Last week, the First-Tier Tribunal issued its decision in an appeal by ColourCoat Limited (“CCL”) against a Monetary Penalty Notice (“MPN”) issued by the Information Commissioner in respect of contraventions of the Privacy and Electronic Communications (EC Directive) Regulations 2003 (“PECR”).

Since 2016, CCL has been installing, as a subcontractor, hydrophobic thermal coatings to combat damp and heat loss in residential properties. In 2019, CCL decided that it would start marketing directly to potential customers and bought lists of names and phone numbers for this purpose.

When calls from CCL were answered, the call operator introduced themselves as being from “Homes Advice Bureau”; the script that they followed had the call operators inform the recipient that they were following up on a Government initiative about loft or cavity wall insulation. The call recipient was informed that they qualified for a free “heat loss and moisture check” which would be carried out by “EcoSolve UK”. If the recipient expressed interest, CCL would thereafter inspect the property and attempt to sell installation services. By the end of October 2019, CCL’s turnover had increased seven-fold.

In February 2020, the Information Commissioner noted that their office had received a number of complaints about unsolicited direct marketing calls from a company calling themselves “Homes Advice Bureau”. CCL was identified by the Commissioner, using statutory powers, as the source of these calls. The Commissioner discovered that CCL had made almost 970,000 calls for the purpose of direct marketing between August 2019 and March 2020. Of these calls over 450,000 were made to numbers registered with either the Telephone Preference Service (TPS) or Corporate Telephone Preference Service (CTPS) and had been so registered for more than 28 days.

The Commissioner issued a Notice of Intent and a Preliminary Enforcement Notice in February 2021. After CCL had made representations through its solicitors, the Commissioner served a MPN (in the sum of £130,000) and Enforcement Notice on CCL on 16 June 2021. The Commissioner had found CCL in breach of Regulations 21(1)(a), 21(1)(b), 21(A1) and 24(1)(b) of PECR.

CCL did not dispute that it had breached Regs 21(1)(a) and (b); however, it did dispute the breaches of Regs 21(A1) and 24(1)(b) of PECR; it also appealed the amount of the MPN. However, the FTT held that CCL was in contravention of Regs 21(A1) and 24(1)(b).

In relation to Reg 21(A1), the FTT held that CCL had used mobile numbers from which it could not be identified and that at least one of the numbers used was registered to a pseudonym (“John Smith”).

In relation to Reg 24(1)(b) the FTT found that CCL had failed to provide call recipeints with its name. The FTT said, at para 36, that “[w]hile a company can trade under a trading name, PECR requires anyone making unsolicited direct marketing calls to provide their name – in this case, the registered company name.” The FTT noted that the Commissioner had experienced difficulty in identifying CCL as the source of the call and had only been able to do so by making us of their statutory powers; something that would have been “impossible for the call recipients” [para 36].

CCL had sought to argue that its contravention of Reg 21(1)(a) had been negligent; however, the FTT held that it was deliberate. Names would only go on CCL’s “Do Not Call” list if an individual was particularly forceful or insistent. CCL’s sole director confirmed in oral evidence to the FTT that a call recipient who had told CCL to “go away” would be called again in case they were just in a bad mood or in a rush. [para 39]

In relation to the contravention of Reg 21(1)(b), the FTT held that that was negligent. At paragraph 41 of its decision it states that CCL “knew or ought to have known that there was a risk that calls would be made to” TPS and CTPS registered numbers. The data list invoices received by CCL contained references to TPS and GDPR so although the company lacked actual knowledge of these matters, CCL “could have easily researched the relevant rules and put screening software in place.” [para 41].

In relation to the amount of the MPN, the FTT held, at para 44, “that the Commissioner had taken a careful, detailed and reasonable approach to determining the amount of the penalty” and that it had done so in line with the principles that penalties should be effective, proportionate and dissuasive and whether a fair balance has been struct between means and ends. Furthermore, the decision was in line with the Commissioner’s Regulatory Action Policy and published guidance.

The FTT noted that CCL “had targeted older, and potentially more vulnerable, people and by using a “neutral” trading name and referring to a Government initiative, created the false impression that [CCL] was providing an official or Government authorised service.” [para 48] The FTT also held that during the period of the contraventions that CCL’s turnover had been high and that a “substantial proportion” was likely to have been derived from the marketing campaign. [para 50]

The appeal was dismissed.

The FTT makes some interesting comments in its decision in this appeal that ought to be kept in mind by people undertaking direct marketing and those advising them on the lawfulness and/or privacy aspects of direct marketing. If you’re using a trading name and it is not immediately obvious from that trading name who the actual caller (or instigator, if different) is then that is information that requires to be provided as part of the call.

The FTT also noted what was said by the Upper Tribunal in the Leave.EU appeals that comparisons with other penalties issued by the commissioner is not helpful in assessing whether another penalty is appropriate. While there are principles that underpin how the Commissioner (and FTT) will assess what is an appropriate level of penalty, what that is will vary depending on the facts of each case (although being wildly out of step from other penalties may be an indication that something has gone wrong, but consideration would also need to be given to what material differences exist between each case).