Compensation Bill [HL]

moved Amendment No. 94:"Page 10, line 11, at end insert—" ““(1)   Regulations shall make, or shall require the Regulator to make, provision about the advertising standards required of an authorised person. (2)   Regulations under sub-paragraph (1) shall in particular provide that— (a)   advertising should be compliant with the codes of practice about professional conduct; (b)   advertising must not refer to the monetary value of any type of claim whether directly or by reference to money’s worth; (c)   where an alternative service is or may be available without charge, advertising must state so clearly and unambiguously; (d)   reference to advertising in this paragraph shall include (but is not limited to)— (i)   television or radio advertising; (ii)   advertising in publications; (iii)   advertising by means of mail, leaflet or email inducing people to establish whether they have a claim; and (iv)   advertising on the internet.”” The noble Lord said: I hope that it will be for the convenience of the Committee if we take with Amendment No. 94 Amendments Nos. 95 and 96, although they deal with separate issues. I shall seek to explain. Amendment No. 94 requires rules of conduct on advertising standards. I recall that the Minister mentioned in her letter, which she circulated to the Committee in December, that:"““the Advertising Standards Authority regulates advertising generally and we have jointly commissioned research into the impact of personal injury advertising. The research will help determine the effects of personal injury advertising on perceptions and attitudes among the target audience for this advertising and to identify the specific causes of any such effects in relation to the following””—" and there is a series of instances. The first is encouraging people to ““have a go””; the second is the understanding of the law and process, including costs and risks, involved in bringing claims; the third is willingness to consider bringing genuine claims; and the fourth is how current regulatory regimes should be strengthened. It would be most helpful if the Minister could bring us up-to-date on the present position. It would also be of great assistance to the Committee to know what action has already been taken by the Advertising Standards Authority. It may be that the Minister would like the opportunity to reflect and have further discussions with the authority and then to write to Members of the Committee between now and Report. It may be helpful if I give examples of two particular aspects of advertising which we consider should be policed. The first is dealt with in subsection (2)(b) of the amendment. It relates to the use of adverts which concentrate on the money that a claimant can recover. The second is dealt with in new subsection (2)(c), mirroring the provision in Amendment No. 36, which requires advertising services that seek to compete with freely available alternatives to say so. Under subsection (2)(d), references to advertising include advertising on the Internet, which is becoming a particular problem both in the personal injury field and on the mis-selling of financial products. I will return to that in a moment. It seems to me that again provision is required on the face of the Bill. The issues addressed here are, arguably, not found in any code of conduct from the Advertising Standards Authority. I think that there need to be sector-specific rules. I look for a moment at the Financial Services Authority’s conduct of business source book, which is a useful document particularly as regards at financial promotion. The Minister will know my views about the FSA model, as I have described it, which I strongly recommend for the regulation of claims management companies. There are some pretty strict rules. For instance,"““A firm should take reasonable steps to ensure that, as for a non-real-time financial promotion: (a) its promotional purpose is not in any way disguised or misrepresented; (b) any statement of fact, promise or prediction is clear, fair and not misleading and discloses any relevant assumptions””," Later, it states:"““(e) it does not contain any false indications, in particular as to: (i) the firm’s independence; (ii) the firm’s resources and scale of activities; or (iii) the scarcity of any investment or advice; (f) the design, content or format does not in any way disguise, obscure or diminish the significance of any statement, warning or other matter which the financial promotion is required by this chapter to contain””." What I have read out falls within a comprehensive code, clearly established and readily available for the Minister if she wanted to use it and were attracted, as I am, that the FSA model is the right way forward. Amendment No. 95 is intended to prohibit cold calling by any means. Cold calling is one of the blights of modern life, especially for vulnerable groups such as the elderly. The need for such restriction is probably self-explanatory. As Members of the Committee may already know, a number of noble Lords are addicted to what is commonly known as ““crackberry””—they possess a BlackBerry on which they receive e-mails and they cannot stop, day or night, accessing their e-mails. It is a wonderful experience, except it is debilitating for family life. I say only that the number of unsolicited e-mails that I receive not only from Nigeria but from a range of other locations is breathtaking and the number is increasing all the time. My law firm establishes all sorts of walls, which are supposed to prevent these e-mails coming in, but they cascade in still. Of course, they are not sought by me; they are an aspect of cold calling, which I dislike. My research on the Internet, to which I have referred on several occasions, has led to a rash of e-mails from providers in the market. I had not realised that they are monitoring every word that I say in this Committee. That is good—it is all public. The hapless surfer who gets on to a claims farmer website is guaranteed any number of cold calls. Whenever I clock into one of these sites, a cascade of them then heads in my direction. On a previous occasion, I asked whether the Minister was considering a dialogue with Internet service providers about that—it seems long overdue. I shall give one example of a new angle. It is the same advertising space as that occupied by the claims farmers, targeting the same vulnerability within society. I do not think that I have stressed this point enough in this Committee and I do so now. It is an invitation from ABC Loans headed:"““In the last year, ABC helped 31,845 people find the right loan—whatever their circumstances””." The next heading is:"““Apply for a homeowner loan today and select your free gift:""Cruise to Spain—4 people       Cruise to Amsterdam—4 people       Cruise to Germany—4 people      Cruise & Dine—4 people      Flying Lesson      Gliding Lesson      Microlight Flight      Learn to Play Golf . . .       Pamper Day””." The mind boggles. I hope that Hansard is not recording some of the exchanges that are going on. I find these websites pretty distasteful. Of course, if anyone is rash enough to log on to them, they are immediately identified. I turn for a moment to a commonly held perception that there is a law that prevents these cold, or unsolicited, calls, but at present there is not. I say that because last November the Welsh Labour MP, Kevin Brennan, called on MPs to pass a Bill tightening the rules on cold calling and, in particular, the large number of silent calls generated by the use of computerised dialling equipment. People, including a 91 year-old, have told me that they suddenly get a whole series of calls, from a location that they are unable to identify, seeking to sell them products or encouraging them to make a claim. A lot of people are distressed by that. Kevin Brennan disclosed that at present the only protection against cold calling is the Telephone Preference Service, which sets out a list of individuals who have opted out of receiving direct marketing calls. On 9 November 2004, Mr Brennan said:"““One commonly cited solution is to register with the telephone preference service . . . Although a £5,000 fine is already in place for companies breaching the TPS, to date not one fine has been levied against any of them and not one licence has been revoked during the legislation’s six-year history””.—[Official Report, Commons, 9/11/04; col. 722.]" I hope that the Minister shares my view that there is a need for legislation to stop cold calling. I put forward Amendment No. 95, which might or might not be a step in the right direction—I believe that it is. But I hope that in response to that amendment the Minister can give some reassurance that the Government are not only aware of the problem but determined to do something about it. Amendment No. 96 concerns another problem, which is the need for a cooling-off period. It requires the introduction of a cooling-off period in all contracts. Again, the need for such a provision is probably self-explanatory. A number of contracts that we have seen so far purported to have some sort of cooling-off period, but in fact operate to prevent the claimant from withdrawing a contract unless a withdrawal fee is paid. That is despicable. The claimant who responds to some of these high-pressure sales techniques may feel that he is protected but then discover that he is locked in. The Better Regulation Task Force report referred to the sales practices of those companies and the regulator must be sent a clear message to rein them in. The Minister and her team may want to consider the detail of the amendment. I have tried to close all the loopholes, but it may not be watertight. However, in this debate we are talking about three serious problems and I look forward to hearing the Minister’s response. I beg to move.