14 December 2004

UK Premium rate services regulator ICSTIS is to get greater powers to help it tackle those in the industry who deliberately set out to rip off consumers.

The new powers have been recommended by UK communications regulator Ofcom in response to a huge rise in complaints from members of the public about premium rate services. ICSTIS will consult on how best to implement the recommendations through its Code of Practice in the New Year.

The measures are detailed in a report on premium rate services regulation, which Ofcom has published today following an in-depth review of the industry. The review was triggered by ICSTIS receiving thousands of complaints from consumers about unexpected charges for premium rate numbers on their phone bills.

After discussions between Ofcom, the Department of Trade and Industry (DTI) and ICSTIS, the DTI formally requested that Ofcom conduct a review of the current regulatory arrangements with a view to improving measures to protect consumers from fraudulent and unscrupulous activity in the premium rate industry.

Welcoming Ofcom’s recommendations, Sir Peter North, Chairman of ICSTIS, said: “Ofcom has carried out a thorough review of premium rate regulation. The Report identifies the key causes of consumer harm and concern, and we share Ofcom’s assessment of the actions needed. By implementing the recommendations, we can meet those challenges and improve consumer protection.”

Commenting on the Report, Communications Minister, Mike O’Brien MP said: "This is a serious report about premium rate services. We need to tackle the problems to safeguard consumers and ensure the future reliability of the industry."

The key recommendations detailed in today’s Report include:

• Phone companies that lease premium rate numbers to service providers must provide ICSTIS with detailed and accurate information on the identity of their service providers.
• Phone companies must not pass revenue on to their service providers for 30 days.
• Service providers must have adequate customer service and redress processes.
• Where ICSTIS orders a service provider to refund consumers, phone companies must make funds withheld by them available for consumers to claim redress for three months.
• ICSTIS will be able to impose sanctions, including fines, directly against phone companies if they fail to meet their obligations under ICSTIS’ Code of Practice.
• The DTI should consider increasing the maximum fine, currently £100,000, that ICSTIS can impose.
• Ofcom and ICSTIS should take the lead in encouraging phone companies to produce a voluntary code of practice covering the monitoring of call traffic and information sharing.

Copies of the full Report, The Regulation of Premium Rate Services – an Ofcom Report for DTI, can be found on Ofcom’s website at www.ofcom.org.uk.

---ends---