Yahoo Finance £500 bill for one inquiry leads to call for cap on 118 charges
Campaigners and telecoms industry insiders have renewed calls for the government to cap the fees charged by directory service numbers in the wake of three-figure bills racked up by customers for a single call.
A report in the Observer’s Cash pages today reveals how a 90-year-old woman was billed £501 after a directory inquiries number-finding service, operated by Telecom2, tried repeatedly to connect her to her requested number at a cost of £7.99 a minute.
The 118 004 number was the UK’s most expensive directory inquiries service and has now been withdrawn after pressure from the Observer. But the case has highlighted the extraordinary charges such companies can impose, after the telecoms regulator, Ofcom, opted out of putting a cap on such fees.
Martin Lewis, founder of the consumer campaign website moneysavingexpert.com, described the prices of unregulated 118 numbers as disgraceful. He said: “It’s the elderly who don’t have access to the internet who tend to use these services and they deserve far better protection.”
Ofcom announced restrictions to charges for premium rate and non-geographical business numbers in a review in 2015, but ditched proposals to limit fees for 118 directory services.
“Ofcom took the view that there was no consumer harm, but we disagree,” said Cathy Gerosa, head of regulatory affairs at the Federation of Communication Services, which represents telecoms companies. “People can run up huge bills without realising it and Ofcom should be capping prices.”
The average cost of calling a 118 number has soared 17-fold to £6.98 since the directory inquiries industry was deregulated in 2003. Callers who agree to be connected to their requested number continue to be charged per minute throughout the subsequent call. On top of that, the caller’s own service provider adds an access charge of up to 55p a minute, bringing the cost of a 10-minute call via the most popular 118 118 service to £49 from a mobile phone.
Last year Ofcom agreed to allow 118 service providers to charge a flat fee of up to £15.98 a call plus £7.99 a minute. Telecom2 is the only operator to have taken advantage of that price band, according to the premium rate watchdog Phone-paid Services Authority, which is investigating complaints.
Telecom2, which has now refunded the 90-year-old, declined to comment but this month, following an Observer investigation, it replaced its 118 004 service with a number that charges below the market average.
Ofcom, which admits that it bowed to pressure from 118 providers in its 2015 review, has told the Observer that it would reconsider a crackdown.
“We are carefully monitoring the impact of the adoption of these new higher charges and are actively considering whether further action is justified,” said a spokesperson.
