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Home > Competition and Consumer Bulletin > Competition and Consumer Bulletin > Open Cases > All Open Cases > CW/00905/06/06


Own-initiative investigation: Monitoring and enforcement of rules preventing annoyance caused to consumers by silent and abandoned calls

Complainant: Ofcom own-initiative investigation
Investigation against: Persons or organisations causing annoyance to consumers through the making of silent or abandoned calls
Case opened: 22 June 2006
Issue: Persistent misuse of electronic communications network(s) or service(s)
Relevant instrument: Sections 128 to 131 of the Communications Act 2003

Update note – 26 September 2008

Ofcom has imposed the maximum statutory financial penalty on Barclays Bank plc trading as Barclaycard (“Barclaycard”) for persistent misuse of an electronic communications network or services by virtue of its use of automated calling systems. The penalty has been imposed under section 130 of the Communications Act 2003 (the “Act”) and is £50,000. This action follows the notification which was issued to Barclaycard on 20 June 2008 (see link below).

A non-confidential version of the section 130 notice is being prepared and will be published shortly.

End of update note

Update note – 6 August 2008

Ofcom has issued a notification to Ultimate Credit Services Ltd (“UCS”), under section 128 of the Communications Act 2003 (the “Act”) as part of this ongoing own-initiative investigation. The notification sets out that Ofcom has reasonable grounds for believing that between 1 October 2006 and 30 April 2007, UCS persistently misused an electronic communications network or services by virtue of its use of an automated calling system.

The notification gives UCS until 12 September 2008 to make representations to Ofcom regarding the matters raised in the notification, and to take steps to cease the misuse identified.

After this date Ofcom will consider what further action is appropriate, including whether to impose a financial penalty under section 130 of the Act.

A non-confidential version of the notification is currently being prepared and will be published shortly.

End of update note

Update note – 10 July 2008

Ofcom has today published a non-confidential version of the notification issued to Barclaycard on 20 June 2008, under section 128 of the Communications Act 2003.

The document can be found at the link at the bottom of this entry.

End of update note

Update note – 23 June 2008

Ofcom has issued a notification to Barclays Bank plc, trading as Barclaycard (“Barclaycard”), under section 128 of the Communications Act 2003 (the “Act”) as part of this ongoing own-initiative investigation. The notification sets out that Ofcom has reasonable grounds for believing that between 1 October 2006 and 10 May 2007, Barclaycard persistently misused an electronic communications network or services by virtue of its use of automated calling systems.

The notification gives Barclaycard until 21 July 2008 to make representations to Ofcom regarding the matters raised in the notification, and to take steps to cease the misuse identified.

After this date Ofcom will consider what further action is appropriate, including whether to impose a financial penalty under section 130 of the Act.

A non-confidential version of the notification is currently being prepared and will be published shortly.

In addition, Ofcom has extended this programme of monitoring and enforcement for a further six months.

End of update note

Update note – 14 April 2008

Ofcom has today published non-confidential versions of the Penalty Notices issued to Complete Credit Management Limited and Abbey National plc on 19 March 2008, under section 130 of the Communications Act 2003 (the “Act”).

These documents can be found at the links at the bottom of this entry.

Update note – 20 March 2008

Ofcom has imposed financial penalties on Abbey National plc (“Abbey”) and Complete Credit Management Limited (“CCM”) under section 130 of the Communications Act 2003 (the “Act”). This action follows notifications issued to both companies on 29 November 2007 for contravening section 128 of the Act by making an excessive number of abandoned calls (see related items).

The maximum financial penalty Ofcom can impose under section 130 of the Act is £50,000. The levels of the penalties which have been imposed in these cases are as follows:

In the notifications of 29 November 2007 Ofcom set out its findings that there were reasonable grounds to believe that between October 2006 and April 2007, both Abbey and CCM had repeatedly exceeded the abandoned call rate set out in Ofcom’s statement of policy on the persistent misuse of an electronic communications network or service, published on 1 March 2006 (the “Guidelines”); that is no more than 3% of live calls on each individual campaign over any 24 hour period.

Abbey and CCM were given until 7 January 2008 to make representations in relation to the matters set out in the notifications. Ofcom has decided to impose a penalty on both companies having applied the relevant legal framework and having carefully considered the representations made.

Non confidential versions of the section 130 notices are being prepared and will be published shortly.

Update note – 18 December 2007

Ofcom has decided to extend this programme of monitoring and enforcement for a further six months.

During this period Ofcom will continue to monitor silent and abandoned call data and investigate whether particular users of automated calling systems are complying with the requirements of the revised statement of policy on the persistent misuse of an electronic communications network or service, published on 1 March 2006 (the “Guidelines”).

On 17 December 2007 Ofcom published a consultation document proposing clarifications to detailed aspects of the requirements set out in the Guidelines (see related item).

Non-confidential versions of the notifications issued to Abbey National plc and Complete Credit Management Ltd under section 128 of the Act on 29 November 2007 have now been prepared, and can be found at the link below.

