Ofcom Rule Changes: Knock On Effect for Debt Collection
The UK’s communications regulator, Ofcom, published a Statement and Consultation paper setting out the review of its General Conditions of Entitlement at the end of 2017. The changes, which will apply to all UK communications providers, will come into effect on 1st October 2018. They follow a consultation on proposed changes in consumer protection in December 2016, and a consultation on network functioning and numbering and other technical matters in August 2016.
Seeking to ‘clarify and simplify many of the rules’ Ofcom have removed some rules that are no longer in use or relevant, and have implemented new rules on customer complaints, identifying vulnerable customers and calling line identification. These
will have a knock-on effect for debt collection and other third-party firms acting on behalf of the communications providers, who will have to ensure that they abide by the new rules.
In addition, Ofcom are also bringing in changes to network functioning and numbering, meaning that numbers displayed to those receiving calls must be valid, must uniquely identify the caller, and must be ‘dialable’, or able to be used to make a return or subsequent call. It will be incumbent on communications providers to take reasonable steps to identify calls on which invalid or non-dialable calling line identification (CLI) data is provided, and to block these calls, where technically feasible. Ofcom states that if such calls are blocked at the network level, they would be prevented from reaching consumers, thus reducing nuisance calls. Although not currently considered as a requirement, Ofcom suggests that communications providers should check CLI data where it appears as a mobile number, but appears to be coming from a fixed device – something that businesses who run such operations should be aware of.
Communications providers, along with any firm acting on their behalf, will also be required to have clear and effective policies and procedures for identifying vulnerable customers, to ensure that they are treated fairly and appropriately. Currently, Ofcom’s General Conditions impose certain requirements on communications providers in relation to end users with disabilities; the changes require that special measures be adopted for end-users whose particular circumstances may make them vulnerable. The changes also impose a requirement for communications providers to establish, publish and implement policies to ensure that the needs of vulnerable consumers are adequately considered and met. These must include:
Practices for ensuring the fair and appropriate treatment of vulnerable consumers
How information about vulnerable consumers’ needs will be recorded
How staff will be made aware of, and trained, to act in accordance with the policies
How the impact and effectiveness of the policies and procedures will be monitored and evaluated.
Whilst most debt collection firms will have similar policies and procedures for clients bound by FCA regulation, firms will now need to ensure that work for clients bound by Ofcom's rules are covered by robust policies and procedures for the fair and appropriate treatment of vulnerable customers.
Firms will need to consider the requirements of the current Data Protection Act and the incoming General Data Protection Regulation when establishing their policies and procedures. Firms should note that recording information about an individual’s health will constitute ‘sensitive personal data’ and they will, therefore, need to consider the legal basis for collecting such data.
Ofcom are also strengthening their complaints handling rules, which should aim to ensure that complaints are dealt with promptly and effectively, and keep consumers informed about the progress of their complaint. The current access to dispute resolution services rules are also amended, with Ofcom building on the current requirement for communications providers to have procedures for handling complaints that conform to a code of practice (the Ofcom Code) and to be a member of a recognised ADR scheme.
Again, where firms are carrying out work on behalf of a UK communications provider, they will need to ensure that complaints handling policies and procedures are updated in line with the incoming changes. In short, Ofcom will require that firms have and comply with procedures for the handling of complaints in connection with the provision of Public Electronic Communications Services, that conform with Sections 1 and 2 of the Ofcom Approved Complaints Code, and retain written records of complaints, in line with Section 3 of the Ofcom Approved Complaints code.
The changes include measures designed to improve transparency, such as a requirement for providers to proactively offer relevant information to the customer, instead of it being the responsibility of the customer to look for that information as is currently the case. There will also be an obligation to provide certain information on alternative dispute resolution in bills of every format, except where the bill is provided by text - an extension on the current rules, which require the information only to be included on bills in a paper format.
The changes also impact collection of debt in the sector. Changes to the current rules aim to ensure that users have access to fair debt collection and disconnection practices – the Statement and Consultation notes that between April 2016 and March 2017, Ofcom received 732 complaints from mobile customers alone in relation to debt collection and disconnection practices. Current rules are set out in Ofcom’s General Conditions section 13 – they will now appear combined with the rules on accuracy of bills and the provision of itemised bills in the new Condition C3.
The current requirements that providers of fixed-line voice call services should comply with specific requirements prior to taking any measures for debt collection and/or disconnection due to non-payment will be extended to all providers of both fixed and mobile telephone and data services.
In practice, communications providers will need to publish details of the measures they may take to effect payment or disconnection by a) sending a copy free of charge to any user who reasonably requests a copy, and b) placing a copy, in plain English and in a reasonably prominent manner, on their website. Whilst these changes are likely limited in impact to the communications providers themselves, debt collection firms and other third-parties should be mindful of the requirement that any measures taken to effect payment must be proportionate and not unduly discriminatory.
Ofcom will publish a final statement on further changes early this year. Head to Ofcom’s News and Updates page for further information.
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