Telemarketing sector ‘in meltdown’

The telemarketing industry is being hit by a new backlash – with many firms facing the threat of financial ruin – following a surge of complaints about unwanted marketing calls and a near stampede to sign up to the Telephone Preference Service.
According to the latest figures, complaints about unwanted marketing calls have trebled to almost 10,000 a month since the beginning of 2012 due largely to a huge surge in activity by PPI and accident claim firms.
Telecoms watchdog Ofcom said that in July alone 9,803 complaints about unsolicited marketing calls were registered with the TPS, compared with 3,212 complaints in December 2011.
Meanwhile, in the first six months of this year, 700,000 new consumers signed up to the TPS – compared to 800,000 for the whole of 2011. There are now 17.9 million people on the do-not-call database.
With an estimated 24 million households having a landline, if registrations continue at 1.5 million a year, the market for cold telemarketing sales will disappear within 6 years, putting many firms out of business.
An Ofcom spokeswoman said: “The problem [with such calls] is a growing issue and can be partly attributed to an increase in the aggressive marketing practices of PPI and accident claims firms.”
The number of people who have complained to the telecoms watchdog about silent or abandoned calls has also trebled to more than 3,000 a month since the beginning of the year.
Under Ofcom’s rules the number of abandoned calls companies make to consumers each day is not allowed to exceed 3% of the total live calls made on that day.
In April Ofcom fined home insurance and repairs firm HomeServe £750,000 for making excessive numbers of silent and abandoned calls.
At the time Claudio Pollock, Ofcom’s consumer director, said: “We hope the fine will send a strong message to all companies that use call centres that they need to ensure they are fully compliant with the rules or face the consequences.”
The Information Commissioner’s Office has already pledged to take tougher action, following the recent uproar caused by a BBC Panorama investigation which exposed some telemarketing firms’ blatant disregard for the TPS. At the time, the DMA called for tougher action from the Information Commissioner’s Office to protect legitimate businesses.
But the head of preference services John Mitchison claims both Ofcom and the ICO – which have the power to impose fines of up to £2m on lawbreakers – have made enforcement of the legislation a priority.

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