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Marketing is crucial for businesses, and often, businesses make telephone calls to potential customers as part of their marketing strategies. However, the protection of individuals and their rights is fundamental under data protection and electronic marketing rules. As such, businesses must follow strict legal rules when making marketing calls. This article will explore whether businesses can cold call individuals and the key legal issues to consider when doing so.
What Are The Cold Calling Telephone Marketing Rules?
When we speak of ‘cold calling’, we refer to making unsolicited (unrequested) marketing calls to individuals. There are two sets of legal rules to consider when making unsolicited telephone marketing calls. As a business engaging in this activity, you will need to comply with both data protection and electronic communication laws.
General Data Protection Regulation Rules
The UK General Data Protection Regulation (UK GDPR) is the UK’s data protection law compliance regime, alongside the Data Protection Act 2018. The UK GDPR sets rules about processing personal data about living individuals.
There are several legal rules to follow under the GDPR. Telephone marketing activities will generally involve processing personal data, such as the name and telephone number of the proposed call recipient.
The lawful basis for processing personal data can be challenging to determine in practice. If you are unsure about this, you should seek legal advice.
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Privacy and Electronic Communications Regulations
As well as the UK GDPR, businesses also need to comply with the rules under the Privacy and Electronic Communications Regulations (PECR). The PECR regime sets out various rules about using electronic communications for direct marketing, including marketing telephone calls.
Direct marketing means the targeting of advertising to specific individuals. PECR applies strict rules around the use of various channels, such as emails, texts and phone calls for direct marketing.
Compliance with PECR is mandatory and critical. You must comply with the PECR rules if your business conducts telephone marketing calls. For example, this may include calls to individuals to promote your products or services.
PECR sets out rules for organisations marketing telephone calls, such as cold calling prospective customers. The most relevant rules for businesses are the rules around making live (not automated) telephone calls.
The following key rules apply when making marketing calls.
Rule 1
Your business can call any individuals or businesses who have specifically consented to receive marketing calls from you. For example, individuals who have ticked ‘opt-in’ boxes specifically agreeing to receive marketing calls from you.
Rule 2
Your business cannot call numbers registered with the Telephone Preference Service or Corporate Telephone Preference Service (unless the individual has expressly consented to receive marketing calls from you).
The Telephone Preference Service and Corporate Telephone Preference Services are services that allow individuals and businesses to opt out of receiving live marketing calls. Your business should screen all numbers you intend to call against these services before making calls to them. You cannot call an individual who has previously objected to your call.
When making marketing phone calls, you must state:
- your identity;
- your number (or an alternative contact number) should be displayed to the person receiving the call; and
- a contact address or freephone number should be provided if requested.
What Are the Consequences of Non-Compliance?
The legal rules around telephone marketing are complex and sometimes overlooked. However, understanding and complying with them is important.
The UK ICO (the data protection regulator) can apply various penalties for non-compliance. The penalties include heavy fines and prosecution of businesses in breach of the rules. Further, breaching the rules can lead to serious reputational damage and loss of confidence and trust from customers.
Fines for breaching the UK GDPR can be £17.5 million or 4% of total worldwide annual turnover, whichever is the higher. Breaching PECR is also extremely serious, with fines of up to £500,000.
The UK ICO has taken serious enforcement action against businesses who have breached the applicable legal rules when cold calling, including heavy fines. As such, businesses need to ensure that they understand these rules and comply with them when cold calling.
This factsheet sets out how your business can become GDPR compliant.
Key Takeaways
Whilst cold calling may be an effective marketing tool, businesses need to understand the applicable legal rules that apply to such activities. The implications of breaching the rules on cold calling are severe. Therefore, businesses must ensure they understand and comply with the rules under both the UK GDPR and PECR when running telephone marketing campaigns.
If you need legal advice on telephone marketing law rules, our experienced data, privacy, and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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