This is the blog of British investigative journalist Jason Lewis.
It features articles from my time as Investigations Editor of the Sunday Telegraph and Whitehall and Security Editor of the Mail on Sunday.
I specialise in writing on intelligence and security matters, human and civil rights and the activities of the British State.
Monday, 27 June 2011
Span text investigation 1
Spam texts: the firms behind the nuisance text messages about 'your accident'
Companies making money out of nuisance text messages to mobile phones are exposed in an investigation by The Sunday Telegraph.
One of the call centres responsible for sending out spam texts
The unwanted texts, promoting compensation claims for accidents or financial mis-selling, are at the centre of a growing industry estimated to be worth at least £175 million. Almost one in three mobile customers reported that they received at least one of the spam messages last month — a total of 12.75 million nuisance texts.
Our investigation established that those involved in the industry that surrounds them include legal firms, so-called “claims farmers” which gather compensation cases for lawyers, and shadowy communications companies which can be based in India or Eastern Europe.
The “spam” texts, sent from untraceable pay-as-you-go mobile numbers, entice unwitting consumers with promises of thousands of pounds in compensation from “no win, no fee” accident claims and mis-sold financial services.
The deluge of messages, which when sent without the receivers’ consent are classified as “cold calls” and are outlawed, is driven by the commission available from the trade in information on possible claimants.
Last night there were renewed calls for a ban on all so-called referral payments.
One senior lawyer said: “The idea that you can buy and sell access to justice in this way is abhorrent.” The practice is big business, with information passed to law firms that appear to ask few questions about where their new clients have come from.
The firms insist that they follow procedures to avoid using information gained from unsolicited messages and take steps to check that they are being supplied with contact details legitimately.
The Sunday Telegraph responded to a series of unsolicited texts to test how the systems worked.
After providing brief details of an accident, our undercover team’s details were passed to companies including the Accident Advice Helpline, one of the country’s leading claims firms which has television advertisements featuring Esther Rantzen, the former That’s Life presenter.
We were also referred to a firm of solicitors whose senior partners had previously been censured by the Solicitors Regulation Authority for making banned payments to middlemen and ordered to refund the victims of industrial injury who had lost out as a result.
Our investigator told one company that we had been “cold called” but was still put through to a compensation lawyer after being asked: “Did you ever opt into a survey or website?”
Research by the Direct Marketing Association (DMA), which wants tougher action on “spam” texts, shows around three per cent of people who receive one respond.
They believe this represents more than 500,000 people who are then contacted by a series of claims middlemen who decide whether they have a case before passing them on to lawyers, receiving fees of up to £500 a time. The research found that 30 per cent of adult mobile phone owners received an unsolicited SMS regarding accident claims, debt management or the mis-selling of personal protection insurance in the last month. Sending such unsolicited messages falls foul of tough new legislation which can see the firms involved prosecuted and fined up to £500,000.
However, the Information Commissioner’s Office (ICO), which oversees prosecutions, admits that bringing a successful action is difficult because mobile phone SIM cards used are unregistered and untraceable. Despite fears that such phones could be used by terrorists, pay as you go mobile phone SIMs can still be purchased for cash without proper identification.
Instead of prosecution, the ICO and phone companies, which also claim they are powerless to combat the practice, merely cut off the mobile phone number identified in the messages. The firms behind the texts need only to use a new unregistered SIM card to continue operating.
The lead generator firms sell on details of those who respond to their unsolicited texts. Even if they text “stop” in the belief that this will end the texts, their number can be sold to “lead generators” for around £5. They are then passed on to the claim managers or “claim farmers”, who contact the phone to see if they can produce a claim.
Mike Lordan, chief of operations for the DMA, said: “We’re concerned about the volume of SMS spam that’s being sent to UK mobile phone owners. Our research shows that a large percentage of people are receiving spam, are unsure how to stop it and don’t know who to make a complaint to. Mobile spam is causing distress to many people and seriously damaging the legitimate multi-million pound mobile marketing industry. Regulators have been unwilling or unable to take ownership and tackle this growing problem. It’s vital that they now decide between themselves who will take responsibility before it’s too late. We, the DMA, are ready to offer our expertise.”
Last night a spokesman for the Claims Management Regulator said it was in discussions with the Direct Marketing Association, Ofcom, the media regulator the ICO and the mobile phone companies about “further ways to clamp down on unsolicited texts from claims management firms”.
From India to Liverpool: How the system works
INDIAN NERVE CENTRE: Text messages are sent via computers – thought to be in India – to thousands of mobile phones inviting the recipients to make a compensation claim for an accident or financial mis-selling. They cost 2p to send. The numbers of those who respond are sold for £5 to UK firms.
UK CALL CENTRE: A “claims farmer” phones the mobile sent from India and asks about the 'claim’ and whether they agreed to be called. The British call centre takes down details of the claim and decides if the call is suitable to pass to lawyers, for which they are paid up to £500.
LETTER: Silverbeck Rymer draws up legal papers for our investigator. In normal claims an agent is sent to take a statement, obtain medical records and any other evidence of an accident. If the claim is successful the law firm will receive fees which could stretch to five figures.
LAW FIRM: A British legal firm — in our case Liverpool’s Silverbeck Rymer, run by (above, from left) Robert Fielding, James Rymer and Charles Rymer — contacts the person making the claim. They are paid commission when clients take out insurance to cover costs under no-win no fee arrangements.