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Company Receives Record Fine from UK Regulator For Cold Calling

The UK’s data protection regulator, the Information Commissioner’s Office (“ICO”), has imposed a fine of £350,000 on Prodial Ltd (“Prodial”) for making over 46 million unsolicited automated telephone calls to generate leads in relation to payment protection insurance refunds.  This is the highest fine issued by the ICO to date.

The ICO investigated the marketing activities of Prodial after receiving over 1,100 complaints in the space of seven months.  Prodial was found to have breached the UK’s Privacy and Electronic Communications (EC Directive) Regulations 2003, as amended (“PECR”), by making automated marketing calls — i.e., calls made by an automated dialling system that plays a recorded message — to people without their consent.

The ICO has the authority, under section 55(1) of the Data Protection Act 1998, to issue fines of up to £500,000 for serious contraventions of PECR.  The conditions are: (a) there has been a “serious contravention” of PECR; (b) the contravention is likely to cause “substantial damage or substantial distress”; and (c) the contravention was deliberate, or the person knew or ought to have known that there was a risk the contravention would occur and that it would cause substantial damage or substantial distress but failed to take reasonable steps to prevent it.

The ICO justified its record-breaking fine in this case on the basis that:

  • The contravention of PECR was clearly serious given the sheer number of automated marketing calls made within a short time period and the number of complaints received by the ICO.  Prodial made repeat calls to people, sometimes even during the same day, and failed at times to allow the recipients of the calls to speak to a person or to opt-out from subsequent calls. In addition, Prodial was not identified as the instigator of the calls, making it hard for people to report the company to the ICO.

  • Prodial deliberately engaged in a marketing campaign on a massive scale, even if it did not deliberately intend to cause distress.  According to the ICO’s press release, the company was aware that it was acting in breach of the law, as once the ICO become involved, the company was placed into voluntary liquidation by one of its directors.

  • The monetary penalty in the case was appropriate to encourage compliance with PECR and to “send a clear message to other firms that this type of law-breaking will not pay.”  The ICO also considered the fact that Prodial obtained a commercial advantage from its breach of the law by selling the personal data collected during the calls to claims management companies and hence potentially producing a turnover of almost £1 million from the marketing campaign.

The ICO’s decision in this case is consistent with the regulator’s recent trend for taking a strict stance against deliberate and clear violations of the law and for going after the worst offenders.  Only last October the ICO imposed a hefty fine of £200,000 on a company making automated marketing calls in breach of the UK regulations, as we reported here.  The ICO has also recently handed a stop order on a company co-ordinating millions of unsolicited automated calls, requiring the company to stop or face legal action, and warning other nuisance callers that “there’s nowhere to hide” (see ICO news report here).

© 2022 Covington & Burling LLPNational Law Review, Volume VI, Number 61
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About this Author

Mark Young, Data privacy and cybersecurity lawyer, Covington
Partner

Mark Young advises clients on data protection, cybersecurity and intellectual property matters. He has particular expertise in regulatory compliance and legislative advocacy, cyber and data security incident preparation and management, and online IP enforcement.

According to the latest edition of Chambers UK (2018), he has "a really sharp analytical mind and good understanding of key regulations." In previous editions, he has been recognized as "a trusted adviser - practical, results-oriented and an expert in the field," and "enjoying a growing reputation...

+442070672101
Helena Milner-Smith, Covington, Employment lawyer
Special Counsel

Helena Milner-Smith helps companies navigate complex international HR-legal compliance issues.

Ms. Milner-Smith advises clients across a range of industries on all aspects of UK and international employment law, including the HR aspects of privacy compliance and human rights regulation.

Ms. Milner-Smith has particular expertise advising on the HR-legal aspects of multi-jurisdictional transactions. She also regularly assists clients seeking to protect their business and increase international compliance by designing and implementing global policies,...

+44.20.7067.2070
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