Telephone review to ensure value for callers

Call Cost Review will examine 118 and 070 numbers

Ofcom is to review the cost of calling some telephone services, to ensure people are protected from high prices and unfair practices.

People have been spending less on mobile and landline calls in recent years, and consumers generally have a wide choice of call packages and phone services.^[1]

However, Ofcom is concerned about the rising costs of calling certain telephone service numbers. These include directory enquiries numbers, which begin with 118; and ‘personal’ or ‘follow-me’ numbers, which begin with 070 and allow users to be contacted on any phone at any location.

Given the rising cost of calling these service numbers, Ofcom is launching a Call Cost Review, to ensure that prices are transparent and fair to consumers.

118 numbers were introduced by Oftel, the previous telecoms regulator, in 2003. The directory enquiry market, then run entirely by BT, was opened up to competition and a wide range of competing 118 services were launched. Today there are more than 400 directory enquiry services offering a variety of options and prices, with call costs ranging from 35p per call to £9 and higher.

Ofcom has been monitoring the costs of the more expensive services, which have risen significantly in recent months as fewer people use these services.

070 numbers were introduced by Oftel in 1995. They are designed to be used as a 'follow me' service, where calls are diverted from one number to another, so that the person being called can keep their own number private, and remain contactable wherever they go. Small businesses and sole traders often use them to make it easy to manage calls.

070 numbers are also sold legitimately on a one-off basis – for example, when someone is buying or selling a car, and does not wish to advertise their private mobile or fixed line number on a website or magazine.

However, 070 numbers may be confused with mobile phone numbers, which also start ‘07’. Ofcom is concerned about evidence of scams designed to make consumers believe they are calling a mobile number. When people call the 070 number back, they are actually dialling a service costing up to £3.40 a minute.

Our Call Cost Review will consider whether consumer harm is arising out of deliberate misconduct or market failure, and what action may be required. We expect to publish detailed proposals later this year.

We are also talking to the Phone-paid Services Authority about whether there are any additional consumer protection measures it could consider under its Code of Practice.

• ^[1] In real terms, average monthly household spend on landline services reduced from £31.52 to £22.56 between 2005 and 2015, while average spend on mobile calls and data reduced from £51.92 to £44.27 (Ofcom’s report on Pricing trends for communications services in the UK PDF, 1.3 MB ).

• ^[2] In 2015, Ofcom made the cost of calling service numbers – such as 118 – clearer for consumers. Phone companies are required to standardise the cost of calling these numbers, and make it clear on bills and in contracts. Companies providing the service called (such as directory enquiries) must state their charge clearly wherever their number is promoted. Directory enquiry providers must also follow the Code of Practice issued by the Phone-paid Services Authority, which regulates premium-rate numbers. This requires providers to be upfront about the service they offer and the cost, and treat consumers fairly.