ARTICLE
21 October 2024

Draft Guidelines To Curb Unwanted Business Calls

SR
S.S. Rana & Co. Advocates

Contributor

S.S. Rana & Co. is a Full-Service Law Firm with an emphasis on IPR, having its corporate office in New Delhi and branch offices in Mumbai, Bangalore, Chennai, Chandigarh, and Kolkata. The Firm is dedicated to its vision of proactively assisting its Fortune 500 clients worldwide as well as grassroot innovators, with highest quality legal services.
Over the past few years, unsolicited business calls have become a significant nuisance for individuals across India. Despite the existence of regulations such as the Do-Not-Disturb...
India Media, Telecoms, IT, Entertainment

Over the past few years, unsolicited business calls have become a significant nuisance for individuals across India. Despite the existence of regulations such as the Do-Not-Disturb (DND) registry, millions of consumers continue to face an overwhelming number of pesky calls daily, ranging from promotional offers to sales pitches. According to recent studies1, more than 60% of Indians reported receiving three or more spam calls daily in the last 12 months. Alarmingly, 90% of these individuals were registered on the DND list but continued to experience a flood of unwanted communications.

In response to growing concerns, the Department of Consumer Affairs is in the process of finalizing draft guidelines2 aimed at addressing the issue of unwarranted business communications. These guidelines, once notified, are expected to establish a comprehensive framework for businesses, intermediaries, and telemarketers to ensure that consumers are no longer subjected to unauthorized or unsolicited business calls.

Who Will Be Impacted by These Guidelines?

The proposed guidelines will apply to a broad range of entities involved in business communications. Specifically, they cover:

  1. The Maker of the Business Communication
    This refers to any person or establishment responsible for initiating or causing business communication, including telemarketers, businesses, or their agents.
  2. Engaging Entities
    Any business or organization that engages a telemarketer or third-party agent to make business communications on its behalf will be subject to these guidelines.
  3. Beneficiaries
    Businesses that are the intended beneficiaries of the communication, even if they did not directly make the call, will be held accountable.
  4. Named Entities
    If the communication is made in the name of a specific business, that entity will also be covered by the guidelines.

Scope of Unwarranted Business Communication

The guidelines define "unsolicited and unwarranted business communication" as any contact made for the sale or promotion of goods and services that is not explicitly consented to by the recipient. This includes communications made in violation of registered preferences, such as those who have opted into the DND list or those who have not provided consent through the Digital Consent Acquisition (DCA) system.

Example Scenarios:

Scenario 1– A consumer, M, is a customer of Bank X and receives repeated promotional calls for pre-approved loans from multiple numbers claiming to be associated with Bank X. These calls are initiated by telemarketer Y, hired by Bank X to make such communications. Under the proposed guidelines, both Bank X and Y would be responsible for the unsolicited calls.

Scenario 2- A consumer, M, who has an account with fintech company X, receives promotional calls about loans from Bank W, which has partnered with X. These calls are initiated by Y on behalf of both Bank W and fintech X. In this case, all three entities—W, X, and Y—would be held accountable under the new guidelines.

Stricter Regulations for Business Communication

Under the draft guidelines, unsolicited business communications will be strictly regulated to protect consumer rights. The key provisions include:

  1. Mandatory Consent
    All businesses must obtain explicit, specific consent from consumers before initiating business communications. For voice calls and SMS, consent will only be valid if obtained through the DCA facility provided by telecom service providers.
  2. Compliance with Number Series and SMS Headers
    Communications must be made using telephone numbers or SMS headers that have been registered with telecom service providers. For example, promotional calls should only be made from numbers within the 140xxx series, and service or transactional calls should come from the 160xxx series.
  3. Clear Identification and Purpose Disclosure
    Every business communication must clearly identify the calling entity (e.g., the business name) and disclose the purpose of the call. For example, if an insurance broker calls a consumer, they must disclose both the name of the brokerage firm and the reason for the call.
  4. Simple and Effective Opt-Out Mechanism
    Consumers must be provided with a clear, simple, free, and effective option to opt out of receiving future business communications. Furthermore, if a consumer opts out, they must receive a confirmation of the opt-out request.
  5. Penalties for Unauthorized Communications
    Businesses that fail to comply with the guidelines will be penalized. This includes making unsolicited calls from unregistered numbers, contacting consumers who have opted out, or failing to properly identify the business and purpose of the call.

Avoiding Violations of the Guidelines

To prevent violations, businesses, telemarketers, and their agents must be diligent in following the rules outlined in the proposed guidelines. A few key points to avoid potential contraventions include:

  1. Use of Registered Telecom Resources
    All business communications must originate from numbers or headers registered with the Telecom Regulatory Authority of India (TRAI) or Department of Telecommunications (DoT). This ensures transparency and allows consumers to easily identify the source of the call or message.
  2. Respect for DND Preferences
    Consumers registered on the DND list should not receive unsolicited calls, even if they have a business relationship with the caller. Ignoring consumer preferences or bypassing the DND registry will result in penalties under these guidelines.
  3. Explicit Consent for Each Brand
    Businesses must seek digital consent for each specific brand or service before initiating communications. For example, if a fintech company wishes to promote a product offered by a partner bank, they must obtain separate consent from the consumer for the bank's offerings.
  4. Broader Legal Framework
    The draft guidelines do not operate in isolation but are intended to complement existing regulations such as the Telecom Commercial Communications Customer Preference Regulations, 2018, and other laws governing commercial communications. The proposed guidelines will act as an additional layer of protection for consumers and provide more stringent rules for businesses and telemarketers.
  5. Penalties for Contravention
    Any violation of these guidelines will result in penalties as prescribed by the Consumer Protection Act, 2019. The guidelines have been designed to ensure compliance with the highest standards of consumer protection. In case of ambiguity or disputes in the interpretation of the guidelines, the decision of the Central Consumer Protection Authority (CCPA) will be final.

Conclusion

The draft guidelines on unwarranted business calls represent a robust effort by the Department of Consumer Affairs to curb the growing menace of unsolicited business communications. These guidelines, once enacted, will ensure that consumers' rights are protected, and businesses adhere to stricter standards for initiating promotional or service-based communications.

For businesses, telemarketers, and intermediaries, the new rules will require a re-evaluation of their current communication practices. Clear identification, explicit consent, and compliance with telecom regulations will become non-negotiable elements in engaging with consumers. With stricter penalties for violations, these guidelines aim to restore consumer trust and reduce the deluge of unsolicited calls and messages in the Indian market.

Footnotes

1. Available at: https://timesofindia.indiatimes.com/gadgets-news/more-than-65-of-indians-daily-receive-three-or-more-spam-calls-report/articleshow/107831949.cms

2. Available at: https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Guidelines%20for%20the%20Prevention%20and%20Regulation%20of%20Unsolicited%20and%20Unwarranted%20Business%20Communication%2C%202024.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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