End of update note

Update note - 4 December 2007

Ofcom has issued notifications to two companies under section 128 of the Communications Act 2003 (the “Act”) as part of its ongoing own-initiative investigation to address the problem of silent and abandoned calls.

Notifications have been issued to:

Ofcom’s revised statement of policy (the “Guidelines”), issued on 1 March 2006, set a number of requirements for call centres and other automated calling systems users including:

Evidence gathered in Ofcom's investigation reveals that:

Ofcom has therefore concluded that there are reasonable grounds to believe that each of these two companies has engaged in persistent misuse of an electronic communications network or electronic communication services in a way that causes annoyance, inconvenience or anxiety to consumers within the meaning of sections 128(5)(a) and 128(6)(a) of the Act.

The notifications give each company until 7 January 2008 to make representations to Ofcom regarding the matters raised in the notification, which may include any steps taken to cease the misuse identified.

After this date Ofcom will consider what further action is appropriate, including whether to impose a financial penalty under section 130 of the Act. The maximum penalty that may be imposed under section 130 of the Act is £50,000 per contravention.

Non-confidential versions of the notifications are currently being prepared and will be published shortly.

End of update note

Update note – 20 June 2007

The problem of silent and abandoned calls remains a priority for Ofcom, and Ofcom has therefore decided to extend its programme of monitoring and enforcement for a further six months.

In this period Ofcom will continue to monitor abandoned call data and investigate whether particular users of automated calling systems are complying with the requirements of the revised statement of policy on the persistent misuse of an electronic communications network or service, published on 1 March 2006.

End of update note

Update note- 23 April 2007

Ofcom has today published the non-confidential versions of the Penalty Notices issued under Section 130 of the Communications Act 2003 to the following companies:

Space Kitchens
Bracken Bay Kitchens
Carphone Warehouse
Toucan

On 29 March 2007 Bracken Bay Kitchens lodged an appeal with the Competition Appeals Tribunal (CAT) against the Penalty Notice issued on 30 January 2007. Details of this appeal (Case Reference: 1079/3/3/07) can be found on the CAT web site: http://www.catribunal.org.uk/current/default.asp

End of update note

Update note – 30 January 2007

Ofcom has today imposed financial penalties on four companies under section 130 of the Communications Act 2003 (the “Act”). Penalty notices have been issued to Bracken Bay Kitchens Ltd, Space Kitchens and Bedrooms Ltd, Toucan Residential Ltd (formerly IDT Direct Ltd) and Carphone Warehouse plc, for contravening section 128 of Act by making an excessive amount of silent or abandoned calls.

Silent calls can occur when automated calling systems used by call centres generate more calls than the available call centre agents can manage. When the person called answers the telephone and there is no agent available, the automated calling system abandons the call. This can result in the person called experiencing silence on the line when they answer the telephone.

Ofcom has imposed the following penalties:

Space Kitchens £45,000
Bracken Bay Kitchens £40,000
Carphone Warehouse £35,000
Toucan £32,500

The penalty notices have been issued following the four notifications of misuse of networks and services that Ofcom issued to these companies on 3 November 2006 (the “Notifications”). In the Notifications, Ofcom set out its findings that there were reasonable grounds to believe that each of these companies has engaged in persistent misuse of an electronic communications network or electronic communication services in a way that causes annoyance, inconvenience or anxiety to consumers. This conduct contravenes section 128(5)(a) and section 128(6)(a) of the Act.

Ofcom's investigation found that some or all of these four companies had:

The companies were given until 6 December 2006 to make representations in relation to the matters set out in the Notifications. Ofcom has now considered representations by each of the companies and has decided to issue a financial penalty in each case.

The maximum financial penalty Ofcom can impose under section 130 of the Act is £50,000 per notification. In each of these four cases, Ofcom has imposed a penalty taking into account Ofcom's statement of general policy for determining penalties* and specifically considering:

Further details of Ofcom's consideration of the representations and factors to determine the penalties are included in the section 130 notices issued to each company, non confidential versions of which are being prepared and will be published on the Ofcom web site shortly.

*For Ofcom penalty guidelines see: http://www.ofcom.org.uk/about/accoun/pg/

End of update note

Update note – 12 December 2006

Addressing the problem of silent calls continues to be a priority for Ofcom, therefore Ofcom will extend the current programme of monitoring and enforcement for a further six months.

During this period Ofcom will continue to gather evidence of automated calling systems (ACS) use from stakeholders. Once Ofcom has assessed the information supplied, if appropriate, Ofcom will then take any enforcement action necessary against any company found to be contravening the revised statement of policy (the “Guidelines”) and making excessive numbers of silent and abandoned calls.

Non-confidential versions of the notifications issued to Carphone Warehouse Group plc, Bracken Bay Kitchens Ltd, Space Kitchens Ltd and IDT Direct Ltd (trading as Toucan) under section 128 of the Act on 3 November 2006 have now been prepared and can be found at the link below.

