Fines to rise for premium rate ‘scammers’

Rogue firms, which use premium rate numbers in phone and text scams, could face fines of £250,000 under new government proposals.

The increase has been promoted by a surge in phone text promotions, prompting callers to dial premium rate numbers, as well as a rise in complaints from consumers unknowingly connecting to expensive Internet diallers.

The services in question offer information and entertainment via phone, fax, PC, mobile or interactive digital TV. The cost varies between 10 pence per call to £1.50 per minute and is shared between the telephone company carrying the service and the organisation providing the content.

The services are advertised on either 090 dialling codes or via four or five digit short codes, followed by a descriptive key word (such as ‘82828 VOTE’, for example). However, in some cases, such as the use of interactive TV where viewers use their remote controls to make calls, the premium rate number may not be shown.

It is estimated that around 40,000 of these service are in operation at any one time, generating an estimated revenue of £1 billion in 2004.

Communication regulator Ofcom conducted a review of premium rate services last year, which recommended tightening up the regulatory regime, giving ICSTIS more powers to act against those who abuse premium rate services.

The rise in the cost of the fines, from £100,000 to £250,000, was proposed by E-Commerce Minister Alun Michael and is supported by the premium services regulator ICSTIS.

E-Commerce Minister Alun Michael said: “I’m determined to see that consumers are protected against rogue firms abusing the phone network and bringing misery to millions with nuisance calls. We have the right to use the Internet without the fear of being exploited by firms who prey on consumers. Customers have unwittingly run up hefty phone bills when their automatic dial ups get locked in to a premium rate number.”

George Kidd, ICSTIS Director said that the new fine limit would “ensure that the relatively small number of rogues out there do not continue to damage trust and confidence in the entire premium rate industry.”

The increase in the fines is part of a drive to tackle nuisance calls. Ofcom has announced that they are investigating seven companies who made nuisance calls, usually silent or short duration calls, following a string of complaints from consumers.

(KMcA)