Christopher Niebel and Gary McNeish, joint owners of marketing company Tetrus Telecoms, were fined a total of £440,000 for sending millions of unsolicited text messages for a three-year period, the ICO said on Wednesday.
It is the first time the ICO has used its power to issue a monetary penalty for a serious breach of the Privacy and Electronic Communications Regulations (PECR) since the powers were approved in January 2012.
An 18-month investigation found that the company was using unregistered pay-as-you-go SIM cards to send out as many as 840,000 illegal text messages a day from offices in Stockport and Birmingham.
The SIM cards were inserted into a machine that sent text messages to random phone numbers. Any numbers that replied to the messages were sold on as leads, netting the company an income of £7,000 to £8,000 per day.
The ICO said it became aware of the company’s activities after recieving intelligence in May 2011, and carried out raids on its Stockport premises, in August 2011, and the Manchester home of Niebel in February this year.
Niebel and McNeish were given 28 days to respond last month after the ICO issued two penalty notices concluding its investigation into the illegal activity. After hearing responses from the two owners and their representations, the ICO made the decision to issue the fines.
The ICO said the company, which it has connected to over 400 complaints about spam texts, was set up in 2009 and has made hundreds of thousands of pounds profit during the course of the three years.
Niebel has been ordered to pay a penalty of £300,000, the ICO said. McNeish, who has taken fewer profits out of the business, has been fined £140,000, it said.
Both owners are also facing prosecution from the ICO for failing to notify that Tetrust Telecoms was processing information, the regulator said, a legal requirement for organisations under the Data Protection Act.
The ICO said it is investigating and considering issueing monetary fines for breaching PECR to three other companies.
“The public have told us that they are distressed and annoyed by the constant bombardment of illegal texts and calls and we are currently cracking down on the companies responsible, using the full force of the law," said ICO commissioner Christopher Graham.
"In March we set up a survey on the ICO website so people can tell us about any unwanted texts and calls they have been receiving. So far we have received over 60,000 responses," Graham said.
"We know the majority of these messages and calls have been made by companies who try to remain anonymous in the hope they can profit by selling personal information to claims management companies and other marketing organisations. We are using the information provided by the public to identify those responsible," he said.