Simon Read: Silent telephone calls? Fine should persuade firms to cut them out

Silent calls are a real menace. They can frighten people, especially those who live on their own. But they are also really annoying. I can't be alone in having rushed to answer a ringing phone only to be left fuming when there's no one there.

It happens because companies which flog stuff over the phone use computers to dial lots of numbers automatically. The first person to answer their phone gets the pushy salesperson from the call centre. The rest of us get the silent treatment.

Regulators have cracked down on the practice, although they've sadly failed to outlaw it altogether. But there are now limits on the number of abandoned calls that companies are allowed to make to consumers.

And, pleasingly, the telecoms regulator, Ofcom, has started getting tough with firms that flout the limits. Homeserve – which sells domestic insurance, such as breakdown cover – has just been fined a record £750,000 for breaking the rules. The company exceeded the limit on 42 occasions in February and March 2011, leading to an estimated 14,756 abandoned or silent calls.

The rules also prohibit firms from making repeated calls to numbers where a call has been picked up by an answer machine. However, HomeServe made an estimated 36,218 calls in breach of this rule.

The company got into huge trouble last year about concerns of product mis-selling, after which it was forced to suspend all its telephone sales and marketing activity. But this week's fine is less about punishing Homeserve further and more about sending out a warning to other firms that use computers to make multiple sales calls at the same time.

I trust Ofcom will slap fines on any other firms that overstep the mark and cause distress to thousands of folk.

The campaign to end legal loan sharks is taking the argument back to Parliament next week. On Tuesday, Co-operative Labour MP Stella Creasey tabled an amendment to the Financial Services Bill which is due to be read on Monday 23 April. If adopted, the amendment would give regulators powers to tackle the problems caused by legal loan sharking by capping the charges that firms can make for credit.

"Capping their charges could send a strong signal about what costs of credit will be tolerated in the UK," Stella said. "It's the first step towards securing industry-wide caps on the total costs of credit, and so giving British consumers the same protection from these loans that others around the world enjoy."

The proposal is important as it could – at a stroke – outlaw the unpleasant practice of some lenders of pushing people into a spiral of debt by adding interest on interest and charges upon charges.

It won't stop lenders charging outrageous interest rates – some short-term finance firms charge up to 4,000 per cent APR, for instance! But it will stop them adding more and more to a debtor's amount so that, for instance, £250 borrowed can quickly spiral up to £1,000.

If you would like your own MP to support the amendment, email them. (If you're not sure who your MP is, you can find out by going to http://findyourmp.parliament.uk.)

Companies which use misleading names to trick people into buying expensive products have been given notice by the Office of Fair Trading.

In particular the watchdog is targeting the contemptible firms which use terms such as "Helpline" or "Debtline" in their title to suggest they may be a charity or public service.

I've written about such nefarious practices before, but I really do find it appalling that so many firms have been allowed to trick vulnerable people in this way.

I know from experience that when you're in debt and looking for solutions, it's relatively easy to be tricked into handing over a fat fee to someone who makes you believe they are going to help you.

Stopping fee-charging debt management companies from masquerading as charities is important. As Delroy Corinaldi of the debt charity the Consumer Credit Counselling Service points out: "Charities see those struggling with debt as a social problem that needs to be helped with advice and support. They are not out to make a profit from someone's debt misery. Whereas fee-charging debt management companies see those struggling with debt as a market to make a profit from."

We should do all we can to stop firms profiting from folks' debt woes.

We've just launched a Twitter account to keep you updated on all the breaking personal finance news throughout the week. You can follow it at @TheIndyMoney. For more inconsequential ramblings, follow me @simonnread.

s.read@independent.co.uk