They send a letter asking the owner of the car to identify who was driving. If they don't do so in 28 days, the owner gets 6 points and a multi hundred pound fine.
Then they send another letter offering the driver to either pay for a retraining course or points and a fine. I don't know exactly what punishment they offer but I expect for this it's about £50-100 fine. The driver who turned left across me, nearly hitting me if I wasn't quick on the brakes a few months ago without indicating got 3 points and a £100 fine.
They only do it if the evidence is crystal clear. I see about 20-30 mobile phone drivers a day, yet I'm lucky to report 1-2 a week, the evidence needs to be watertight.