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The government recently laid draft amendments to the Privacy and Electronic Regulations (PECR) meaning that directors can be fined up to £500,000 for breach of the rules on the use of automated calling systems and unsolicited direct marketing. The amendments will come into force on 17 December 2018.
Directors will be liable where they have consented to, or, planned the breach, or the breach was caused by their negligence. Breaches of the regulations can include unsolicited direct marketing calls to an individual who has notified the organisation that they do not wish to receive calls, or the individual’s telephone number is listed on the Telephone Preference Service.
Since April 2005 the ICO has had the ability to fine companies up to £500,000 for breach of the rules relating to unsolicited direct marketing and has so far issued more than £4.8 million in penalties, with directors being at risk of disqualification if they are found to be in breach of the rules. However, companies have found ways to circumvent such fines by dissolving and then re-incorporating under a new name, known as phoenixing. Therefore the new rules are intended to remove this option by lifting the veil of incorporation and personally targeting directors.
The introduction of personal liability for company officers is one of several measures designed to tackle the problem of nuisance marketing calls. Others include the introduction of a statutory code on direct marketing and requiring direct marketers to display phone numbers when making automated or live marketing calls.
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