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Phone cost confusion putting off callers, Ofcom says

By Kevin Peachey
Personal finance reporter, BBC News

image captionThe system of telephone numbers has evolved as technology has advanced

Some people are "put off" making important calls because of confusion over the amount they will be charged, according to the telecoms regulator.

Ofcom is planning a change in the system of "non-geographic" numbers, which start with 03, 08 or 09.

Markham Sivak, who is leading the review, said research had found some phone users believed costs were higher and so decided not to make vital calls.

But the new rules will take more than a year to implement.

The system of phone number prefixes has built up over the years as the technology has advanced.

Ever since numbers moved from solely simple area codes, a whole host of new numbers and charging structures has evolved.

These range from UK-wide numbers used by charities and not-for-profit organisations, to premium rate lines - offering horoscope readings or chat lines - which can cost as much as £2.60 a minute.

An Ofcom guide to the different charges runs to three pages, prompting the regulator to come up with a simplification plan.

"We have a complicated system. It is time to tidy it all up at once, not to make lots of little changes," said Mr Sivak.

Public pressure

At present, 0800 and 0808 calls are free from landlines but are often charged when the calls are made on mobiles. Under the plans all of these "freephone" calls will actually be free.

Other phone numbers starting with 08 have allowed businesses or helplines to take calls and divert them to call centres in different parts of the UK, or even internationally.

However, the charging structure can be complicated - with costs often overestimated by consumers, according to Mr Sivak.

For example, some calls that start with 087 include a call set-up fee, whereas some starting with 084 do not. Meanwhile, some 0845 and 0870 numbers are included in packages - making them free at certain times of day - whereas 0844 or 0871 numbers are generally not included.

The complexity has led to pressure - from the regulator, the public and MPs - on key organisations to switch their numbers to one with a slightly cheaper 03 prefix, mainly because these are free in call packages.

HM Revenue and Customs is planning to move all its helplines, such as the self-assessment tax line, to 03 numbers by the end of the summer.

One pressure group has also been running a campaign, highlighting alternative geographic numbers to those fed up with calling 08 numbers.

Charges split

The key to these chargeable 08 numbers or premium rate 09 numbers is that some of the fee goes to the telephone company and some to the business that is providing the service.

image captionThe changes aim to make it clearer where the cost of the call goes

This helps pay for the cost of the service, such as bus or train timetables, but it also means a profit can be made from these calls.

Some 93% of people asked in a survey by market research company Consumer Intelligence said they thought it was unfair that companies could make money from such calls.

Under Ofcom's proposals, the charges will be split into two sections so consumers know what they are paying and where the money is going.

Callers will be told: "This call will cost x pence per minute, plus your standard access charge."

The access charge is a fixed fee that will go to the telephone company. The service charge, quoted in pence per minute, goes to the company being called.

Consultation on the plans ends on 28 May and the regulator hopes the new system will be in place by the start of 2015.

The Federation of Small Businesses wants the changes to be made efficiently, and in one go.

"If it is one good overhaul, we would welcome that, but it never seems to be that way. It may be another five years, or it could be 10 years, but change keeps happening," said Mike Cherry, the FSB's national policy chairman.

Meanwhile, a spokesman for mobile operator O2 said: "Currently, even though we levy retail charges for calls to 0800 numbers, O2 customers can call many of these numbers for free. These include Childline, Crimestoppers and 0800 Reverse.

"In the future, Ofcom proposes that service providers make adequate payments to mobile operators to cover the cost of originating calls to 080 numbers. We support this approach. There are costs associated with delivering mobile phone calls to 0800 services and these need to be recovered, somehow."

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