End of update note

Update note - 3 November 2006

Ofcom has issued notifications to four companies as part of its ongoing own-initiative investigation to address the problem of silent calls.

Silent calls can occur when automated calling systems used by call centres generate more calls than the available call centre agents can manage. When the person called answers the telephone and there is no agent available, the automated calling system abandons the call. This can result in the person called experiencing silence on the line when they answer the telephone.

From 1 March 2006, Ofcom issued a revised statement of policy (the “Guidelines”) stating that any abandoned calls should be accompanied by a recorded information message explaining why the call has occurred and preventing silence on the line. The Guidelines also provide that abandoned call rates should not exceed three per cent of all calls made in any 24 hour period for each campaign.

Notifications have been issued under section 128 of the Act to:

Applying the principles set out in the Guidelines, evidence gathered in Ofcom's investigation reveals that each of these four companies have:

Ofcom has therefore concluded therefore that there are reasonable grounds to believe that each of these four companies have engaged in persistent misuse of an electronic communications network or electronic communication services in a way that causes annoyance, inconvenience or anxiety to consumers. This conduct contravenes section 128(5)(a) and section 128(6)(a) of the Communications Act 2003 ('the Act').

The notifications give each of the four companies until 6 December 2006 to make representations to Ofcom regarding the matters raised in the notification. After this date Ofcom will consider what further action is appropriate.

At this point Ofcom will decide in the case of each company whether to impose a financial penalty under section 130 of the Act. The maximum penalty that may be imposed under section 130 of the Act is £50,000 per contravention.[(-1-)]

Non-confidential versions of the notifications are currently being prepared and will be published shortly.

Representations concerning these notifications

The companies each have until 6 December 2006 to make representations to Ofcom about the matters set out in the notification issued to it.

End of update note

Update note - 5 October 2006

Ofcom has now completed an initial information gathering process and has gathered evidence from a number of different organisations who manufacture and use automated calling systems (ACS ).

Ofcom is currently analysing this evidence in order to assess whether it is appropriate to issue notifications to certain organisations under Section 128 of the Act. Where Ofcom has reasonable grounds to believe that an organisation has engaged in persistent misuse, then it will proceed to issue a notification and announce that it has done so on the Competition Bulletin. A further update will be published shortly.

End of update note

Ofcom has opened an own-initiative programme of enforcement to investigate compliance of organisations using automated calling systems with the principles set out in Ofcom's revised policy, introduced earlier this year, to address the problem of silent calls.

Since the introduction of these new rules, Ofcom has been closely monitoring levels of complaints to Ofcom's Contact Centre regarding silent calls. This monitoring has indicated that there may be some organisations failing to fully comply with these new rules.

As the first stage of this programme of active enforcement, Ofcom will gather evidence from a range of stakeholders in order to formally assess the level of compliance with the new rules. This will include information gathered using Ofcom's powers under the Communications Act from communications providers' nuisance calls bureaux, as well as evidence gathered directly from organisations who use or provide automated calling systems.

Assessing this range of data will enable Ofcom to identify those organisations causing most concern in terms of silent and abandoned calls and, accordingly, where to focus the next phase of this programme of enforcement. This second stage will involve detailed investigation of specific organisations alleged in complaints, or suggested by evidence gathered, to be generating silent and abandoned calls in a manner which constitutes persistent misuse of an electronic communications network or service, contrary to Ofcom's revised policy.

Where Ofcom investigates a specific organisation under this programme of enforcement, details will be announced via this Competition Bulletin. Ofcom will respond swiftly and effectively to resolve any persistent misuse under Section 128 of the Communications Act.

Background

Silent calls occur when automated calling systems used by call centres for telemarketing, market research, debt collection and other purposes, generate more calls than the available call centre agents can manage. When the person dialled answers the telephone, there is no agent available, resulting in silence on the line, because the automated calling system has ended the call.

Sections 128 to 130 of the Communications Act 2003 (“the Act”) gives Ofcom the power to take action against persons or companies who persistently misuse an electronic communications network(s) or service(s) in any way that causes or is likely to cause unnecessary annoyance, inconvenience or anxiety.

On 1 March 2006 Ofcom published a revised statement of policy on the persistent misuse of an electronic communications network or service, with new measures designed to take action against silent calls (see Related Items).

Ofcom's statement set out a number of requirements for organisations using automated calling systems, including the need to carry a recorded information message which identifies the source of the call and to include Calling Line Identification which allows people to dial 1471 and access the telephone number of the person or organisation calling them.

The Government has increased the maximum penalty that Ofcom can impose on organisations that breach Sections 128 to 130 of the Act from £5,000 to £50,000.

Case Leader: Matthew Peake (020 7783 4160 e-mail: matthew.peake@ofcom.org.uk)
Case Reference: CW/00905/06/06

Footnotes:

1.- See section 130(4) of the Act, as amended by the Communications Act 2003 (Maximum Penalty for Persistent Misuse of Network or Service) Order 2006, SI 2006/1032.



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