19 December 2008

PhonepayPlus today published a Notice to Industry reminding all network operators involved in the provision of premium rate services of their due diligence responsibilties. This follows complaints to PhonepayPlus indicating concern among consumers over the increased abuse of 070 prefixed numbers.

Complaints to PhonepayPlus indicate concern among consumers over the increased abuse of 070 prefixed numbers. These complaints, along with information provided by industry, have resulted in a number of punitive sanctions imposed by the PhonepayPlus Code Compliance Tribunal.

PhonepayPlus today reminds all network operators involved in the provision of premium rate services that they are bound by the PhonepayPlus Code of Practice and that particular attention is paid to sections 2.1.1 and 2.3 of the Code which require network operators to carry out due diligence into the service providers they contract with.

Where any service provider is found to have breached the Code through misuse of 070 prefixed numbers in a clear attempt to scam consumers, PhonepayPlus will automatically initiate an investigation into the network operator associated with that service for lack of due diligence.

Where a service provider fails to pay a fine and/or administrative charge and a network operator is found to be in breach of the Code through poor due diligence, the Tribunal may include within any fine sanction imposed on the network operator, the entire fine and/or administrative charge amount owed by the service provider. The Tribunal may also impose other sanctions on the network operator for its failure of due diligence.


Ofcom has designated 070 numbers for use only as personal ‘follow me' numbers, which are charged at a higher rate. Ofcom does not allow end user revenue share on 070 numbers. PhonepayPlus has recently launched four separate emergency procedure investigations against service providers' misuse of 070 premium rate phone numbers. Due to the very serious nature of the alleged breaches of the Code, access has been barred to numbers associated with the four services with immediate effect. In the Adjudication Tribunal hearing of 4 December 2008, a fine of £250,000 was imposed on a service provider for serious breaches of the Code involving the use of 070 prefixed numbers. This is the largest fine issued to a service provider operating on 070 prefixed numbers and follows a number of high fines imposed by the Tribunal for similar breaches involving misuse of these numbers.


PhonepayPlus reminds the industry that it will vigorously pursue full recovery of all fines and administrative charges imposed by a Tribunal, including those imposed in relation to services operating on 070 prefixed numbers.

PhonepayPlus draws attention to the decision of the High Court in the case of ICSTIS v Liquidators of Allied Communications Limited [2007] EWHC 2307 (Admin), which clarified that ICSTIS (now PhonepayPlus) is able to sue service providers or network operators in respect of any unpaid fines and administrative charges which it had directed to be paid to it. The Judgement also reinforces PhonepayPlus' status as a legitimate creditor for insolvency purposes in respect of any unpaid fines and administrative charges.

PhonepayPlus is on hand to advise network operators and other businesses on compliance issues. Please contact us on 0845 026 1060 with any enquiries.

(Calls provided by BT will be charged at up to 4 pence per minute at all times. A set-up fee of up to 6 pence per call applies to calls from residential lines. Mobile and other providers' charges may vary.)