When rebrands go wrong

(And how to avoid the pitfalls)

Claims management needs better policing

The proliferation of mobile phone text scams shows that the sales lead supply chain is in need of greater oversight.

Michael

Another chink of light in the story of text spam emerged this weekend, after the Mail on Sunday reported that Indian IT firm Vintels sold it 2,000 UK mobile phone numbers as sales leads. The numbers belong to people who responded to texts telling them to claim compensation for mis-sold payment protection insurance (PPI), according to the newspaper.

Being based in India and therefore beyond the jurisdiction of UK regulators, Vintels was not among the companies fined by the Information Commissioner’s Office (ICO) last month for breaching its rules. The Mail reported Vintels’ chief executive as saying that the texts it sends to UK mobile numbers are created in India and sent via servers in the US.

Unfortunately, this knowledge offers no comfort. According to the ICO, in the case of most text scams it suspects that texts are sent to phone numbers generated randomly - something that is not difficult to do since UK mobile numbers all have 11 digits beginning with ‘07’. If you respond, you are confirming your number is live; and if you respond indicating interest in pursuing a claim you are marking yourself as a potential sales lead, which can be sold to claims management companies.

This is a very easy model to replicate and to run offshore, as the Mail’s report suggests.

That’s very bad news for consumers who might have hoped the ICO’s recent action would deter other firms from sending spam texts. It means that the problem is likely to keep coming back, and that it won’t be restricted to PPI and personal injury cases but could extend to any kind of insurance or compensation scheme.

It’s also bad news for the claims management industry, since it reveals how shoddy some firms are at checking the provenance of the sales leads they buy and the data companies that sell them. There would be no market for data collected through spam if claims management companies were more careful about what they were buying. The supply chain clearly has a big role to play in wiping out spam texts - and it is in the interests of claims management firms to do so because consumers are likely to become suspicious of any company in the industry otherwise.

If the industry can’t find market-based sanctions for companies dealing in this data, then there needs to be tougher enforcement of regulations to protect consumers. Claims management is already regulated by the Ministry of Justice, and firms have to be authorised before they can do business, so the MoJ should more proactively investigate where companies buy their leads and shut down those that knowingly use suppliers which break UK rules.

Make no mistake, consumers are getting very angry about text spam and rightly so. Those with the buying power to promote best practice, and to shame the worst, need to act now.

Is your work with data worthy of industry recognition? If so, you should be entering the data-driven marketing category at Marketing Week’s Engage Awards 2013.

Click here to submit your entry before 15 January 2013.

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