Communications Act 2003 (Maximum Penalty for Persistent Misuse of Network or Service) Order 2006

The call centre overseas is presumably going to be contracted to somebody in the UK for the provision of services for the sale of a product. That is the link. It may not be perfect, but it is the UK market that people are seeking to get to—often, perhaps invariably, to UK products with a UK nexus—so there is a contract with a UK entity and Ofcom’s powers extend to that UK part. That is a way of getting into these offshore centres. A question was asked about why the Government propose to raise the penalty from £5,000 to £50,000 and not to a higher amount. Maximum penalties currently range from £5,000 for persistent misuse, including silent calls, to £250,000 for broadcasting offences and to 10 per cent of total turnover for breaches of the Competition Act 1998, of which Ofcom is the competent authority. The penalties are most severe where there is a major abuse of the market or incitement to criminal action, followed by where the public have been defrauded or grossly misled. At the lower end are penalties against actions that are harmful and offensive but do not involve direct financial harm. Therefore, a figure of £50,000 as a maximum penalty for silent calls is considered consistent with the Act’s overall framework and is proportionate. In the consultation to which the noble Lord referred, some feedback suggested significantly higher penalties. I do not have to hand the scale of the number of calls. I thought it was somewhere in my brief, but I cannot put my hands on it. If the noble Lord is interested, we could write to him on that. I was asked about how Ofcom will enforce the new rules. It will enforce them using the provisions in the Act that will encourage modification of company behaviour. It is necessary that that can be backed up with fines. The new set of rules is not related only to the pre-recorded message, although that is particularly important, but also to caller line identification which has to be provided, restrictions on further calls being redialled for at least 72 hours unless a dedicated agent is available, and the limit on abandoned call rates of 3 per cent of the total number of calls in any 24-hour period. That is an extensive suite of provisions. I was asked why we were raising the penalty in view of the fact that the current maximum penalty may not have been imposed extensively. Before it can impose a penalty, Ofcom has to give due and proper consideration to each case and follow a legal process set out in the Communications Act 2003. To date, Ofcom has issued notifications requiring companies, among other things, to reduce the number of abandoned calls and provide monthly reports on their performance. So far, the companies have complied with the notifications so consumer harm has ceased without the need for further Ofcom intervention. However, if the companies disregard the notifications at any time, action may be taken by Ofcom and penalties may be issued in respect of any persistent misuse or contravention. In addition, Ofcom felt that the maximum penalty of £5,000 was not sufficient for the potential level of harm and anxiety that silent calls cause customers. As we discussed earlier, it was not anticipated that this recent phenomenon would develop, and £5,000 did not amount to a real sanction or deterrent for the sort of entities that might be engaged in these practices. That is why the maximum penalty was increased.