RBS and Barclays drop premium rate lines as watchdog shames financial sector

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Which? reveals that nearly three-quarters of financial firms' customer service and complaint phone lines are pricey 084 or 087 numbers

Royal Bank of Scotland (LSE: RBS.L - news) and Barclays has vowed to axe premium rate customer phone lines after it emerged 73 per cent of financial firms' charge savers extra to ring up with enquires or make a complaint.

Consumer watchdog Which? shamed the country's banks, building societies and credit card companies by revealing that 177 out of 242 customer service or complaint lines in the sector were pricey 084 or 087 numbers.

Which? added that existing customers were routinely being charged more to call their financial firm, with cheaper or free from landline 0800 numbers reserved for sales or new customers.

RBS, which also owns NatWest, last night vowed to act by offering basic rate numbers for general enquiries and a freephone number for complaints by the end of the month.

Barclays has also pledged that it will introduce a freephone or basic rate number for all customer helplines. The pledge also covers Barclaycard.

There were rumours that Legal & General (LSE: LGEN.L - news) , one of Britain's biggest insurers, may also follow suit.

Richard Lloyd, Which? executive director, welcomed both moves but urged RBS and Barclays' rivals to follow their lead.

Those charging premium rate include self-styled mutuals such as the Co-op and Nationwide while Wonga, the controversial payday lender, uses a cheaper, geographic 020 landline.

Mr Lloyd said: "Millions of us prefer to deal with our bank on the phone, yet we are expected to cough up for a costly call when we do. With two of the biggest banking groups now leading the way by offering freephone or geographic numers, we hope thisi is a tipping point for the banking sector. There's really no excuse for other provides not to follow suit."

Jo Swinson, the consumer minister, unveiled proposals to crackdown on the use of premium rate phone lines at the beginning of August, insisting companies such as PC World and Royal Mail (LSE: RMG.L - news) charge only "geographic rates", or normal landline prices, to customers ringing up to complain.

But the proposals exempted train operators, airlines and financial firms.

Calling an 084 or 087 can cost as much as 44p per minute from a mobile.

RBS admitted that the introduction of its basic rate 0345 numgers would save a customer around £2.00 for every call they make to the bank from a mobile.

Les Matheson, interim RBS retail chief executive, admitted that almost 2 million of the 2.5 million calls it gets each month were general banking enquiries, but that alternative lines would be provided for these by the end of November.

He said: "We want to be the best bank in the UK for customer service and we'll only achieve that by making it easy to deal with us and doing the right thing for our customers."

Which? said nearly all - 95 per cent of credit card providers use 084 or 087 numbers for complaints and customer service helplines. Nine in ten of current account providers use them for complaints and service.

Free from landline 0800 numbers are used for 52 per cent of sales of new customer lines. Which? said Lloyds, Nationwide and Santander both charge premium rate for existing customers, but cheaper prices for sales. The Co-op uses pricey 0844 numbers across the board.

Of the motor insurers, Aviva (NYSE: AV - news) charges premium rate for existing customers but 0800 for new ones. Esure and Direct Line charge 084 across the board.

David Hickson of the fair telecoms campaign said: “We are delighted to see that the financial services sector is ready to respond to the proper indignation at the way that people have long been abused by misuse of 084 numbers.

“We are delighted that Which? is now adding its weight to the efforts which will lead to more similar announcements in weeks to come, as misuse of 084 and other expensive numbers finally comes to an end.”