OFTEL INTRODUCES TOUGH NEW POWERS TO REGULATE PREMIUM RATE SERVICES

Ref:09/02
Date: 8 February 2002

Oftel today introduced tough new powers to disconnect companies sending rip-off premium rate text messages to mobile phones.

Some companies have sent text messages at random to mobile phones, and charged the user premium rates for services they unwittingly signed up for by replying to the message.

Under the powers the Director General of Telecommunications can order the disconnection of the service when the operator ignores a request from the premium rate service watchdog ICSTIS to terminate it.

The powers apply to premium rate services promoted on 090 phone numbers from fixed and mobile phones as well as premium text messages.

Recent examples of abuse have included:

• Service providers have sent unsolicited text messages inviting a response costing £1.50;
• Competition lines that informed the caller they had won a prize, which the consumer then never received.

In future, the Director General could intervene to disconnect the service provider.

Commenting on these new powers, David Edmonds, Director General of Telecommunications, said today:

"While the vast majority of companies that offer Premium Rate Services are responsible and abide by the industry’s Code of Practice, certain premium rate lines have failed to meet acceptable service standards.

"There have been cases of competition lines where callers run up high bills but never receive their prizes and more recently, unsolicited premium rate text messages that promise cash prizes or invitations to join adult chatlines.

"These new tough powers will enable Oftel to support ICSTIS’ work to stamp out these blatant abuses quickly and protect consumers

"Strengthening the regime will also protect the reputation of legitimate premium rate service providers."

ICSTIS Chairman Sir Peter North said today:

"The effectiveness of ICSTIS’ regulation has always depended on the support of the Telecoms networks. The change to their licences to guarantee backing for our Code of Practice will ensure continued effective protection for consumers and a level playing field for the industry.

"This is especially important as the number of networks continues to increase and the range of services that are delivered continues to expand. The licence amendment also means that ICSTIS’ two existing Codes have now been merged to create one single, user-friendly Code of Practice, which enables us to call on Oftel for support in eradicating serious consumer harm when all of ICSTIS’ measures have been exhausted."

Note to Editors

1. The licence modification and determinations are published on Oftel’s website at www.oftel.gov.uk Copies are also available to the media from Oftel Press Office on 020 7634 8991 or to the public from Oftel’s Research and Intelligence Unit on 020 7634 8700.

2. Oftel’s Statement, Regulation of Premium Rate Services: licence modification, published 24 July 2001, is available from Oftel's website at www.oftel.gov.uk/publications/numbering/prslic0701.htm.

3. ICSTIS, the Independent Committee for the Supervision of Standards of Telephone Information Services, (www.icstis.org.uk ) is the industry-funded watchdog for all premium rate charged telecommunications services. ICSTIS regulates the content and promotion of services through its Code of Practice, and has the power to fine companies or bar access to their lines if the Code is breached.

4. Premium rate services offer information and entertainment via phone, fax, PC (e-mail, Internet, bulletin board), mobile (SMS/WAP) or interactive digital TV. Services, which are advertised on ‘090’ dialling codes (certain mobile services may also use short access codes), range from sports, voting and sex lines to competition, chat and business information services, and can vary in cost from 10 pence per call to £1.50 per minute. Approximately 20,000 services are in operation at any one time, generating estimated revenue of £590 million in 2001.

5. The proposed definition of Controlled Premium Rate Services (CPRS) includes all premium rate services which are calls comprising the cost of the call and the service, which are billed to customers’ telephone accounts and where the revenue for the call is shared between the telephone company and the service provider. It will also cover those premium rate calls which are charged at a price which cost more than 10 pence.

6. Oftel has no involvement in controlling the content of the service.