Effectiveness of actions to reduce harm from nuisance calls in Scotland

Annex D: Independent factors influencing future levels of nuisance calls

The attractiveness of telemarketing to UK recipients depends on:

1. Market opportunities for goods or services that call recipients may buy.

2. The cost-effectiveness of telemarketing compared with alternative marketing channels.

The first of these is largely independent of harm-reducing actions; market opportunities arise and may then fall again in largely unpredictable ways, associated for example with broad social trends and the state of the economy. Some opportunities seem to be created by government action, with PPI as a case in point; but it is debatable whether such necessary measures can be brought in without creating commercial opportunities. Again, informed observers may attribute the relative decline in PPI calls to the market having burned itself out, more than to relevant regulatory actions. (It has been suggested that the end of the period during which compensation for PPI can be claimed, in August 2019, may lead to a surge of PPI calling as the deadline gets near.)

Most harm-reducing actions aim to cut down on the level of calling through reducing the relative cost-effectiveness of telemarketing. But cost-effectiveness also depends to a significant extent on independent factors, in particular on continuing reductions in the cost of targeting, making and conducting bulk calls, resulting from technical advances, for example in cloud, artificial intelligence, voice recognition and data analysis technologies.

UK markets often follow North American developments. We note that in the USA, making recorded marketing calls (“robocalling”), although usually illegal, has risen greatly and continues to rise, leading to ever more complaints to the Federal Trade Commission ^[127] . We also note that a 2016 survey for the Canadian regulator, CRTC, of Canadian telemarketers showed an expected increase in telemarketing; and industry participant First Orion forecasts continuing growth of at least 10% a year in nuisance and scam calls. These indicators suggest that, other things being equal, telemarketing calls to the UK would go on growing.

On the other hand, the continuing voice telephony trend in the UK, away from landlines (other than as an incidental part of broadband packages) and towards mobile phones ^[128] , now usually smartphones ^[129] , may have an opposite effect. The higher cost of calling to mobiles (compared with calling to landlines) is fast reducing. However, smartphones have some built-in call filtering capability and users can access many call handling apps. The much greater ease with which smartphone users can choose which calls to answer, together with a growing proportion of landlines that are never answered ^[130] , could reduce the relative attractiveness of voice telephony as a marketing channel.

In 2014, a marketing report ^[131] showed a declining receptiveness among the respondent population to any kind of telephone marketing approach (with email or direct mail being much preferred, though no marketing approach at all was the most popular option). This contrasted strongly with marketers’ reported perceptions of customer preferences. Possibly, in some circles, there will be a growing recognition of this mismatch and adjustments aiming to reduce it. In particular, “warm” calling (to a company’s own customers, which many people regard as a nuisance) could well reduce as companies come to realise its potential to alienate customers rather than cement their loyalty.