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ICSTIS TO GET GREATER POWERS TO TACKLE UNSCRUPOLOUS FIRMS

9 December 2004


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.


For immediate release – Thursday 9 December 2004

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

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For further information, please contact the ICSTIS Press Office:

Rob Dwight

Tel: 020 7940 7408 or 07973 172 735

Catherine Bell

Tel: 020 7940 7464

NOTES

  • ICSTIS, the Independent Committee for the Supervision of Standards of Telephone Information Services, is the industry-funded regulatory body for all premium rate charged telecommunications services. We regulate the content, promotion and overall operation of services through our Code of Practice. We investigate complaints, and have the power to fine companies and bar access to services if the Code is breached. We can also bar the individual(s) behind a company from running any other premium rate services under any company name on any telephone network for a defined period.
  • Services are advertised on either 090 dialling codes or, in the case of mobile services, on four or five digit short codes followed by a descriptive key word (for example, 82828 VOTE). In some instances, such as interactive TV where viewers make ‘calls’ using their remote controls, the premium rate number may not be shown. In addition, we regulate all ‘118’ directory enquiry services.
  • Services offer information and entertainment via phone, fax, PC (e-mail, Internet, bulletin board), mobile (SMS/MMS/WAP) or interactive digital TV, and currently vary in cost from 10 pence per call to £1.50 per minute. The money paid by users for services is shared between the telephone company carrying the service and the organisation providing the content. Approximately 40,000 services are in operation at any one time, generating estimated revenue of £1 billion in 2003.