Ofcom to probe high cost of directory enquiry calls
- Published
118 118 has spent tens of millions on television advertising
Telecoms regulator Ofcom says it is "very concerned" about the rising cost of calling directory enquiries and plans to examine the situation.
One popular enquiry service - 118 118 - recently increased its prices to a minimum of £8.98.
But Ofcom says some firms charge even more than that - up to £10.50 a call.
In a previous enquiry the watchdog decided against imposing a stipulated price cap on such charges, but it could now review that decision.
Under the current system operators are therefore free to charge up to a maximum of £23.97 for calls of less than a minute.
Anyone calling 118 pays two separate charges:
A flat-rate connection fee, which Ofcom says is typically up to £7.
A per-minute charge of up to £3.50. However, Ofcom says some providers "may charge significantly more".
In addition, there is an access charge of up to 50p a minute from the telecoms operator.
"Ofcom is very concerned about the rising prices of some 118 numbers, and we are already planning to review this market to ensure prices are transparent and fair to consumers," an Ofcom spokesperson said.
It said it would announce further details soon.
'Shock bills'
Some 118 services are far cheaper: Verizon UK, for example, charges a flat rate of 35p a call.
Other phone services that carry advertising and automated responses are free.
Many internet services are also free to users.
However, Citizens Advice said the current system leaves elderly people particularly vulnerable to high call charges.
It said one client had called them after receiving a £150 bill for calling a 118 number.
"Often it is unclear just how expensive a call can be," said Gillian Guy, chief executive of Citizens Advice.
"Elderly people who aren't confident using the internet are most at risk of shock 118 bills because they use these services to find information instead."
Ofcom said it was also aware of one consumer who called directory enquiries in 2009, and ended up with a bill for £350.
Alex Neill, of Which?, said the true costs of using directory services should be clear.
"Our advice to consumers looking to avoid being hit with these exorbitant charges is to check online for a cheaper, more direct way to obtain a contact number," she said.
'Failure of choice'
Operators add additional costs if consumers agree to be connected directly to the number they asked for, rather than dialling the number themselves.
Typically they are charged at up to £3.50 a minute for the service.
When directory enquiries was deregulated in 2003, calls to BT's 192 service cost just 40p.
David Edmonds, head of Ofcom's predecessor Oftel, claimed consumers would get more choice and "real competition on price".
By 2010, calls to the two dominant providers - 118 188 and 118 500 - cost at least £2 and have continued to rise since then.
A study by Rufus Pollock, a research fellow at Emmanuel College, Cambridge, described the deregulation as "a failure of choice".
The company behind 118 118 said it offered a no-frills telephone service for £1, and a free service on the internet.
In a statement, it said that it "strives to account for the diverse needs of its customers by offering a range of services at different price points."