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Privacy Commissioner Urges the Administration to Expand the Do-not-call Registers to Include Person-to-person Calls

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The Privacy Commissioner Urges the Administration to Expand the Do-not-call Registers to Include Person-to-person Calls

(5 August 2014) In a media briefing today, the Privacy Commissioner for Personal Data (“PCPD”), Mr Allan Chiang, urged the Administration to amend the Unsolicited Electronic Messages Ordinance, Cap 593 so as to expand the Do-not-call (“DNC”) registers to include person-to-person calls. The registers, administered by the Office of the Communications Authority (“OFCA”), provide for telephone subscribers to register their telephone numbers to ward off unsolicited commercial electronic messages which include at present fax messages, short messages and pre-recorded telephone messages, but exclude person-to-person calls.

The Consumer Council welcomes the efforts that the PCPD has directed to understand consumers’ opinion in person-to-person direct marketing calls, and opined that results of the survey will enhance better understanding and monitoring of the market trend providing useful information and data, and concrete analysis on the issue. These findings and analysis are valuable to the protection of consumer rights.

Survey on person-to-person direct marketing calls

The appeal to the Administration to expand the DNC registers was supported by the findings of a public opinion survey commissioned by the PCPD1 in March 2014 regarding person-to-person direct marketing calls (“P2P calls”). Compared with a similar survey conducted by OFCA in 20082, the 2014 survey revealed that there had been a growing preponderance of P2P calls, with more people responding negatively to the calls and fewer people reporting any gains from the calls.

Firstly, the proportion of respondents who had received P2P calls has increased from 84% to 91%. The frequency of these calls had also increased as the proportion of respondents receiving 6 or more calls per week has increased drastically from 8% to 23%.

Secondly, nearly half of the respondents in both 2008 and 2014 (49% in 2014) responded to the P2P calls by “indicating to the caller at the very beginning that they were not interested”. On the other hand, there has been a big drop (from 46% to 28%) in the proportion of respondents who would “listen first to see whether they were interested in the information and would discontinue the call if they were not interested”. In 2014, 21% of the respondents would discontinue the call immediately. The exact corresponding figure for 2008 is unknown, but is estimated to be at most 11%.

Thirdly, the proportion of respondents who reported that they derived benefits from the P2P calls has decreased from 13% to 6%. “Lower price or discounts” and “receiving more information” were the two most quoted benefits in both surveys. The proportion of respondents who had made commercial transactions during the calls also decreased significantly from 21% to 16%.

Fourthly, in both surveys, the overwhelming majority of respondents (81%) reported that P2P calls had caused inconvenience to them, primarily time wasting. In particular, the 2014 survey revealed that over 99% of these respondents3 considered that the calls had caused nuisance to them, and over 42% actually considered that the nuisance caused was “a lot”.

Protection against unsolicited direct marketing calls

Mr Chiang commented: “It is clear from our survey that P2P calls are highly ineffective in achieving sales and held in extremely low regard by the consumers at large. They successfully bring marginal benefits to a small group of consumers, only at the expense of the majority who are caused nuisance in the process.”

“To protect consumers against these nuisance calls, I have written to the Secretary for Commerce and Economic Development, drawing his attention to our survey findings and requesting that he considers the expansion of the existing DNC registers to include P2P calls. This proposed arrangement is the world norm as it has been adopted by similar DNC registers in operation overseas, such as the United Kingdom, Australia, Canada, New Zealand, France, the United States, and more recently, Singapore. It respects the consumers’ right to choose whether or not they would like to receive P2P calls.”

Direct marketing calls involving use of personal data

In the 2008 and 2014 surveys, there was a similar distribution in the reported proportion of P2P calls involving use of personal data. For example, in both surveys, 55% of respondents reported that more than 40% of P2P calls received by them involved the use of personal data. In particular, the 2014 survey revealed that over 62% of respondents who complained that the P2P calls had caused inconvenience to them indicated that more than 40% of the calls they received specifying their names came from companies of which they were customers.

Mr Chiang commented: “This finding of common use of personal data in unwanted P2P calls comes as a surprise to us. Under the Personal Data (Privacy) (Amendment) Ordinance 2012, a set of strict procedural requirements for the use of personal data in direct marketing has been introduced since 1 April 2013 and non-compliance with the requirements are offences. Some of the P2P calls that the respondents complained about could be such offences related to the companies’ failure to follow prescribed procedures and obtain the customers’ consent before using their personal data.”

