Yahoo Finance 118 directory enquiry numbers now cost more than a premium rate
Hilary Wagstaff’s 90-year-old aunt needed to finalise her bill from her water company after moving to a retirement community. When she tried to call Southern Water, a recorded message informed her that the number she had dialled was no longer in use and she should call a directory enquiries number, 118 004, to be connected. After several attempts, she was put through to the company.
The cost of this minor piece of housekeeping amounted to £501 – for six calls to the directory enquiry number. Wagstaff’s aunt had fallen victim to a directory service that costs £15.98 for the initial call and £7.99 a minute thereafter. If callers agree to be put through to the number they requested the £7.99 charge applies for the duration of the ensuing call, including the inevitable long wait in a customer services queue.
“On one occasion she was left holding the line for 18 minutes, racking up £154 of charges, and on another attempt she was connected to Severn not Southern Water,” Wagstaff says. Added to the rapacious cost is an access fee levied by the caller’s own network operator, which in this case was BT, which charges 11p a minute to connect to a 118 number.
The bill came about after her aunt unwittingly misdialled Southern’s customer service number, which is one digit different to a number operated by Telecom2, a London-based firm which provides services, including phone numbers, to businesses. When she misdialled she triggered the message inviting her to call the directory enquiries service, hosted by Telecom2. The charges involved are mentioned in the message, but only at the end, by which time many callers would have tuned out or hung up.
Telephone directory enquiry services which provide and connect to requested phone numbers are allowed to impose such extortionate charges by the telecoms regulator Ofcom, and Wagstaff’s aunt’s experience highlights the rip-off that the service has become since the industry was deregulated in 2003. The aim at the time was to cut prices by ending BT’s monopoly on the service and increasing competition. Back then the firm was providing the service for a fixed 40p, which with inflation would be the equivalent of 60p today. Since then, however, charges from a landline have increased by an average 17-fold, and even more so if you are calling from a mobile phone.
In 2012, Ofcom proposed capping the cost of calls to 118 numbers to prevent customers unwittingly running up huge bills and reduce fraud. However, after a three-year review it abandoned its own recommendations. The regulator explains that the directory providers, unsurprisingly, didn’t want such restrictions on their profits. “The industry argued that there was no evidence of any fraud associated with the 118 range that would justify a retail price constraint on a previously unregulated service,” an Ofcom spokesperson says. “They argued that the price transparency rules we were also proposing were sufficient to protect customers against bill shock. We retained our concerns, but concluded that we did not have sufficiently strong evidence to impose the price control at that time.”
Those price transparency rules split the cost of calling premium rate and service numbers, such as 0845, 087 and 118, into a service fee charged by the provider and an access fee levied by the caller’s own network. Previously, the access fee was included in the overall cost of each call. The intention was to make the cost of a call clearer to customers, but critics claim it has instead increased confusion and caused costs to soar.
The situation now is that 0845 and 0870 numbers span more than 100 escalating price tariffs, from free calls to £15.98 plus £7.99 a minute, and since access fees vary from 3p to 55p per minute depending on the network operator, customers must research the terms and conditions of their operator to find out what the total sum will be.
Moreover, Ofcom last year allowed the industry to introduce higher tariffs for 118 numbers, including the £15.98 connection charge levied by Telecom2, although 118 004 is currently the only service to use it.
Of the two most popular directory enquiries services, 118 118 has increased its prices by 57% since 2015, making the minimum cost of a call £6.98 plus the access charge; while BT’s 118 500 service, which charges £4.44 for a minute-long call, have increased by 24% in two years. If a customer agrees to be connected to their requested number the charges can quickly spiral into double figures. An O2 customer placing a 10-minute call via 118 118 would be faced with a bill of £49, including O2’s 55p per minute access charge. Both 118 118 and 118 500 were fined heavily in 2014 for failing to make their charges clear.
The Number, which operates the 118 118 line, tells The Observer: “118 118 is unable to offer comment on matters of internal company finance. 118 118 does, however, strive to account for the diverse needs of its customers by offering a range of services at different price points. For some, speed and convenience is paramount, for others it may be cost.”
We are monitoring the impact of these new higher charges and considering further action
Ofcom spokesperson
Despite Ofcom’s claims that there is no evidence of fraud, industry insiders fear the price rises encourage missed call scams, whereby fraudsters use automated systems to dial multiple numbers then hang up before the recipient can answer. If they return the missed call they are connected to a premium rate number and are charged up to £15.98 for the connection. Contributors to several web forums report having been called by the same Hereford and Lincolnshire landlines. When they’ve called back a message has informed them that the number is not in service and they are invited to dial Telecom2’s 118 004 number. Telecom2 insists it never makes outward bound calls, although it profits from anyone who then dials its directory enquiries number. Unusually, the invitation to ring 118 004 greets anyone who calls any out-of-service numbers owned by Telecom2. Most other network operators inform those who call an unobtainable number that they should hang up and try again.
Most of those caught out by extortionate service charges are the elderly who don’t have access to the internet. Ofcom admits the obvious – that some companies have hiked their prices so high that customers may be exposed to bill shock or fraud. “That is why we are carefully monitoring the impact of the adoption of these new higher charges by a minority of specialist 118 providers, and are actively considering whether further action is justified,’ a spokesperson says. The premium rate watchdog, the Phone-paid Services Authority, meanwhile, says that following complaints it is investigating the 118 004 service.
It needn’t bother. Following The Observer’s investigation Telecom2 has suddenly withdrawn the number. A message now refers callers of the company’s many out-of-service numbers to a 118 018 directories line which charges a £2 connection fee plus a £2 a minute charge. “The 118 004 service is no longer being actively promoted and has been replaced with a service below the market average price,” says Telecom2 chairman Rob Johnson.
Telecom2 has now refunded Wagstaff’s aunt the cost of her calls, following pressure from The Observer, and BT has returned the access fee.
Campaigners, including the complaints website Resolver, are calling for 118 charges to be made clearer. “People tend to feel that the charges are their fault for not listening thoroughly to the recorded messages, but frankly, I was astounded to find out how high the charges can be when a 118 service puts you through to another number,” says spokesperson Martyn James.
CUTTING 118 COSTS
If you don’t have access to the internet and need to find a phone number, there are more than 100 directory enquiries numbers in operation, but most people are only aware of the heavily promoted 118 118, operated by The Number, and BT’s 118 500 service.
A one-minute call to the former will cost £6.98 plus an access charge of up to 55p depending on your operator, and if you agree to be put through to your chosen number you will continue to pay the premium rate for as long as the call lasts.
Few people realise that The Number also offers a free alternative on 0800 118 3733. The service is automated and you have to sit through a preliminary advert but after that it costs nothing.
It’s usually cheaper to call your own service provider’s directory enquiries number. Virgin Media, for example, allows customers on one of its mobile and landline packages up to 10 free calls to its own 118 180 a day, although charges apply if you choose to be connected to the number you sought.
Vodafone, meanwhile, charges its customers 80p a minute plus a 55p a minute access charge to use its 118 881 service.
O2 customers pay £1.30 a minute to use the firm’s own 118 402 directory enquiries service.
BT operates the free 195 directory enquiries number for people with disabilities. To sign up you should call 0800 587 0195 for a form, which will then need to be countersigned by a GP or another medical professional.
