Two men have been fined £440,000 for sending millions of spam text messages promoting compensation claims for personal injury or misselling of payment protection insurance. It is the first time the Information Commissioner (ICO) has used its powers to impose fines for this kind of case.
Christopher Niebel and Gary McNeish were part of a growing industry against which the authorities are stepping up their fight. This type of activity is all too familiar to mobile phone users across Britain, who are being increasing bombarded with message such as: "CLAIM TODAY, you may be entitled to £3500 for the accident you had. To CLAIM free reply CLAIM to this message. To opt out text STOP". Similar messages about missold PPI insurance are also becoming increasingly common as people try to cash in on the problem.
Greater Manchester-based Tetrus Telecoms offered to send out more than 800,000 such texts a day on behalf of its clients – claims management companies looking for compensation cases to pass on to lawyers. If a phone user expresses interest, they will be passed to a claims management company which can sell their case on to a solicitor for a commission of around £500.
The Information Commissioner, Christopher Graham, commented: "The public have told us that they are distressed and annoyed by the constant bombardment of illegal texts and calls and we are currently cracking down on the companies responsible, using the full force of the law. The two individuals we have served penalties on today made a substantial profit from the sale of personal information. They knew they were breaking the law and the trail of evidence uncovered by my office highlights the scale of their operations."
According to the ICO, handwritten notes were found in one of Tetrus' offices suggesting the company had been using 70 mobile phone simcards a day. SMS messages would be sent by inserting them in a card reader attached to a computer, until each card's text message limit had been reached.
Niebel and Nash, the company's directors, were found guilty of breaching the Privacy and Electronic Communications Regulations 2003, which require that marketing companies sending SMS messages must identify themselves and offer a way for recipients to opt out. Tetrus was allegedliy making sales of more than £7,000 a day and its directors were earning tens of thousands of pounds. Niebel commented that the company had permission to send out texts because the users on the lists they were using had given their "consent" to be contacted. He claims that he has not been provided with evidence to support the ICO's allegations and they had not been examined in a court. He said intended to challenge the fine. Neibel also said he was a minor shareholder in the company and he said the majority was owned by Mr McNeish, who now lives in Thailand.
The case highlights the trade in potential clients for compensation claims, and the private data that enables them to be contacted. Texts are frequently sent to random numbers in the hope that they link to active mobile phones. Spammers also buy black market lists of numbers on the internet. For people receiving unwanted messages, responding can lead to the number being marked as active – making it more valuable to so-called 'list brokers' – with each proven number being worth £5.
Mr Graham said: "Our message to the public is, if you don't know who sent you a text message then do not respond, otherwise your details may be used to generate profits for these unscrupulous individuals."
The ICO recommends that such messages are deleted.