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Cold calls in hot water: Hong Kong consultation paper on P2P telemarketing

24 July 2017

Businesses may often use peer-to-peer ("P2P") telemarketing calls involving interpersonal communication to promote goods and services directly to customers. While such calls may be effective in some cases, they appear to be not so welcomed by customers in Hong Kong. A 2015 government consultancy study in Hong Kong reports that an overwhelming 96% of call recipients considered such calls as nuisance, with many not answering or hanging up soon after.

Considering public sentiment towards P2P calls, the Hong Kong Commerce and Economic Development Bureau ("CEDB") recently launched a public consultation on measures to boost P2P regulation of telemarketing. Three options have been proposed. In particular, CEDB is looking to consider non-statutory regimes to be implemented alongside statutory options that tend to take more time to come into effect. Public consultation will close on 31 July 2017.

Current regulatory framework

There is currently no specific regulation on P2P telemarketing calls in Hong Kong. The Personal Data (Privacy) Ordinance ("PDPO") controls direct marketing activities only where there is use of personal data. In reality, many P2P calls are cold calls that do not involve the use of personal data and therefore remain unregulated by PDPO.

On the other hand, the Unsolicited Electronic Messages Ordinance ("UEMO") also does not cover P2P calls. UEMO only regulates the sending of commercial electronic messages such as faxes, e-mails, text messages and pre-recorded telephone calls. The current Do-not-call Registers administered by the Office of the Communications Authority which allow the public to unsubscribe from unsolicited faxes, text messages and pre-recorded telephone calls do not cover P2P calls.

Non-statutory regulation – self-regulation and smartphone apps

The two suggested routes to non-statutory regulation are self-regulation and call-filtering smartphone applications.

A trade-specific self-regulatory regime would depend on codes of practice established by trade associations with tailor-made provisions to tackle P2P calls. Such codes are already in place in the finance, insurance, telecommunications and call centre industries. Most companies surveyed by the government preferred this mode of regulation. However, an effective implementation of this would require strong leadership from trade associations.

Call-filtering apps screen and block telemarketing calls by relying on voluntary public contribution to generate a list of known numbers, and allow recipients to block calls. A number of these apps already exist in the market. CEDB suggests government collaboration with software companies to improve coverage and ensure that data privacy of users is respected. An obvious limitation of this option is that apps are not applicable to fixed lines and older models of mobile phones.

Adopting a statutory Do-not-call Register

This option involves keeping a list of phone numbers that telemarketers are prohibited from calling. There is stronger deterrent effect as non-compliant telemarketers would be subject to legal sanction, either civil or criminal. Of the 17 jurisdictions CEDB examined, all but one have established statutory Do-not-call Registers. For instance, the UK put in place such a register as long ago as 1999, prohibiting organisations from sending unsolicited P2P calls to any telephone number registered in the Telephone Preference Service. It appears that CEDB is open to adopting a similar, opt-out regime in Hong Kong to shield users from being disturbed by P2P calls.

However, the overall effectiveness in implementing a register may be compromised by caller-ID spoofing (display of false numbers), overseas callers and various issues with evidence collection. There are few reported overseas cases on breaches that led to successful enforcement (by formal warnings or court action).

Conclusion

The consultation is not wholly driven by consumer data protection. The need to balance data privacy against the right of businesses to conduct legitimate marketing and the livelihood of telemarketing employees in Hong Kong is apparent throughout the consultation paper.

Non-statutory measures raise the concern of over-reliance on the telemarketing field to voluntarily abide by non-legally binding measures, as well as the public to report on nuisance-inflicting calls. As much as these are "softer" measures, they may win the race over statutory measures for being quicker to implement and less expensive to enforce sanctions via trade associations.

Overseas experiences suggests that no measures are fool-proof, so P2P regulation in Hong Kong is predominantly a balancing act to reduce the nuisance inflicted by unwelcome calls while avoiding hardship to businesses.

We have been closely following the developments on anti-spam laws in Hong Kong. Since the implementation of UEMO in 2007, there have not been a large number of enforcement/prosecution cases, but CEDB's consultation is in line with the global trend to tighten control in this space. Last year, we have also seen the Hong Kong Magistrates' Court finding that mobile chat messaging is subject to UEMO, as reported here.

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