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Press releases 2010 -

OFT crackdown on illegal cold-calling

credit card + phone

113/10    2 November 2010

The OFT has taken action against lead generation firm Compensation Professionals Network Ltd (CPN) as part of a crackdown on illegal cold-calling practices in the debt management sector. As a result, CPN no longer holds a consumer credit licence.

Lead generation firms source information from people looking for debt help or loans and sell this data on to other businesses such as debt management firms.

The OFT took action against CPN to prevent unfair and improper business practices including the sending of automated messages without consent, implying that calls were made on behalf of the government, misleading consumers by claiming to be able to write-off consumer debts and claiming that these services were free.

The action against CPN follows a previous OFT warning to the debt management industry to stop using unsolicited and misleading cold-calling practices to generate client leads.

The OFT is working with the debt management industry trade associations Debt Managers Standards Association (DEMSA) and Debt Resolution Forum (DRF) to warn member debt management firms that they should only use licensed lead generation firms and that failure to do so could lead to licensing action. This will be reflected in the OFT's revised Debt Management Guidance due to be published for consultation next year.

Ray Watson, Director of the OFT's Consumer Credit Group, said:

'Misleading or improper lead generation and cold-calling can be a real nuisance and cause problems for consumers. The OFT has taken action against CPN to safeguard the interests of consumers. Debt management companies should take care to only deal with reputable lead generators that are licensed by the OFT. Failure to do so will put the companies themselves at risk of enforcement action.'

The OFT has worked closely with the Information Commissioner's Office, which is the lead enforcer on cold-calling. David Smith, Deputy Commissioner and Director of Data Protection at the Information Commissioner's Office (ICO) said:

'We welcome the OFT's action against CPN. Automated calls promoting debt solutions cause real annoyance and anxiety to individuals. We will continue to work together with the OFT to crack down on these harmful practices.'


  1. A determination to revoke CPN's licence was issued by the OFT on 21 December 2009. CPN appealed against the OFT's determination but subsequently surrendered its licence and withdrew its appeal. Following the First Tier Tribunal's consent to the withdrawal on 19 October 2010, the licence terminated with immediate effect.
  2. CPN's registered office address is Vickers House, Priestly Road, Basingstoke RG24 9NP and its principal place of business is Ringway House, Ground Floor, Bell Road, Basingstoke, RG24 8FB. The OFT understands from CPN that it used call centres in Blackburn, Budapest, India, London and Southend to generate leads. 
  3. Swansea based business, FSDM Ltd, which the OFT alleged was an associated business of CPN, withdrew its consumer credit licence application after the OFT said it was minded to refuse it. 
  4. The OFT has also imposed conditions on the licences of a further three debt management companies, which prohibit them from using unlicensed third party lead generators. 
  5. The Consumer Credit Act 1974 (the Act) requires most businesses offering credit, lending money or involved in activities relating to credit or hire to be licensed by the OFT. Traders generating debt management leads must hold the debt counselling licensing category. 
  6. The Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECRs) regulate how cold calling should be carried out. Although the ICO has an enforcement lead in this area, the OFT considers any breaches of PECRs regulations by a licensee as constituting business practices that are unfair and/or improper within the meaning of section 25(2A)(e) of the Act. 
  7. Consumers wishing to avoid receiving unsolicited and unwanted calls should contact the Telephone Preference Service (TPS). Further details can be found at the Telephone Preference Service website
  8. Ten businesses were warned as part of the OFT's market facing action on cold calling on 25 May 2009 - see the press release.    
  9. For advice on dealing with debt, see the Directgov website.

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