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HomeServe fined £750,000 for silent and abandoned calls

April 19, 2012

Ofcom today fined international home insurance and repairs company HomeServe £750,000 for making an excessive number of silent and abandoned calls to UK consumers.

Ofcom opened an investigation into HomeServe last year as part of its monitoring and enforcement programme aimed at reducing harm caused to consumers by silent and abandoned calls.

Silent calls and abandoned calls

Silent and abandoned calls, which can cause annoyance, inconvenience or anxiety for those that receive them, may be generated by automated systems known as diallers and answer machine detection (AMD) technology.

Dialler systems are mainly used in call centres. They automatically dial telephone numbers and connect the consumer to agents as soon as the phone is answered. AMD technology disconnects calls made to answer machines before they are put through to call centre agents, which can make call centres more efficient.

But problems sometimes occur, for example, when dialler systems generate more calls than are answered by call centre agents. Also, AMD technology can end a call when a person has answered because it mistakenly identifies the call as being picked up by an answer machine.

Ofcom investigation

Under Ofcom’s rules, there is a limit on the number of abandoned calls that companies are permitted to make to consumers. Ofcom’s investigation into HomeServe found that the company exceeded this abandoned call rate on 42 separate occasions during the period 1 February and 21 March 2011. This resulted in estimated 14,756 abandoned calls being made to consumers.

Ofcom rules also prohibit companies from making repeat calls to specific numbers within the same 24 hour period, where a call has been identified by AMD technology as having been picked up by an answer machine. Ofcom found that HomeServe made estimated 36,218 calls in breach of this rule.

In reaching its decision, Ofcom took account of a number of factors including, the steps taken by HomeServe to bring itself into compliance with the rules on silent and abandoned calls, and its offer to compensate consumers who suffered harm from receiving silent and abandoned calls as a result of its breach of the rules.

Ofcom has today decided that it is appropriate and proportionate to impose a financial penalty on HomeServe to reflect the seriousness of their breach, and to act as a deterrent to them and other companies who must comply with the rules.

Financial penalty

The fine is payable to Ofcom and passed on to HM Treasury. HomeServe is required to pay it within 30 days of receiving the penalty notification.

Ofcom’s Consumer Group Director, Claudio Pollack, said: “Our rules are there to prevent consumers suffering annoyance, inconvenience or anxiety from silent or abandoned calls.  We hope today’s fine will send a strong message to all companies that use call centres that they need to ensure they are fully compliant with the rules or face the consequences.”

Further details about the investigation can be found here.

ENDS

NOTES FOR EDITORS

1. Section 130 of the Communications Act 2003 gives Ofcom the power to impose financial penalties on parties found to have persistently misused an electronic communications network or electronic communications services.

2. In September 2010, Parliament approved an increase in the maximum financial penalty available to Ofcom to use to combat silent and abandoned calls, from £50,000 to £2m. This is the first time that Ofcom has imposed a fine on a company for silent or abandoned calls since the introduction of the revised maximum penalty.

3. Under Ofcom’s rules, the number of abandoned calls that companies make to consumers per day is not allowed to exceed 3 per cent of the total live calls make on that day.

4. Ofcom has an ongoing monitoring and enforcement programme that seeks to address consumer harm from silent and abandoned calls. Where informal enforcement action is not effective, Ofcom proceeds to an investigation and notification and/or fine. This has resulted in action against nine companies to date resulting in financial penalties.

5. HomeServe has established a dedicated helpline for consumers seeking compensation if they have been affected by silent or abandoned calls made by the company. The phone number is 0800 389 5280. HomeServe will offer £10 to claimants where their telephone number matches HomeServe’s records of those contacted while they were using AMD technology. Information on how to make a claim can be found on the HomeServe website at: http://www.homeserve.com/about/ofcom-statement

6. Ofcom’s consumer advice on how to avoid silent calls can be found here.

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