Banks call charges: customers still face costly bills

BT and Vodafone are two major providers of 0845 numbers to businesses and the only two networks to charge calls to these numbers at a discounted rate compared to their inflated per-minute rated charges for calls to 01, 02 and 03 numbers. BT’s discount is imposed by the NTS Retail Condition which ends on 1 July 2015. These is no such regulation imposed on Vodafone.

The new system of call charging for 084, 087, 09 and 118 numbers that comes into effect on 1 July 2015 for all landline and mobile providers will give further clarity to these call prices. Any funny business will be obvious for all to see simply by comparing the cost of calling 01, 02 and 03 numbers with the Access Charge for calls to 084, 087, 09 and 118 numbers.

When you call an 084, 087, 09 or 118 number, part of the call cost is set by the caller’s provider and part is set by the organisation being called. The cost of calling 01, 02 and 03 numbers is set entirely by the caller’s provider. If you are paying an extortionate rate for calls to 01, 02 and 03 numbers, you are on the wrong price plan or with the wrong provider.

Most people no longer pay a per-minute rate for calls to 01, 02 and 03 numbers and instead have an inclusive allowance as part of a call plan. On those landlines where no such call plan is in place, these calls can cost 10p per minute or more. An inclusive deal with AnyTime calls usually offers better value for money for any caller making more than about 10 minutes per week of daytime, weekday calls to 01, 02 and 03 numbers. For example, BT offers Home Phone Saver for £19.99 per month including Line Rental, AnyTime inclusive calls and Caller ID. This is only about £3 more than Line Rental on its own.

On pay as you go mobile phones, calls to 01, 02 and 03 numbers vary from 3p per minute to 45p per minute. Callers have complete control over how much they pay for these calls. If you are paying a high rate it is time to change to a different deal or to a different provider. Contract deals (with or without a phone) offer another way to make these calls and should also be investigated. The effective per-minute rate on a contract, even if, for example, only half of the allowance is used, can still be less than the pay as you go rate.

The Termination Rate for calls to geographic 01 and 02 numbers is just over 0.2p per minute. For calls to non-geographic 03 numbers it is about 0.5p per minute. For calls to mobile phones it is a little over 0.8p per minute. All of these calls should be cheap from landlines and from mobiles. If they are not, it’s time to change to a better deal.

As with every regulation there has ever been, there will always be a few who ignore it and carry on regardless. The success story, here, is the huge number of organisations that have already complied with the new rules that were introduced in June 2014. Millions of calls per week that this time last year would have been to 084 and 087 numbers are now instead being made to 03 and 080 numbers.

Doubtless there will be a number of organisations that fail to comply with what they are required to do by 1 July 2015. The media can tear them to pieces once their position is known.

They will, however, be in the minority. Most banks have already adopted new 0345 numbers. On the other hand, the insurance industry has shown little movement away from expensive numbers.

Ofcom are already running adverts about the forthcoming changes both in trade magazines and in the national press. There can be no excuse for not knowing about what is coming.

Organisations using 084, 087 and 09 numbers now have only a few short months left to justify their Service Charge and amend all of their marketing materials to declare it, else change their number to stop imposing it.

They have until 1 July 2015 to amend their marketing materials.

They have these two main choices:

“Call us on 084X XXX XXXX
“Calls incur a Xp per minute Service Charge on top of your phone provider’s Access Charge.”

The Service Charge can be up to 7p per minute on calls to 084 numbers, and varies depending on the number called, not by which provider is used to make the call.

“Call us on 034X XXX XXXX
“Calls to 03 numbers cost the same as calling 01 and 02 numbers and count towards inclusive allowances on landlines and on mobiles.”

The latter is a much more attractive proposition for most callers.

The other choice is:

“Call us on 080X XXX XXXX
“Calls are free from landlines and from mobiles.”

Free calls to 080 numbers from mobile phones takes effect on 1 July 2015.

Organisations will pay higher fees for incoming calls to 080 numbers than for incoming calls to 03 numbers.

Thanks Ian. Can you tell me what enforcement is likely to take place if organisations fail to meet the deadline? We have had years of nuisance calls and the fines are few and paltry.

I have noticed that it is becoming harder to find phone numbers on companies’ websites. At one time, income from costly calls was a means of deferring costs, but that is nearly history.

I have some sympathy with companies and other organisations having to provide information that many of us could find on their websites.

Numbers starting 084 and numbers starting 087 with a Service Charge of up to 7p per minute will be dealt with by Advertising Standards.

Numbers starting 087 with a Service Charge of more than 7p per minute and numbers starting 090, 091, 098 and 118 will be dealt with by PhonepayPlus.

Ofcom is also monitoring compliance and says it is ready to take action where needed.

Perhaps we should nominate you to appear on Mastermind, Ian. I have an idea of your chosen specialised subject.

Unfortunately, the Basic Rate legislation banning 084/087 customer service numbers doesn’t apply to financial services, so Santander / Aviva can still legally rip you off to their heart’s content.

Santander is one of the worst banks for making misleading and illegal claims about the cost of 084/087 calls. Their website claims that for 0845/0870 “Calls from some fixed networks cost no more than a national rate call.” That may be true for BT, but who are the others? And they’re still falsely claiming that the call set-up fee for 0844 numbers is 13p or 15p when it’s actually 15.97p.

The dozy FCA is still plodding along with its consultation about banning phone charges above basic rate, but it doesn’t close until 15 March so don’t expect any action any time soon !

There’s no question that the FCA has been entirely ineffective. Whatever the FCA eventually comes up with, will be too little, too late. It will be trumped by Ofcom’s new transparency measures and it is this forthcoming change that is mostly responsible for banks moving from 0845 to 0345 numbers.

The new call charge system coming into effect on 1 July 2015 eliminates connection fees on calls to 08, 09 and 118 numbers. The requirement to declare the Service Charge and mention that the caller’s phone provider will add their Access Charge will make it abundantly clear that terms such as ‘local rate’ and ‘national rate’ no longer apply.

The new number for First Direct is 0345 6100 100.

Wherever you see an 084 or 087 number advertised, try calling the matching 034 or 037 number

Calls to 03 numbers cost the same as calling 01 and 02 numbers and count towards inclusive allowances on landlines and on mobile phones. While most people will call these numbers as part of an inclusive allowance, those without such an allowance will be paying up to 12p per minute from a landline or up to 45p per minute from a mobile. Calls to 01, 02 and 03 numbers may be ‘inclusive’ but they are never ‘free’. Those who are paying a per-minute rate for these calls are very likely on the wrong call plan for their needs.

Users of 084 and 087 numbers do not get ‘first dibs’ on the matching 034 or 037 number. Ofcom regulations ensure that 034 and 037 numbers can be used only where an organisation already uses the matching 084 or 087 number. The number migration can be done at any time. There is no time limit.