“Thank You For Calling”: The Hidden Face Of The UK Premium Rate Phone Industry.

As from January of this year, around 14 million British Telecom (BT) customers no longer have to pay for telephoning 0845 or 0870 from their landlines. This represents a saving of  between 1.96p and 5.88p per minute plus a 6.85p ‘connection fee’ each time they call either of these numbers. It doesn’t apply, though , to any BT users who haven’t yet signed up for one of their special ‘package’ deals – nor to other premium rate phone numbers such as 0871 or 0844, both of which can cost over 10p per minute. The American author, Frances Lebowitz, considers that “the telephone is a good way to talk to people without having to offer them a drink”. These days, however, it can sometimes prove more expensive than buying a bottle of whisky and taking it round to them in person. The UK’s  premium rate industry is now worth over £2 billion  p.a and has become (according to ‘AlphaTalk’)  “an extremely popular way for businesses to earn additional revenue”. It is also, as the ‘The Guardian’ newspaper has pointed out, extremely controversial. Charges are often 20 times the rate for a normal call or a mobile phone text. A report issued by ICSTIS ( The Independent Committee For The Supervision Of Standards Of  Telephone Information Services), before changing its name to ‘PhonepayPlus’, confirmed that it had received almost 20,000 complaints in just one year. Around 50% of these were about subscription services such as ringtones. horoscope updates and football goal alerts or internet scams whereby viruses are sent to computers instructing them to dial premium rate numbers.

 The ‘Telephone Riches’ website recruits its clients (mainly astrologers, psychics,tarot readers , mediums and clairvoyants) by emphasising the “financial benefits of a highly paid telephone consultancy”. They can (its says) earn over £66 per hour if the caller is charged £1.50 per minute. The remainder goes to the Government (as Value Added Tax at 22p per min), BT (13p per min) and 5p to ‘Telephone Riches’ to cover their operating overheads.  Chatlines and Dating Services can make similar amounts. A recent ‘Observer’ article strongly advised against using a mobile to dial premium numbers as this can prove “extortionately expensive”. It estimated that a ten-minute call (including waiting time) to customer services at Barclays, HSBC and Virgin (among others) could cost about £1.92p. Anyone wanting to open an account with HSBC can, however, do so via 0800 (free from a landline). Similarly,  motorists applying to join the Automobile Association (AA) – though existing members have to contact 08705 if their vehicle breaks down.

Liberal Democratic Party Euro-MP’s have launched a petition to stop 0844 numbers being used by doctors’ surgeries & the NHS (National Health Service) and advocated a European Parliament ban on fraudulent enterprises that trick people into calling to claim non-existent prizes. In one particular case, the victim realised what was happening and put the phone down after 40 seconds. The company claimed the conversation had lasted 18 hours 38 minutes and tried to charge her £1,677.  ‘Which?’ consumer magazine has offered practical advice on avoiding premium numbers altogether. Most  organisations provide telephone contact details on their website for callers from abroad. Anyone based in the UK  has only to take off the country code(0044), add a zero, then phone at the normal basic rate. Research by the Analysys Mason  consultancy firm has indicated that the ‘phone-paid services market’ declined by 15% last year, due mainly to the lack of price transparency and a series of TV scandals. Channel Four was fined £150,000 for encouraging viewers to participate in their ‘Richard & Judy Quiz Show’ for 20 minutes after entries had officially closed. An equally contentious situation occurred at Christmas during the counting of  the votes for the BBC’s ‘Strictly Come Dancing’ semi-final contestants.

 Consumer survey data suggests that gambling and adult entertainment are the only premium services likely to be unaffected by the economic down-turn: “When money is tight, people stay at home”. The occupants of Britain’s jails, of course, don’t have any option: They can’t go out.  Instead, the National Consumer Council (NCC) has complained on their behalf that telephone calls from the UK’s penal institutions cost seven times the normal payphone rate: “Just because the consumers are prisoners, it doesn’t mean they should be exploited”. Rather like the Premium Rate Phone Industry, the reasons for this discrepancy remain “shrouded in secrecy”.



Filed under: Society | Posted on January 30th, 2009 by Colin D Gordon

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