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Direct marketing director punished

If your company engages in direct marketing, you may want to consider the following case published by the Insolvency Service:

A property renovation boss who caused his company to make more than 110,000 unsolicited marketing calls has been banned for five years. From its incorporation in August 2015, the company relied heavily on direct marketing techniques – cold-calling members of the public to advertise their services – to generate business.

The company should have used the Telephone Preference Service (TPS) list before making these calls to screen out individuals who had elected not to receive them.

The renovations company did not access the list and within 3 months in 2015 made over 110,000 calls to people registered with the TPS, who should not have received them.

The Information Commissioners Office (ICO) received 133 complaints about the unsolicited calls and, following an investigation, the regulators concluded that the company was in breach of the Privacy and Electronic Communications regulations.

The maintenance company failed to provide the ICO with evidence that they had acted correctly and, in January 2017, the ICO informed them that it was going to fine the company £80,000.

Before the penalty could be levied, however, Jonathon De Sousa (the director) placed the company into Creditors Voluntary Liquidation in March 2017.

An Insolvency Service investigation into Jonathon De Sousa’s conduct following the liquidation revealed that his company had also not paid £250,000 worth of taxes.

On 30 July 2019, the Secretary of State accepted a 5-year disqualification undertaking from Jonathon De Sousa after he did not dispute that he had caused his company to fail to comply with Privacy and Electronic Communications regulations and failed to pay the appropriate levels of tax.

Effective from 20 August 2019, he is prohibited from being involved in the formation, management, or promotion of a company without permission from the court.

Anthea Simpson, Chief Investigator for the Insolvency Service, said:

It is not acceptable for companies to harass members of the public with unwanted marketing calls, and we will continue to work with the ICO to curtail the activities of unscrupulous directors.

Directors who try to evade the consequences of their actions by putting their company into liquidation should expect to be investigated, which could lead to them being disqualified from being a company director again for a number of years.

Powers to protect the public from similar companies have recently been made stronger. Directors and managers of affected companies can be personally liable for fines of up to £500,000. This is intended to stop rogue companies closing down and setting up another business immediately afterwards.

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