The Government’s ban on insurance companies selling on the names of people who have had an accident – so called “claims farming” – is likely to be seen as a major victory in the fight against mobile phone spam.
The move follows a campaign spearheaded by former Home Secretary Jack Straw and a warning by the DMA that the rise in SMS spam – triggered mainly by firms offering compensation – threatened to damage legitimate mobile marketing.
The Association of British Insurers said it welcomed the ban. Director General Otto Thoresen said: “We are very pleased that the government has listened to the insurance industry’s campaign for a ban on referral fees. They add no value and encourage spurious and exaggerated personal injury claims.
“It is important that the ban must be watertight and apply across the board. Banning referral fees is an important first step in tackling our dysfunctional compensation system, and needs to be accompanied by a reduction in legal costs and action to tackle whiplash if honest customers are to benefit from these reforms.”
But while the ban will end one major source of SMS spam, it does not address the industry’s core concern of who should police the sector, especially in the face of a rise in debt firms using the medium.
The DMA recently held talks with representatives from Ofcom, the Ministry of Justice, Information Commissioner’s Office and Office of Fair Trading to address the issue of identifying who should lead the clampdown, following a survey which exposed widespread confusion.
Some 17% of those surveyed said they would complain to their network provider, 20% to Ofcom, 9% to the Office of Fair Trading, 4% to the Ministry of Justice, 3% to the Information Commissioner’s Office, and a massive 46% said they had no idea who to complain to.
At the time, DMA chief of operations Mike Lordan said: “If spam is allowed to continue unchecked, then consumers will naturally become hostile to all mobile marketing messages.
“It’s vital that the regulators now take action. We, the DMA, have already offered our expertise to work out a solution to the problem and help the regulatory bodies to step up and take the initiative.”
Related stories
Twin attack on mobile phone spam
About time too – god knows how they have got away with it for so long. What has the Information Commissioner been doing all this time? Rather typically..naff all!