Qire is a UK company which operates in the Interactive Voice Messaging (IVM) arena.

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1 Summary Qire is a UK company which operates in the Interactive Voice Messaging (IVM) arena. Qire s service is a software service which can make and receive phone calls and can interact with callers by understanding what callers say and by talking to callers in a natural human, or human-like voice. The service uses state-of-the-art speech recognition technology to understand what the consumer is saying and responds using high quality speech synthesis and an intelligent back end which makes conversations as human-like as possible. Ofcom s consultation appears to be based on the principle that most automated calling systems are used for outbound call steering and that this takes place in order to lower costs and circumvent silent call regulations. We believe that this is a fundamental misunderstanding of IVM services and technology and how it is being implemented in the UK and across the developed world. IVM technology in fact offers consumers substantial benefits whilst protecting their privacy rights, usually more securely than the live alternative. o IVM calls do not replace human calls. In the majority of cases they are used for calls which are in the consumer s interest, but which currently do not get made because the company lacks one or more of the resources, sufficient time or the guaranteed auditability of an IVM call. o Privacy is protected by IVM systems. Although Data Protection is fundamentally an issue for the Information Commissioner, IVM systems offer at least the same level of protection as a human call. The level of authentication required is purely a function of the sensitivity of the message and can be as rigorous as necessary. In fact, IVM offers potentially much greater levels of privacy and security than a call centre as all elements are automated, it can access more levels of secure data and protection can go as far as voice print technology which would allow only the call recipient to be verified. o The FSA and the Information Commissioner regulate the activity of the debt collection industry quite rigorously already, and any changes of a privacy or financial regulatory nature should come from those sources rather than Ofcom. o IVM technology is relatively new, and Ofcom s proposals risk closing down UK innovation and putting UK companies at a disadvantage to the rest of the world where such services are permitted and make these companies more effective.

2 o The technology involved in IVM includes real voice, test to speech, voice recognition, voice printing and is about extending services and information to consumers. The current Ofcom proposals risk cutting this growth industry off at the bud before consumers have become aware of the benefits of the service. o Most new technologies take time to bed in. Most consumers will never have received even one IVM message yet, and until more applications are rolled out those benefits will remain unknown. o The technology is self-regulating to the extent that consumers will always have the power not to listen or actively engage in the call content. Only if the call content is in some way either welcome or useful will outbound services survive including in the debt collection industry. o IVM calls offer an enhanced service to consumers when compared to predictive diallers in that they by their nature do not produce silent calls. o Interactive telephony services have been regulated as per other automated messaging technologies such as SMS and . This would make more sense as the platforms used for IVM are typically multi-service platforms, including SMS and and are used to select the most appropriate messaging technology for the service. There is no genuine reasn to discriminate against voice services in favour of other electronic services. o Technology is moving towards integration of voice with other services. Whilst this proposal covers services delivered via PSTN, voice messaging is being delivered via other services such as WAP, Skype, Instant Messenger, MMS messages and can be included in s. Ofcom should consider how these regulations will relate to voice elements included in what are today seen as discreet services. By creating rules which apply only to telephony, Ofcom is in danger of distorting the market against telephony-based technologies in favour of other IP based technologies.

3 Definition of Public Interest Within the realms of automated calling systems there are many types of call which can broadly be classified as public interest. Some are without any doubt a benefit to the public and can be a matter of life and death, in some circumstances. Examples of these would be;-- Crisis alerts where a customer is called to be warned of something which they need to know; a flood, tainted water service, a service interruption or product recall for example. Medical alert services whereby a patient or drug-taker is reminded to take a particular medicine at a particular time or else the treatment becomes ineffective; this type of messaging is becoming quite widely used and over 10 million users sign up for a similar service in the US run on the same software we use. Commercial messages in the public interest should also be relatively uncontroversial:- A customer service message from a catalogue retailer to let the customer know that a delivery may be late. This prevents customer frustration and allows them to plan accordingly. A message which lets a customer know that a service engineer will be arriving in 30 minutes. This type of service is very popular in the US as it allows the customer to leave the house on a delivery day, so long as they remain within 30 minutes drive, and so are not tied into staying in with no idea when the service engineer will arrive. Reminder services Reminders that a renewal is due for car insurance, for example, should be regarded as in the customer interest as the consequences of not knowing could be either that the customer is automatically renewed or that they risk running with no insurance whatsoever. Public sector reminders such as that Tax Returns or Car Insurance is due where failure to comply could be an offence. Where the public interest is less obvious is where the individual concerned may not consider the call to be in their immediate interest, but the message may be seen as in the overall interest of the caller and its other customers. It is into this arena where debt recovery, as discussed in the Consultation, falls. Even within debt recovery there are many applications which easily fall within the remit of public interest. These may be classified as optional reminder services:-

