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Wednesday, 28 October 2009

The 2009/10 BIS Consultation - My counter proposal

The BIS consultation (launched on Friday 23 October) has today (28 October) been published. Responses are requested by 25 January 2010.

I oppose the simple granting of an increase to the maximum penalty that Ofcom may impose on those practising "persistent misuse" (making Silent and "abandoned" telephone calls). Ofcom needs to review its relevant policy and practice, making appropriate changes in the respects listed below.

An undertaking to this effect should be necessary for parliament to once again grant an increase. Ofcom admits to having failed to discharge the duty placed upon it by parliament when the previous increase was granted in April 2006 - "We expect you to use your powers to eradicate the nuisance of Silent Calls".

Ofcom has used the increased penalty against some companies who have not been found to have made a single Silent Call. It has used the powers wrongly and sparingly. It has not identified any Silent Caller since October 2008, nor commenced any formal investigation since April 2007. The last time that complaints to Ofcom about Silent Calls led to use of the powers was in April 2006.

A lot of fuss and a bigger penalty must not again be used as an alternative to taking effective action. Ofcom must now change the way in which it uses its powers in the following respects:

1.      To address the issue of "Silent Calls".

All of the action so far reflects the stated primary policy objective, which is to keep the percentage of so-called "abandoned calls" (which may or may not be "Silent") below 3% of the total made on any "campaign". Some of those penalised so far have exceeded this limit, but have not been found to have made a single Silent Call. Those who remain within this percentage limit, regardless of the number of Silent Calls made, have escaped action.

This nonsensical approach must be halted.

2.     To use its powers in the way intended by the relevant legislation.

The powers do not enable the imposition of general regulations covering contact centres. They only enable proportionate action to be taken, starting with a formal Notification once Ofcom has sufficient evidence of "misuse of the telephone network". Ofcom wrongly defines this as only occurring when it considers it worthwhile to take serious action (i.e. the imposition of a serious penalty).

The powers are designed to support a progressive and proportionate approach to every case of persistent misuse. A Notification may be followed by the imposition of an enforceable requirement to cease the activity, which may then lead to the imposition of penalties in the event of a breach.

Ofcom prefers to use the option to impose a penalty at the first stage, on the basis of the misuse practised before action is taken.

3.     To act, using the powers it has, to prevent Silent Calls from being made, not to simply penalise some in the hope that others will be deterred by the threat of similar action against themselves.

Noting that no action is taken against those who do not exceed the 3% limit will mean that those who stay within it will not be in any way deterred, whatever the level of penalty.

There is little evidence of the penalties actually imposed serving as a deterrent. Misuse by companies as large as Abbey and Carphone Warehouse did not warrant use of the existing maximum. Smaller companies would expect the penalties to be proportionate, as they are required to be, and so would have little fear of £2M.

There is no company presently subject to an enforceable requirement to cease making Silent Calls, which Ofcom has been unable to enforce, due to the limit on the size of the penalty. If Ofcom was unable to prevent Silent Calls being made by this method, it would have the option of seeking an injunction so that the misuse would be subject to criminal sanctions in the event of continuing to disregard an order to stop making Silent Calls.

4.     To cease trying to be the regulator of the contact centre industry.

Ofcom is by nature a regulator, working closely with a defined industry, setting and maintaining standards, so that consumers may benefit from fair competition. It tries to follow this same approach in addressing the issue of Silent Calls. This is ineffective and improper for two reasons.

a)     Ofcom has no powers or duty to regulate the contact centre industry, nor to promote competition amongst those who are its clients,

Codes of practice and self-regulation within the industry may be helpful in preventing persistent misuse; however Ofcom has no need to get involved in such matters and certainly not to set standards.

b)     Silent Calls must be "eradicated", wherever possible, not regulated.

Every Silent Call is simply a misuse of the telephone network. Those who are persistent in the practice of failing to announce themselves when making telephone calls should simply be required to cease that practice.

There are other relevant issues of public concern, which Ofcom seeks to address within the scope of the same policy. Broadening the focus of Ofcom's intervention simply makes its attention to the primary issue, indeed the only one truly relevant to the powers, inadequate.

I seek to encourage all those who are to respond to the BIS consultation to consider these points and to make appropriate representations.

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