Telephone call charges to be made simpler

12 December 2013

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The cost of calling businesses and services will become clearer for consumers under major changes to telephone charging, Ofcom announced today.

The measures are designed to tackle consumer confusion about how much it costs to call companies, public bodies and other organisations on numbers starting 08, 09 and 118. These ‘non-geographic’ service numbers have a range of uses, from finding out information to banking, directory enquiry and entertainment services.

Currently, unless they are using a BT line, callers to these numbers are not generally informed how much they will be charged. Under new rules confirmed today, telephone users calling service numbers will in future see the cost broken down into an ‘access charge’ to their phone company, plus a ‘service charge’ to the company or organisation they are calling.

Phone companies will be responsible for setting their access charge, making it clear to customers on their bills and informing new customers of the charge when they sign up to a contract.

Separately, service providers – the party being contacted – will specify their service charge wherever they advertise or communicate it.

Consumers will therefore be able to understand the exact cost of making the call by adding the access and service charges together. They will also be able to compare the prices of different phone and service providers more easily. The changes will come into effect in June 2015, to allow time for the many companies who use these numbers to adapt.

Explaining the changes

Virtually every consumer and company in the country uses service numbers in some way. People use them to call businesses and Government agencies, make payments for services and vote on TV shows.

Currently, callers are given information such as:

“Calls will cost x pence per minute from a BT line. Calls may vary from other landlines and calls from mobiles may cost considerably more.”

Under the new structure, Ofcom expects call cost descriptions to follow a format such as:

“Calls will cost x pence per minute, plus your phone company’s access charge.”

Benefits to consumers

Ofcom has today confirmed additional measures which, alongside the clearer phone charges, are designed to make prices more transparent, improve competition, restore consumer confidence in non-geographic service numbers and increase their usage:

  • Freephone will mean free. Consumer calls to Freephone (0800, 0808 and 116) numbers, which are generally free from landlines, will become free from mobile phones too.
  • Premium rate charges will be capped. The service charge for premium rate (09) numbers will be capped, helping to protect consumers from the risk of rogue operators imposing extremely high charges in future.
  • Confusion around 0845 will be addressed. This number range – which is sometimes tied to the cost of a geographic call – will no longer work this way, and will instead function like any other 084, 087 or 09 number. That means the cost of calling 0845, broken out into an access and service charge, will become clear.
  • Organisations wishing to offer a geographic-rate number will still have the option of using the 03 range. Ofcom is actively encouraging public and not-for-profit bodies to use 03 numbers. These cost no more to call than a geographic (01 or 02) number, and must be included in a customers’ inclusive minutes or discount schemes.

These are significant changes that will affect all consumers of telecoms services, and every business that uses these numbers. Putting the new system in place will require careful and detailed planning by telephone companies and service providers.

Ofcom has decided that the changes should all be implemented in around 18 months’ time  – on 26 June 2015 – and is already engaging with industry to oversee preparations for the changes.

As part of this, Ofcom is working with major landline and mobile providers to develop a national communications campaign which will explain the changes to UK telephone users from next year. Work is also underway to develop a consistent approach across industry to communicating call charges from the day the changes come in.

Ed Richards, Chief Executive of Ofcom, said: “These changes will be the biggest for UK telephone customers in more than a decade. We expect them to restore people’s confidence in using phone services, and to increase competition.

“Freephone will mean free for all consumers, and the cost of calling other services will be made clear. Telephone users will be able to see how much they’re paying, and where their money is going.”

A statement on today’s decision is available online.