4 Where a customer is on a payment plan and may have a history of failed direct debits; a reminder that a DD is due on a forthcoming date can ensure that either sufficient cash is available or that the customer can discuss the situation and prevent the cost and inconvenience associated with a failed direct debit and prevent the customer from breaking their credit term agreements Automation of payments many people prefer a fully anonymous system to discussing their financial issues with a live operator which can be both inconvenient and embarrassing. Where a debt system offers the opportunity to make a payment, and is some more advanced cases, actually reconfigure the whole repayment profile, it can be seen as preferable to a live call With the actual chasing and collection of overdue debts you have a slightly different issue. It is surely to the benefit of all customers if a company can collect its rightfully due debt as fully and as efficiently as possible. Where this is not the case, then the companies other customers inevitably have to pay for the benefit of those who are delinquent payers. This need must be balanced with the need not to harass or otherwise intimidate call recipients. This balance can be achieved by the establishment of standards rather than by eliminating a technology which may well be preferred by the majority of call recipients; not to mention the benefit of those diligent people who do not get called because they pay on time. However, an automated solution is likely to be preferable for most people to a fully manual service. This is because an automated service allows them to choose how to respond to a call, and allows them to terminate a call without being rude or being caused embarrassment as can happen in a call with a live agent.

5 Debt Collection By Automated Telephony Debt collection offers a particular aspect of Interactive Voice Messaging which certainly does not contain marketing material, but where the call is going to be unwelcome, whether it is automated or not. The following should be considered:- Should a debt collection call be treated any differently whether it is an automated call or a human call? An automated call leaves the called party in control, An automated call leaves the consumer in control of the situation and unlikely to be put under the pressure and discomfort which can result from a live call. He has the option to respond to the call, prevent the call being put through, speak to a live operator or resolve the issue automatically through a fully automated resolution payment. An automated call is likely to be preferred by a substantial number of people, just as online banking, use of ATMs and other automated processing systems become more popular than human interaction. Is an automated system merely a way to save money? This is a major fallacy. In the tests Qire have carried out automated solutions are not significantly cheaper than using traditional dialler functionality. The costs of setting up, maintaining and additional call charges of most systems are comparable to the time saved in agent time. The main reason for using the systems are that the agents become more efficient and spend their time talking to people who have opted to talk to them, and are hence more likely to obtain a successful call resolution. Those people who would most likely either refuse to make an arrangement or would renege on one when put through are most likely not to opt to be transferred through to the call centre at all. Do automated solutions merely replace live operators? Automated solutions enable more people to be contacted By automating many of the processes (for example, allowing a debtor to make a fully automated payment) the collecting company can call more of its customers than would previously be possible, and can actively pursue lower account balances. This is in the interest of all parties as more debt is collected, less people are put in the position of being labelled delinquent, and potentially face CCJs and credit profile damage without ever having been contacted by a live agent. Companies do not have the resources to contact everyone Companies do not have the resources to contact everyone who they would lie to. This applies equally to customer service messages as to debt. The

6 traditional route has been to export UK jobs to low cost centres abroad where a higher proportion can be contacted for the same cost. The net result is a lower quality experience for people contacted, quality and management issues for the companies concerned and a decline in the number of UK call centre jobs. The integration of automated interactive processes means that the unskilled elements of a call o Is there anyone there o Is it the Right Party o Can we verify them o Do they want to discuss the issue o Would they like to resolve the issue automatically can be handled by the automated system, leaving the skilled agent to handle the sensitive and commercial elements of discussing the debt. Should outbound messages be treated differently from inbound? Automated handling of this sort of service has been long established on inbound IVR platforms. The major change over the last few years has been enabling companies to automated the outbound element.

