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Last Updated: Thursday, 9 December, 2004, 15:30 GMT
Ofcom in premium rate crackdown
Man with bills
Many people have been the victim of premium rate phone scams
Telecoms regulator Ofcom is to tighten controls on premium rate phone services to protect consumers and crack down on fraudulent activity.

Firms providing premium rate services could face bigger fines under a revamped industry code.

Telecoms providers will have to give more information to customers about how they can bar premium rate callers.

The regulator is under pressure to curb rogue operators in the industry, amid complaints about premium rate scams.

Bigger fines

Ofcom is particularly concerned about 'internet diallers' which re-route dial-up internet connections onto premium rate 09 numbers without customers' knowledge, often leaving them with extortionate phone bills.

The regulator is proposing an increase in financial penalties for firms breaching the industry code overseen by ICSTIS, the body which regulates premium rate services.

The maximum current fine is just 100,000.

These are necessary changes to ensure consumer confidence in the premium rate industry for the long term
Stephen Carter, Ofcom

Firms offering premium rate services will be required to offer refunds to customers if it is proved they have been misled.

To facilitate this, Ofcom is proposing that fees paid by telecom companies to network providers for connecting a premium rate call - which are then passed onto premium rate firms - should be frozen for at least 30 days.

This would give ICSTIS time to examine complaints and determine whether fraudulent activity has taken place.

It would also give the regulator access to funds to compensate customers.

Detailed information

Network providers will also be asked to provide detailed information on premium rate suppliers using their lines and to ensure that this information is accurate.

"There is a clear need for action here," said Ofcom chief executive Stephen Carter.

"These are necessary changes to ensure consumer confidence in the premium rate industry for the long term."

Ofcom and ICSTIS will launch a public consultation process to seek the views of telecoms operators and consumer groups.

However, the regulator said it wanted to implement the tougher regulations as soon as possible.

Premium rate phone calls cost up to 1.50 a minute on the BT network.

Premium rate numbers, used for services ranging from TV programme votes and competitions to chat lines and adult services, are a highly lucrative source of income for suppliers.

They produced estimated revenues of about 850m last year.

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