A watchdog pledge to crack down on greedy operators of directory enquiry services has failed to stop phone users being fleeced up to £20 a call. Firms such as The Number UK – behind the market leading 118 118 – demand £11.23 for a 90-second call. Rival Telecom2 can charge up to £19.98 for the same call.
The original '192' service cost 40p when privatised 15 years ago so as to open the market to new competitors. But competition has driven up, rather than down, prices – leading to hyperinflation price hikes of up to 5,000 per cent.
Critics believe providers have exploited a lack of joined-up regulation. While watchdog Ofcom is in charge of pricing, the Phone-paid Services Authority polices directory enquiries. Sarah Pennells, of money website SavvyWoman, says: 'It is not rocket science. These operators are being allowed to rip off customers with outrageous charges. Between them, the regulators should put a stop to this rather than having lots of consultation and tweaks to the rule books.'
Ofcom launched a consultation on prices in June that closed last month and hopes to publish its findings by the end of the year. It could lead to a cost cap of £3.10 for a 90-second call – in line with charges of five years ago. But a previous attempt made by the same regulator to clean up the market in 2013 – which also included suggestions of a price cap as well as better clarity on charges – ended in failure.
Pennells points out that directory enquiry calls costing several pounds cannot be justified because similar services can be found costing much less – or even offered for free.
For example, the Post Office charges just £1 for those calling its 118 855 number. The Number also provides a free enquiry service – 0800 118 3733 – if you are willing to listen to a recorded advert when you call. You can also use the internet and get a number free using 192.com.
An Ofcom spokesman says: 'We are concerned about the rising cost of directory enquiries. A consultation was published in June following a review of how people use the services. We aim to publish conclusions by the end of the year.'
Ofcom's 98-page 'directory enquiries review' confirms many people usually ring the service whose number they remember, rather than opting for the most competitive. This has led to most callers paying more than they need.
'Poor price transparency' has also been to blame. The paper concedes a previous price cap proposal made five years ago was abandoned after 'strong representations' from BT and The Number. Since then the price of 118 118 has risen four-fold.
Providers have found it easier to exploit customers through confusing price structures – bamboozling consumers who have a mind-boggling 400 directory enquiry options from which to choose.
For example, 118 118 charges £4.49 a call plus £4.49 a minute with a one-minute minimum. It then charges by the second at the same rate. On top of this, telephone line and mobile providers can add a fee of up to 55p. This has led to 'bill shock' among customers who had no idea how much their enquiry had cost.
Often it is the elderly and most vulnerable who fall victim as they are less likely to use free internet searches and prefer to talk to a real person when they wish to find a phone number.
The Phone-paid Services Authority has a '#NumberChecker' service that can be used to find the pricing of a directory enquiry service provider.
A spokesman says: 'If you have a problem with how the pricing of a directory enquiry service is being promoted then you should complain to us. Ofcom sets the pricing policy.'
Telecom2 says: 'Our price limits are set by Ofcom and we work within them. Clients using our service can pay less. We will make any changes required if regulatory rules are changed.'
The Number failed to respond to requests for a comment.