“I appeal to all companies engaged in direct marketing activities, large or small, to acquaint themselves of the legal requirements and refrain from taking risks of non-compliance as it may result in a fine up to $500,000 and imprisonment up to 3 years.”

Public response to unsolicited direct marketing calls

In the 2008 and 2014 surveys, there was a similar proportion of respondents who had ever requested the callers not to call them again after receiving P2P calls involving use of their personal data (39% in 2014). The common reasons for not asking the callers to stop calling, as revealed in the 2014 survey, were: “respondents chose to hang up” (25%) and “not useful for ensuring the callers do stop calling” (20%). Indeed there was an increase in the percentage of callers who would continue to call even though they had promised not to call again (30% in 2008 and 42% in 2014).

The 2014 survey also revealed that 17% of the respondents who had not asked the callers to stop calling did not know they had the legal right to do so.

Mr Chiang said: “I would remind that it is a legal requirement for a company to notify the customer of his opt-out right when using his personal data in direct marketing for the first time. Thereafter the customer may exercise this right at any time and the company must then cease to use his data for direct marketing. To assist the public in exercising his opt-out right, we have issued a leaflet available at www.pcpd.org.hk/english/resources_centre/publications/files/opt_out_e.pdf. People who had the experience of their opt-out request not being honoured by the company concerned are welcome to lodge a complaint with us.”

The 2014 survey revealed that only 4.4% of the respondents who had received P2P calls from companies using their personal data had ever made a complaint about receiving unwanted P2P calls. Most (80%) of these complainants approached the companies concerned to seek redress.

Mr Chiang commented: “We have received a total of 306 complaints related to use of personal data in P2P telemarketing activities from 1 April 2013 to 31 March 2014. Although this figure is three times the corresponding annual figure in the previous two years, it should, in light of the 2014 survey findings, represent merely the tip of the iceberg.”

Enforcement action

Mr Chiang further commented: “As non-compliance with the prescribed legal procedures for using personal data in direct marketing amounts to offences, my investigative power is restricted to fact-finding in preliminary enquiries. The complaints have to be referred to the Police for criminal investigation. Since 1 April 2013, 18 complaints related to use of personal data in P2P telemarketing activities have been referred but we have yet to wait for the first successful conviction.”

“There are a number of interesting new features in the telemarketing activities being complained about. For example, in some cases involving offer of personal loans, the call in question was purportedly made by a bank but upon investigation, the bank denied having authorised its staff to make the call, and other lending institutions as well as intermediaries were identified to have been involved. In many such cases, the calls were made outside Hong Kong using 8-digit numbers assigned by OFCA from the numbering plan of Hong Kong, with ‘2′ or ‘3′ as the prefix. Calls made outside Hong Kong have caused difficulties in identifying the Hong Kong companies ultimately responsible for the calls, against which charges of contraventions of the provisions of the Personal Data (Privacy) Ordinance may be brought. The difficulties were compounded by the callers’ practice to change their numbers on a frequent basis.”

“I have met the Secretary for Justice and the Assistant Commissioner of Police (Support) in late June 2014 to discuss the new enforcement challenges we are facing. We agreed that we will step up our efforts in our ongoing investigation and prosecution work.”

“Meanwhile, I appeal to those who have received cold calls offering personal loans and ended up concluding a loan agreement with a Hong Kong lending institution different from the original caller to come forward with information on the referral procedures they have experienced and the identity of the Hong Kong lending institution and, where appropriate, the intermediary.”

The Full Survey Report (with Executive Summary) is available at:
www.pcpd.org.hk/english/resources_centre/publications/files/p2p_survey_e.pdf

The Privacy Commissioner Urges the Administration to Expand the Do-not-call Registers to Include Person-to-person Calls photo1

The 2014 survey revealed that over 99% respondents considered unwanted P2P DM calls as nuisance.

The Privacy Commissioner Urges the Administration to Expand the Do-not-call Registers to Include Person-to-person Calls photo2

The Consumer Council Chief Executive Ms Gilly Wong supports PCPD in its survey on P2P calls.

1 The survey was conducted by the Social Sciences Research Centre, The University of Hong Kong

2 The summarised results are an Appendix in the Legislative Council document “LC Paper No. CB(1)240/09-10(04)”, available here: <www.legco.gov.hk/yr09-10/english/panels/itb/papers/itb1109cb1-240-4-e.pdf>

3 All respondents who had received person-to-person direct marketing calls, excluding those who never considered that person-to-person direct marketing calls caused inconvenience to them.

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