Directors to become personally liable for breaches of electronic marketing laws

Here at Mackrell Turner Garrett, we are regularly asked to advise company directors on the rules surrounding electronic direct marketing, namely marketing to particular individuals by phone, fax, email, text or any other type of “electronic mail”.

This has been a key issue for our clients particularly following the General Data Protection Regulation (GDPR) coming into force earlier this year.

From 17 December 2018, important new rules will come into force in relation to direct marketing which will enable the UK’s Information Commissioner’s Office (ICO) to fine company officers up to £500,000 for a breach of rules regarding the use of unsolicited direct marketing and automated calling systems.

In practice, this means that company directors could be served significant fines as a result of nuisance calls and spam sent as part of marketing campaigns.

The rules on direct marketing are set out in the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR) which is key law to be considered alongside GDPR when marketing to individuals.

The rules are very complex and questions regularly arise as to whether businesses can market to individuals on their CRM systems and whether the necessary permissions were obtained in order to do so. The key question is usually whether the consumer who a business is targeting with marketing materials had given prior consent for communications to be sent to them, unless certain exemptions apply.

The ICO has been keen to introduce personal liability in respect of marketing breaches, particularly given that companies have historically tried to circumvent liability by winding up and then incorporating under new names.

Given directors will now be held accountable for breaches of the law, they must ensure that they are comfortable with the rules on direct marketing and that their businesses are in compliance prior to undertaking any direct marketing.

However, it remains to be seen whether compliance with direct marketing laws will be treated more seriously by businesses and whether the ICO will make examples of businesses following this extension of its regulatory powers.

For specialist advice regarding the legal parameters for electronic direct marketing in the UK, please contact Sehaj Lamba at Sehaj.lamba@mackrell.com.

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https://blog.mackrell.com/directors-become-personally-liable-breaches-electronic-marketing-laws/
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Sehaj Lamba
Sehaj advises businesses ranging from start-ups to multinational businesses, from a range of sectors, on commercial matters including the acquisition, protection and exploitation of intellectual property rights, matters relating to data protection and technology contracts covering software development and licensing, app development and website terms.