7 What are the areas which can be regulated sensibly? All outbound calls, whether human or by interactive voice message have the potential to irritate if the timing or content are not to the liking of the recipient. This can be managed to the extent of managing the times in which people are called, but obviously not completely in all circumstances. We suggest the following areas could be regulated;- Time of call o Between 8am and 8pm or 9pm are reasonable periods where the recipient is likely to awake and available Frequency of call o Where a call has been answered by a human being, repeated calling could cause irritation Reasonable guidelines would include Human answer and call processed by a call centre agent Should not be called again unless the issue is unresolved Human answer and verified but not transferred Human answer not verified Answer Machine Engaged or no answer Wrong party 24 hours 24 hours Can call again to try to catch human, but do not leave another identical answer machine Re-Call permitted If wrong party gives call back time then call at that time. Otherwise leave 3 hours. o Identical messages IVM systems are intelligent enough to know the outcome of a previous call attempt. Subsequent messages should reflect the fact that the company is aware that this is the second attempt/an answer machine message has already been left. This overcomes the recipients feeling that he is being called repetitively without reason, and mimics the call routine that a live operator would have. o Availability of agents

8 An outbound call should be made on the assumption that an agent will be available to deal with it. Similarly to dialler systems, a maximum call waiting time of 15 secs should be applied. In the event that no agent can be found in that period, the subsequent message should tell the called party o They will not be called again for at least 24 hours o A number they can dial back in on (which should not be Premium Rate) o The name of the company making the call

9 International Experience Automated Calling has been most widely rolled out in the US. The FCC in the United States in December 1996 consulted in a very similar way to the current Ofcom consultation. (TSR Pre-recorded Call Prohibition and Call Abandonment Standard Modification, R411001). The outcome has been a regulatory regime where the practice is permitted, broadly within the standards Ofcom previously laid out in the Electronic Communications Act The Federal Communications Commission (FCC) has also issued on January 4, 2008, an order ruling that autodialed and pre-recorded message calls to wireless numbers provided by the called party in connection with an existing debt are permissible. The IVM industry has grown enormously over the last few years in the US market with companies such as Soundbite and TelMe sending more than 1billion messages per annum in the US. The industry in the UK is nascent in comparison, but is more technologically advanced than the US market at the same stage. To have differential regulations at this stage would handicap the UK market to the extent that it would never be able to compete with the US companies on an equal footing as the volumes and hence turnover available would be insufficient to allow enough investment in R&D to continue to compete effectively.

10 Ofcom s Consultation Questions Q1 Do you agree that the proposed changes make for a clearer set of rules that enable compliance to be achieved with a greater degree of certainty? We agree that greater clarity would be a good thing and would enable companies to understand what is acceptable or best practice. However, the current proposals would potentially, in fact, have several uninteneded consequences. The proposals do not distinguish sufficiently between intelligent interactive services and those that are effectively pre-recorded broadcasts, albeit with the option to transfer to a call centre. Q2. Do you agree with Ofcom s approach to determining whether the use of automated messages constitutes misuse? No. The current approach appears to take a view that if some people might object therefore the service should be a form of misuse. This view, if applied across the board, would ban all forms of communication where there is no prior written consent. The number of complaints regarding silent calls, for example, dwarfs that of automated messages, yet that service has not been banned, but regulated within acceptable practice. The same should apply with automated calls. Many consumers will prefer to have automated messages to live operators particularly in the collections industry where no call is welcome, but an automated call preserves the consumer s choice of action, while bringing to their attention the fact that an issue exists which need sot be addressed. Ofcom should look to regulate bad practice by limiting the number of calls per day that can be made to an individual, for example. There should not really be an opt-out in collections, because this does not apply to any other form of communication in these circumstances, including , SMS and telemarketing. Q3. Do you believe that it is possible to define objective criteria for applying the public interest test. Yes. Please see above. The public interest test could be defined as follows:- If the message or service can demonstrate a function which benefits consumers by providing them with information which can be considered to be either necessary or advantageous to the recipient, the sending organisation s customers as a whole or the general public outside the sender organisation then it is in the public interest.

11 This definition would encompass crisis-type alerts where the action of the recipient is required to help the wider public, such as the police or fire brigade, customer servicetype alerts and a tight definition of debt collection where the type of message must be to the benefit of the recipient and the company s wider user base. Q4. Do you believe that outbound call steering should only be used with customers who have given their prior consent? No. This applies well to marketing messages and is applied successfully in the Electronic Communications Act However, for most services an opt-in service will prevent most of those services from being launched because most services are not stand-alone new services but enhancements and improvements to existing services. To make it a requirement for a company to have a prior opt-in before being bale to deliver a customer service message for example is patently not going to happen. It cannot be anticipated and the customer relationship is already in place.making the service opt-in is akin to banning it altogether except for new services. An opt-out service makes some sense, although with key reservations. A company should be able to make being able to send interactive messages a compulsory element of a service, if the service would be made impossible or impaired without it. Companies should have the right to attempt to contact their customers where a breach of terms and conditions has taken place. The current definition of a customer in the EC2003 Act seems to work quite well already. Q5. Do you agree with Ofcom s clarification that the exploitation of all types of revenue-sharing numbers represents a form of misuse? Yes