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It works fine. If someone calls you that is not in your contacts it will not ring your phone and pushes them to voicemail. That's really all there is to it.
 
Bear in mind that the call still comes to your phone as, obviously, it's the phone that works out whether the call should be allowed or not.

This means if you have another device and "Calls on other devices" set, they may still ring.

Also, if you're roaming abroad, this could mean you're charged for the call coming to your phone and also the call back to your home country for the call to be diverted to voicemail. If the person talks for ages, you could end up with a large bill.
 
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