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LCQ4: Regulation of person-to-person telemarketing calls

Following is a question by the Hon Michael Tien and a reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (November 20):


In 2007, the Government implemented the Unsolicited Electronic Messages Ordinance and established Do-not-call Registers for the purpose of regulating the sending of commercial electronic messages, including fax messages, emails, short messages and pre-recorded phone messages, but person-to-person telemarketing calls were excluded. Subsequently, to further protect the personal privacy of the public, the Personal Data (Privacy) (Amendment) Ordinance 2012 came into full operation in April 2013, stipulating that any data user must, before using personal data in direct marketing or providing personal data to another person for use in direct marketing, notify the data subjects of its intention of so doing and receive their consent. Yet, the results of a survey conducted by the media have revealed that the problem of members of the public receiving marketing messages is still rather serious in recent years and the situation has not been improved so far. Hong Kong people receive an average of 150 telemarketing calls per person each year, and they also frequently receive marketing messages sent through short messages, pre-recorded phone messages and even mobile messaging applications, which have caused serious nuisance to and impact on their daily life. In this connection, will the Government inform this Council:

(1) whether it has studied and assessed the current situation of telemarketing activities, such as the daily average number of telemarketing calls received by each member of the public and the economic losses suffered by them due to such calls;

(2) given that the Office of the Privacy Commissioner for Personal Data had referred a total of 18 complaints relating to the use of personal data in telemarketing activities to the Police during the period from April 1 last year to early August this year but, among them, there is no case in which the relevant persons were convicted, whether the authorities have conducted regular reviews of the effectiveness of the existing legislation in preventing the use of personal data in telemarketing activities; and

(3) given that the authorities have all along refused to introduce legislation to regulate person-to-person telemarketing calls on the ground that it will affect the livelihood of 20 000 persons, whether the authorities have any means to enable members of the public to exercise their rights to be free from the nuisance caused by such type of calls; if they do, of the details; if not, the reasons for that?



The Unsolicited Electronic Messages Ordinance (UEMO) (Cap. 593) came into full operation in December 2007. It regulates the sending of commercial electronic messages, including pre-recorded phone messages, short messages, fax messages, emails, etc. When sending commercial electronic messages, senders must comply with the rules of sending commercial electronic messages prescribed under the UEMO. In 2008, the Communications Authority also established three do-not-call registers for fax messages, short messages and pre-recorded phone messages in accordance with the UEMO.

Since the operation of the UEMO in 2007, the number of reports on suspected contravention of the UEMO has drastically decreased from some 8 000 per year in 2008 to around 2 000 per year in recent years. It is believed that such decrease reflects the effectiveness of the implementation of the UEMO.

At present, the UEMO does not cover person-to-person telemarketing calls (P2P calls) mainly because most business enterprises in Hong Kong are small and medium enterprises (SMEs) which rely on electronic communications as a means of marketing. To avoid affecting the development of normal electronic marketing activities, P2P calls were excluded from the regulatory ambit when the Government formulated the UEMO.

On the other hand, the Personal Data (Privacy) (Amendment) Ordinance 2012 (Amendment Ordinance) introduced multiple amendments to the Personal Data (Privacy) Ordinance to strengthen the protection of personal data privacy. The Amendment Ordinance was implemented in two stages in 2012 and 2013. Thirteen new provisions concerning direct marketing, including the provisions which require "Data user to take specified action before using personal data in direct marketing" and "Data user must not use personal data in direct marketing without data subject's consent", commenced operation on April 1, 2013.

My reply to the three questions raised by Hon Michael Tien is as follow:

(1) The Government has been monitoring the situation of P2P calls. The overall numbers of enquiries and complaints related to P2P calls received by the Commerce and Economic Development Bureau and the Office of the Communications Authority have decreased in recent years. The overall numbers in 2012, 2013 and 2014 (up to end of October) are 2 010, 1 693 and 1 004 respectively, among which enquiries comprise a substantive part. According to the survey conducted in 2008 by a consultant instructed by the Government, respondents who took part in the survey indicated that they had received on average 3.47 P2P calls in the previous week. On the other hand, the survey conducted by the Office of the Privacy Commissioner for Personal Data (PCPD) in March 2014 showed that the respondents had received 3.8 P2P calls during the week before they took part in the survey. The Government has not studied the economic impact brought about by P2P calls to the members of public who have received those calls.

(2) The Amendment Ordinance came into full effect in April 2013. It imposes stringent regulation on the use of personal data in direct marketing and deterrent penalties on violations. Use of personal data in direct marketing in contravention of provisions of the Amendment Ordinance is punishable by a fine up to $500,000 and up to three years' imprisonment; where provision of personal data for gains is involved, the offender is liable to a fine up to $1,000,000 and up to five years' imprisonment.

From April 2013 to early August 2014, the PCPD referred to the Police 18 complaints concerning use of personal data in person-to-person direct marketing calls. Among these cases, 15 involved direct marketing calls made after the commencement of provisions on direct marketing in the Amendment Ordinance. Investigations are still on-going for five of the cases. Of the ten cases closed, Police investigations revealed no incompliance with the law in two cases; the other eight cases were not substantiated for criminal proceedings, mainly because complainants refused to further assist in investigations or the direct marketing calls were made outside Hong Kong.

With the implementation of the Amendment Ordinance, the PCPD has successfully raised the community's awareness and understanding of restrictions on the use of personal data in direct marketing through public education as well as promotion and training activities for the trades. The Constitutional and Mainland Affairs Bureau will continue to keep in view the implementation of the Amendment Ordinance and latest developments.

(3) The issue in relation to P2P calls is complicated, which involves, inter alia, issues relating to the use of personal data, nuisance, legitimate marketing and flow of information. We do not object to the suggestion of strengthening the regulation of P2P calls outright and has taken an open-minded approach towards the suggestion. However, any tightening of regulation may have an impact on the employment and livelihood of some tens of thousands who are engaged in carrying out legitimate marketing activities, as well as commercial transactions that are facilitated by the relevant legitimate marketing activities carried out by various enterprises, particularly SMEs. Therefore, when exploring the way forward for any tightening of the regulation on P2P calls, careful and thorough consideration of these relevant factors must be taken.

Sectors that make most of the P2P calls are the four sectors of finance, insurance, telecommunications and call centres. To minimise the nuisance caused to the public by telemarketing calls, the Government has since end 2010 actively encouraged the trade associations of those four sectors to draw up and issue their respective codes of practice on P2P calls (industry codes) and to encourage the industries concerned to adopt the best practice recommended in their industry codes. Since June 2011, the four trade associations have already joined the self-regulatory scheme, and P2P calls made by members of these trade associations are regulated by their industry codes. If members of public do not want to receive P2P calls from a particular company, they may make an unsubscribe request to the relevant company. The industry codes stipulate that telemarketers should honour the requests relating to unsubscribing P2P calls made by recipients. The relevant industry codes have been uploaded on the websites of the respective trade associations.

We have been maintaining communications and having meetings with the relevant trade associations in order to understand the latest implementation situation of the scheme and industry codes. Recently, the finance sector has improved its industry code, requesting telemarketers to take the initiative in providing their names and official contact numbers of their companies to the recipients, as well as stipulating the practices to be adopted if there is a need to obtain more information from the recipients or arrange meetings. These aim at allowing the recipients to verify the identities of the telemarketers.

Thursday, November 20, 2014