Directors could face £500,000 fines over nuisance calls

Company directors could be held personally liable for nuisance calls and face fines of up to £500,000 under tough new measures being put forward by the government.

Currently, only businesses are liable for such fines. This has led to cases where some directors try to escape paying penalties by declaring bankruptcy – and then start a new business under a different name.

The Information Commissioner’s Office (ICO) revealed last week it had recovered just over half of the £17.8m in fines issued for nuisance calls since 2010, as companies go into liquidation to avoid big penalties.

The new proposals will provide the ICO with the powers it needs to hold company directors directly responsible with further fines of up to £500,000.

The Insolvency Service can already disqualify people from boardroom positions and failure to adhere to this ruling could lead to a prison sentence.

The Minister for Digital and the Creative Industries, Margot James, said: “For too long a minority of company directors have escaped justice by liquidating their firms and opening up again under a different name.

“We want to make sure the Information Commissioner has the powers she needs to hold rogue bosses to account and put an end to these unwanted calls.”

The proposals are now subject to public consultation.

Meanwhile, the government has also:

• Introduced a measure in the Digital Economy Act 2017 to make it a requirement for the Information Commissioner to issue a statutory code of practice on direct marketing
• Amended the Privacy and Electronic Communications Regulations (PECR) to require all direct marketing callers to provide Caller Line Identification
• Lowered the legal threshold at which the ICO may impose a monetary penalty on organisations breaching PECR (a previous requirement to prove that the call caused alarm or distress was removed)
• Made it easier for the ICO to more effectively share information with Ofcom in relation to nuisance calls through an amendment to the Communications Act 2003
• Given the ICO the power to issue monetary penalty notices up to £500,000 for serious breaches of PECR;
• Introduced a ban on cold calling in relation to claims management services through the Financial Claims and Guidance Act 2018, except where the receiver has consented to such calls being made to them
• Given £500,000 to Trading Standards to help install call blocking devices installed in the homes of vulnerable people.

Please contact Sarah Liddiard if you would like more information about the issues raised in this article or any aspect of company law.