Ofcom has power under the Communications Act 2003 to impose penalties for persistent misuse of electronic communications networks. The recent increase in the maximum was accompanied by a revised Ofcom enforcement policy Statement. Stephen Groom dials in and (hopefully) makes a connection.
Topic: Telemarketing
Who: H.M. Government and Ofcom
When: 25 September 2010
Where: London
Law stated as at: 30 September 2010
What happened:
For the second time in five years, potential fines for silent call abuse and other misuse of electronic communications networks exponentially increased.
This was thanks to the coming into force on 25 September 2010 of the Communications Act 2003 (Maximum Penalty for Persistent Misuse of Network or Service) Order 2010 ("2010 Order").
Section 128 (1) of the Communications Act 2003 empowers Ofcom to serve a "notification" on any person whom it has reasonable grounds for believing "has persistently misused an electronic communications network or electronic communications services."
Section 130 (1) provides that Ofcom may impose a financial penalty where a person has been served with a notification under s. 128, that person has been allowed an opportunity to make representations and the period allowed for making such representations has expired.
Section 130 (4) states that the fine levied under s. 130 (1) shall be such amount, not exceeding the amount specified from time to time, as Ofcom determines to be (a) appropriate and (b) proportionate to the misuse in respect of which it is imposed.
The new 2010 Order has now increased the specified maximum from £50,000 to £2 million.
As with the previous increase from £5,000, the change has not been driven by spam (which could theoretically come within these provisions of the Communications Act) but by growing concern over excessive numbers of silent and abandoned calls.
Revised Statement of Policy
To accompany the increase, Ofcom published the results of a consultation it conducted into potential changes to its "Statement of Policy" about how it exercises its powers to police "persistent misuse".
The results report also includes the revised, 2010 version of the Statement of Policy which is of immediate effect.
Amongst the changes to the Statement of Policy are:
- clarification of how call centres should calculate the number of calls they abandon;
- finalised policy on when an information message needs to start playing in the event of an abandoned call;
- requiring call centres to include certain phone numbers in the information message played in the event of an abandoned call;
- a clear indication that abandoned and silent calls are just two examples of "persistent misuse" that call centres may be responsible and that Ofcom may exercise its powers also against failure to present calling line identification or making unsolicited marketing calls which do not include live speech.
Two changes not made despite representations were making "service" calls as opposed to marketing calls exempt and exempting B2B calls.
Why this matters:
Silent and abandoned calls occur when telemarketers use automated dialling equipment. The call is made, the call recipient picks up the phone, but there is no-one on the other end of the line because contact centre systems fail to ensure that someone is available to respond.
This can cause considerable anxiety, annoyance and distress.
The practice has precipitated complaints for several years, Ofcom has issued warnings, made policy statements and taken action against nine companies to date including Barclaycard, who were fined the (then) maximum £50,000 almost exactly two years ago in September 2008.
Despite this, the situation has worsened rather than improved, hence another ratcheting up of the maximum penalty. Time will tell whether this will finally bring under control what has been a scourge for responsible telemarketers and has led to nearly a majority of UK land lines being registered with the Telephone Preference Service.
Ofcom's announcement welcoming the increased cap is here.
The Ofcom statement about its Revised Statement of Policy, including the revised Statement itself, is here.
