Npower and HomeServe face £2m Ofcom fines over silent phone calls

Ofcom has notified Npower and HomeServe that they have breached the Communications Act 2003 over silent phone calls, which were made repeatedly due to a glitch in call centre telephone systems.

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Ofcom has notified Npower and HomeServe that they have breached the Communications Act 2003 over silent phone calls, which were made repeatedly due to a glitch in call centre telephone systems.

Ofcom said that between 1 February 2011 and 21 March 2011, HomeServe and Npower were found to have misused an electronic communications network or services by using an automated calling system.

Both companies made an “excessive” number of abandoned calls during the period, and insurance and repair company HomeServe made one or more repeat calls to specific numbers within 24 hours even when a call had been identified by Answer Machine Detection (AMD) equipment as having been picked up by an answer machine.

The Answer Machine Detection technology, used by many call centres, can mistakenly indicate that a call has been picked up by an answer machine. In this situation, it drops the call, without directing it to a call centre agent, and the consumer hears a silent call.

Ofcom last year published the ’24 hour policy’ to ensure that consumers do not receive more than one silent call per day from the same business or person. The policy states that when a call has been identified by Answer Machine Detection equipment as being picked up by an answer machine, any repeat calls made to that specific number that day may only be made with the guaranteed presence of a live operator.

Npower, meanwhile, included marketing content within a recorded information message played in the event of an abandoned call.

HomeServe and Npower have until 10 August to respond to the points raised by Ofcom in the notification, and to take steps to stop their misuse of the communications network.

Ofcom will then consider if further action is required, including imposing a financial penalty of £2 million on each company.

In a statement, Npower said: “Our average abandon rate has been consistently below the regulatory 3%. Ofcom's concerns relate to individual non-consecutive days in which the rate exceeded this level.

“We believe that our prompt to make energy savings is fully consistent with energy policy and does not constitute marketing.”

HomeServe confirmed that one of its outsourced suppliers had breached the rules due to the use of Answer Machine Detection technology.

“This fact was uncovered by our own internal audit processes, verified by independent, external auditors and reported to Ofcom on 26 April. The problem resulted from the use of AMD technology, and was remedied immediately upon discovery.”

“AMD is no longer used on any HomeServe outbound calls, whether they originate in our own or in outsourced call centres,” the company said.

Companies that have been fined for silent calls include Ultimate Credit Services, which was fined £45,000 in 2009. Equidebt was fined £36,000 in 2008 for its use of automated calling systems, while Barclays was fined £50,0000 in 2008.