Telecoms regulator Ofcom will have the power to issue fines of £2 million for misuse of phone networks, an increase on current fines of £50,000.
The Government has increased the upper limit of fines in a bid to deter companies whose automated marketing calling systems make silent phone calls. The systems can automatically dial more numbers than there are people to man the phones, resulting in silent calls that can cause recipients distress.
"Companies who make nuisance calls by abusing automated equipment should face the consequences, which is why those who break the rules will be fined with a hefty penalty of up to £2m," said consumer affairs minister Kevin Brennan.
The maximum fine was just £5,000 in 2006, when it was increased to £50,000. The new increase will, the Government said in a statement, "provide the telecoms regulator Ofcom with a greater ability to deter and punish companies that ignore the guidelines in this area".
"Consumers can be assured that the new fines are definitely more than a slap across the wrist for persistent offenders," said Brennan. "I hope our decision will be a catalyst for better business practice, increasing customer loyalty and reducing operational costs for handling complaints."
Silent calls resulted in 6,500 complaints to Ofcom in 2009, and the change in the law follows a commitment made in last summer's Digital Britain Report.
The change will be made to 2003's Communications Act, which gives Ofcom the power to act against companies that persistently misuses communications networks in a way that causes annoyance, inconvenience or anxiety.
Ofcom has fined nine companies for the offence since the fine was last increased in April 2006.