In my experience they just send you really annoying letters that get progressively more threatening, there's a database that you can add yourself to if you're sure you don't need one, but even then they send letters saying that someone will be round to 'check you out'. On the whole I think it's just a kind of policing by consent where most people would rather pay than have the headache of getting bothered about it and potentially found out.
You can own as many TV's as you want, you can watch DVD's, play on a console, stand your drinks on them, all without a license, all perfectly legally. You only need a license if you are using your TV to watch a live broadcast.
This language certainly goes beyond just discouraging 'bad' implementations.