Friday, 19 April 2013

Ofcom fine Talk Talk £750000 for silent calls


Ofcom has fined TalkTalk £750,000 for making an excessive number of abandoned and silent calls to potential TalkTalk customers during 2011 through two of its call centre operators.1

The penalty follows an investigation as part of Ofcom’s monitoring and enforcement programme which is aimed at reducing harm caused by abandoned and silent calls.

Abandoned and silent calls occur when a call is made and the phone is answered at which point the caller hangs up the call. Ofcom’s policy on abandoned calls is that the abandoned call must include a message giving the following information:

· Who has called
· How you can opt out of future contact on sales calls

A silent call is where this message is not played and this can be caused by a number of factors which can include how agents handle calls or the use of technologies that detect the presence of answering machines (AMD). Ofcom’s guidelines set out an abandoned call rate formula which provides that abandoned call rates should be no more than 3% of live calls per a campaign or per call centre over a 24 hour period.

Ofcom derives the power to impose financial penalties on parties that have persistently misused an electronic communications network or electronic communications service from section 130 of the Communications Act 2003.

During Ofcom’s investigation they found that during one of Talk Talks campaigns that they exceeded the limit by a substantial amount on four separate occasions between 1st February 2011 and the 21 March 2011. They also failed to ensure that information messages were played and as a result Talk Talk made approximately 9000 silent and abandoned calls.

During a separate campaign Talk Talk did not adequately follow Ofcom’s policy to ensure that when using AMD technology to make calls to consumers it created a reasoned estimate of the accuracy of the technology and failed to keep adequate records to demonstrate its compliance with the policy

For the full release please click here to visit Ofcom.

Friday, 5 April 2013

Telecoms Contracts - Beware the *FREE* gift!

Telecoms Contracts - Beware the *FREE* gift!

It’s always a sad moment when doing a telecoms audit to discover that the client,  invariably disappointed with the service they are currently receiving, has signed into a 5 year contract for their telecoms, and they have 3 ½ years to go!

Further investigation typically reveals that the incentive for this 5 year tie-in was a free line install! Now this can be a massive carrot and seem like a big money-saver on setting up a business, however, I want to share with you an audit I have just completed which would indicate that this particular carrot is not that easy to swallow!

The offer is a simple one. You get a free line installation and get put on “our best business call plan” with inclusive FREE minutes. That seems like a great deal doesn’t it?

The problem with bundled packages, free installs and massive length contracts is that they are not fair to the customer in so many ways.  The supplier of this offer knows full well what their financial risk and reward is going to be, the end user is oblivious and is making the decision trusting that the information presented to them is providing great value, not knowing what to ask or look out for.  

The Package under Audit:

Free Line Installation, Inclusive Call Bundles and Business Plan for non-bundled calls, all wrapped up in a 5 Year contract.

The Costs:

Description
Qtr Rental
Comments
Analogue Line
£54.15
Q6 of 5 Year contract
ISDN Digital System 2 Ch
£169.61
Q6 of 5 Year contract
ISDN Digital System 2 Ch inc package
£231.36
Q6 of 5 Year contract
ISDN Digital System 2 Ch
£168.36
Q6 of 5 Year contract
ISDN Digital System 2 Ch inc package
£231.36
Q6 of 5 Year contract
Call Charges for Out of bundle calls
£127.38
Q6 of 5 Year contract
Total Quarterly Cost
£982.22


The Perceived “Benefits”:

Analogue Line Installation
£ 112 each x 1
£112
ISDN Digital System 2Ch Installation
£ 320 each x 4
£1,280
Total “FREE” benefits   

   £1,504*
           
* Benefits are based upon the supplier pricing these installations

Is it as good as it looks?

So looking good so far? Let’s look at a competitive non free installation; no free minutes included package 12 month agreements to see where value is being delivered.

Upfront costs

Analogue Line Installation
£   80 each x 1
£80
ISDN Digital System 2Ch Installation
£ 150 each x 4
£600
Total “FREE” benefits   

   £680*

The Costs:

Description
Monthly Charges
Qtr Equivalent
Analogue Line
£      11.50
£         34.50
ISDN digital System 2 Ch
£      23.60
£         70.80
ISDN digital System 2 Ch
£      23.00
£         69.00
ISDN digital System 2 Ch
£      23.00
£         69.00
ISDN digital System 2 Ch
£      23.00
£         69.00
All Call Charges*
£      95.58
£      286.74



Total Costs
£    199.68
£      599.04

*Call charges do not include any free or bundled calls and can be seen to be more expensive than the Free bundle minutes.

What does this mean?
The above costs show that the supplier providing a Free installation is inflating the costs of the installation to encourage the 5 year contract so that the perceived saving is significant to seem worth entering into a 5 year agreement.

What is obvious is that the 5 Year Contract with Free stuff becomes more expensive at month 4 compared to the competitive offer and that by the end of the 5 year contract they will have paid in this instance £ 6,983.60 more than they should, a massive 36% more than a competitive tariff and installation.

Buyer, beware!