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Regulators to crackdown on ‘compensation culture’ by fining companies found to be trading personal data


By Jennifer Faull, Deputy Editor

December 31, 2012 | 2 min read

In a bid to crack down on the increasing number of spam messages being sent to encourage people to take legal action for compensation, the Information Commissioner is planning to fine companies found to be trading personal details.

Every year millions of texts are sent asking people to claim over mis-sold pensions, mortgages and insurance. This is known as ‘claims farming’ and has been blamed for driving up false claims and the cost of insurance premiums. In the past year the number of official complaints about spam text messages and phone calls has increased by 43 per cent

However the Information Commissioners Office, responsible for regulating the data industry, has begun to issue fines for spam text messaging following an investigation into two men who run a firm that was sending more than 840,000 text messages a day. At least other firms are reportedly under investigation but the ICO has warned it hopes to go after law firms and claims management companies.

Steve Eckersley, head of enforcement at the ICO, told the Telegraph: “We intend to enforce against the instigators – the claims management companies and the solicitors that are buying in these services for bulk texting. They are providing the market that sees these messages being sent out.

“We consider this to be one of the most challenging areas we regulate and we have made it a top priority.”


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