuccessful appeal.
Companies House data shows that Reactiv owes a total of £2.4m, including £1m to HM Revenue & Customs, as well as the £75,000 ICO fine. Abbott set up a new company, called Flip It Marketing, last year.
Meanwhile Prodial – which the ICO branded “one of the worst cases of cold calling we have ever come across” – was fined a record £350,000 but declared itself bust way before the fine was ever issued.
The ICO’s enforcement team is currently working with the liquidators to recover the fine. However, the directors, who have no liabilities, are free to start up a new firm doing exactly the same thing.
One industry insider said: “We all thought that the new laws would help to clean up the sector – or at least send out a warning to the rogue firms – but now it appears to be failing badly; what is the point of issuing fines if firms can simply go bust to avoid them?”
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