Tackling consumer confusion over call charges

16 December 2010

Proposals to tackle consumer concern and confusion over the cost of calling businesses and other organisations on numbers such as 03, 08, 09 and 118 were today published by Ofcom.

Ofcom is proposing to standardise and simplify how a wide range of non-geographic numbers are priced which will help to promote transparency and competition in delivering services through these numbers.

Under the proposals calls to 0800 numbers will be free from mobiles; it currently costs up to 40p a minute to call an 0800 number from a mobile.

The proposals are based on new powers which will be introduced as a result of revised European telecoms legislation.

Consumer confusion

People dial non-geographic numbers to contact a range of organisations including businesses, government agencies and charities for many reasons including getting information about events, buying services and voting on TV shows.

Prices vary depending on many factors including whether calls are made from a landline or mobile.

New research has revealed that consumers are confused and uncertain about the cost of calling these numbers.

This lack of transparency is preventing many people from accessing telephone services and has a disproportionate effect on lower-income households.

Wide-ranging changes to address problems

Today's consultation proposes two ways to improve consumers' experience of using these numbers:

1. Simpler number ranges

Ofcom proposes to rationalise the non-geographic number ranges, to make prices clearer and more transparent to consumers. This includes proposals to reduce the number of ranges. Under the proposals there would be clear categories of numbers:

  • 01, 02 and 03 - geographic rates;
  • 07 - mobile rates;
  • 0800 - free from landlines and mobiles;
  • 0843/4 and 5 and 0871/2 and 3 - business rate, lower cost; and
  • 090/ 091/098 - premium rate, higher cost.

2. Standardised charges – phone company charge and service provider charge

Ofcom proposes to change the price structure of non-geographic calls by requiring the two elements of a call - the phone company's charge and the charge made by the business or organisation being called - to be presented transparently and separately to consumers.

Consumers would be able to use this information when choosing between different phone offers by comparing call bundles. Providers of the service would also be able to communicate clearly the call prices so consumers can make straightforward comparisons. More transparent prices should encourage competitive pressure and help keep prices down for consumers.

The proposals should also provide far more clarity for the pricing of 118 directory enquiry services, once again potentially leading to more effective competition and cheaper calls.

Clearer marketing and advertising

Under Ofcom's proposals, consumers would be advised of the cost of non-geographic calls when buying a new phone service.

Advertising should state the amount charged to call the service which would be added to the amount charged by the phone company.

This should reduce uncertainty by improving transparency, boost consumer confidence and increase competition.

Ofcom Chief Executive Ed Richards said: 'There is clear evidence of widespread uncertainty and confusion about the cost of calling these numbers.

'Consumers need to have far more transparency about the price they are going to pay for calls so that they can make more informed choices and so competition can work more effectively.

'Making 0800 free from a mobile and giving people clarity about what they are paying for 118 directory enquiry services will improve transparency, improve competition and enhance trust in these important services.'

Rekha Wadhwani, Chief Executive of The Helplines Association, said: 'We welcome Ofcom's plans to tackle these issues and agree there is significant confusion around call costs.

'We have been campaigning on the cost of calling freephone numbers, especially charity helplines, from mobile phones since 1999. It is also important that answering calls from mobiles remains affordable for charities.'

Read Ofcom's consultation in full