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PSA takes action against potentially misleading 118 marketing practices – but is it targeting the right people?

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The Phone-paid Services Authority (PSA) has introduced new regulatory requirements to prevent potentially misleading IVR promotions being placed on inactive or otherwise unused geographic numbers. This is aimed at reducing consumer harm caused by these promotions.

The regulator is announcing new Special conditions, which ensure that promotional interactive voice response messages for Directory Enquiry services can only be promoted on geographic numbers that are already in use for other legitimate services. Such promotions must be compliant with PSA rules.

However, the industry has reacted angrily to what it sees as PSA condemning something that Ofcom actively encouraged them to do back in 2016 when it approved higher DQ tariffs and which also is hitting the headlines now as excessive access charges imposed by MNOs up the costs further.

According to PSA, before now, such messages have been placed on geographic numbers that were only used to promote the Directory Enquiries service, causing consumers to believe the service was connected to the person or organisation they were seeking to reach. This practice caused considerable harm to consumers.

The Special conditions also ensure that costs for onward connection are made clear upfront, giving consumers a reasonable amount of time to consider their decision before purchase.

The PSA has recently issued fines and other sanctions to service providers who had placed promotions in the form of interactive voice response messages on geographic numbers used solely for those promotions, advising people to call a 118 number.

Consumers reported confusion, having misdialled a number for a business or household and not realising that they would be connecting via a premium-rate Directory Enquiries service for a routine call.

One consumer said: “I dialled 01254 450045 by mistake… I got a message, ‘this number is out of service, call 118023.’ Thinking this was a Specsavers message [the intended destination of the call]I dialled 118023. I realised my mistake immediately and hung up. I was not advised of any charges when I got the message and was shocked to see a charge for £7.05 for 22 seconds on my bill.”

In October 2018, the PSA issued a fine of £200,000 to Powertel, a company which operated a 118 service, for using similar misleading promotions. In March, a fine of £425,000 was issued to the company Call the 118 113 Help Desk, which operated a service on 118 820, again for misleading consumers.

However, the industry suggests that these claims are unfair. Telecom2 put out a statement off the back of the PSA announcement that, while welcoming Ofcom’s strategy of imposing CAPS where consumer harm has been identified, it points out that it was Ofcom that approved the higher DQ tariffs in July 2016, more than two years ago and encouraged carriers to apply for them.

According to Telecom2: “That is not, in fact, DQ services but excessive ‘Access Charges’ imposed by Mobile Network Operators as a result of the Ofcom NGCS review in July 2016. The negative economic impact of excessive access charges far outweighs any harm from DQ services, the 118 market by Ofcom’s own admission is a declining one. Each networks service charge can be seen here.”

Telecom2 continues: “We look forward to Ofcom taking action on excessive access charges which can be up to 5000% higher on a 1p per minute call than the service charge. An easy solution would be to enforce a regime where the access charge cannot exceed the service charge.”

Joanne Prowse, CEO of PSA said: “We’ve updated our regulatory requirements for Directory Enquiries services. This is a market which has seen a lot of change in recent years, and it’s important that regulation keeps pace with that.”

“These new requirements advance the consumer interest by requiring providers to make the cost clear to consumers before onward connection and removing potentially misleading promotions from the market. This will help people to make informed choices about their use of Directory Enquiry services and give them greater control over their phone bill.”

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