Ref: 27/03
Date: 21 May 2003

Oftel has issued a final order against 1^st Rate Telecom for breaching its operating licence.

Following an investigation, Oftel has concluded that 1^st Rate Telecom had allowed chat services to be run on number ranges in a way that contravened the National Numbering Conventions (the Conventions). Consumers calling these chat services paid up to 75 pence per minute rather than the advertised rate of 10 pence per minute.

The order places a duty on 1^st Rate Telecom to comply with the Conventions. If this duty is breached, any person who sustains loss or damage as a result can take the offending company to court.

Oftel has worked closely on this investigation with ICSTIS, the organisation responsible for regulating the content and promotion of premium rate telephone services.

ICSTIS has recently taken action against E1 Rentals who 1^st Rate Telecom sub-allocated numbers to, fining them £10,000, barring access to the service and ordering them to fully recompense all affected consumers.

David Edmonds, Director General of Telecommunications, said today:

"Oftel has taken action against 1^st Rate Telecom for allowing chat line services to be offered on personal and specific non-content premium rate numbers.

"These services should not be run on these type of numbers and this is a clear breach of the UK’s numbering rules. Consumers who called these numbers paid considerably more for their call than the advertised rate.

"Oftel has taken swift action against 1^st Rate Telecom to ensure that this does not happen again in the future.

"Oftel worked closely with ICSTIS during the investigation and I am pleased to see that they have taken action against E1 Rentals, the service provider who 1^st Rate Telecom allocated the numbers to.

"This is a good example of regulation working in tandem to stamp out the misuse of premium rate services."

George Kidd, Director of ICSTIS, added:

"Our urgent investigation and tough sanctions against E1 Rentals, coupled with Oftel’s intervention at the network level, clearly demonstrates a commitment to stopping those who deliberately set out to deceive consumers.

"Our Code of Practice clearly states that premium rate services must operate according to Oftel’s numbering conventions. The vast majority do, but we will continue to work closely with Oftel to take action against any company that flouts this requirement."

The Conventions set out the rules governing the use and management of telephone numbers in the UK. All operators who have been allocated numbers by Oftel must follow these rules.

In contravention of the Conventions, 1^st Rate Telecom used a series of personal (070) and specific non-content premium rate (091) numbers between October 2002 and February 2003 to provide access to chat services which constitute a form of content service. Although 1^st Rate Telecom has since withdrawn access to these services, Oftel has taken action to ensure that a similar breach will not happen again in the future.

Notes to Editors:

1. The final order is available on Oftel's website at www.oftel.gov.uk/publications/licensing/2003/frt0503.htm. Hard copies are available to the media from Oftel's Press Office, telephone 020 7634 8991, and to the public from Oftel's Research and Information Unit, telephone 020 7634 8761.

2. Oftel gave notice of its intention to publish a final order on 31 March 2003 (see www.oftel.gov.uk/publications/licensing/2003/frt0303.htm).

3. 1st Rate Telecom was allocated numbers in the ranges 07049 1xx xxx, 07059 1xxxxx, 07090 1xxxxx, 07005 1xxxxx, 07021 3xxxxx and 09111 84xxxx ranges by Oftel in 2002. 1^st Rate Telecom sub-allocated some of these numbers to E1 Rentals who in turn offered chat services directly to consumers.

4. In October 2002, Oftel received complaints that numbers 07090 100100 and 07090 101010 were being used to provide access to chat services. Oftel raised this with 1^st Rate Telecom and received assurances that the situation would be remedied. Calls to the offending numbers suggested that service had been ceased to them.

Oftel subsequently received further complaints that access to chat services was again being provided from these numbers. Oftel again contacted 1^st Rate Telecom and demanded immediate remedial action. 1^st Rate Telecom advised that access to the service had been ceased from all 070 numbers and that the service was being offered via 09111 848484.

Oftel received a further complaint in February 2003 that access was again being provided to the chat service from 07005 101010. After confirming that this was the case, Oftel concluded that 1^st Rate Telecom was acting in breach of its licence and decided that enforcement action was necessary.

Although 1^st Rate Telecom has now ceased service to the 070 and 091 numbers, Oftel is not satisfied that future breaches will not occur unless an order is made against 1^st Rate Telecom.

5. 070 numbers are personal numbers – mobile phone, pager and 'find me anywhere' numbers. They are typically charged at between 10p per minute and 50p per minute.

6. 091 numbers are non-content premium rate numbers. Content services, such as chat services, should not be run on this number range. Calls to premium rate numbers can be charged for at anything between 10p per minute and £1.50 per minute. For further information about premium rate services and how they are regulated, contact the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) (tel: 020 7940 7474, website: www.icstis.org.uk).

7. The National Numbering Conventions are the rules governing the use and management of telephone numbers in the UK and are available on Oftel's website at: www.oftel.gov.uk/publications/numbering/2003/cons0503.htm.