Soon, calling public services won’t cost the earth

0845 numbers were widely adopted back in the 1980s and 1990s. At that time, these were charged exactly the same as a “local rate” call to a geographic number. Likewise, 0870 calls were charged at “national rate”. At that time, they were “good” numbers. There was no such thing as inclusive calls on landlines. Mobile usage was rising. Gradually, more and more callers were being exposed to extortionate call rates when calling 0845 and 0870 numbers.

The most favourable pricing arrangements for calls to 0845 and 0870 numbers made by BT landline users ended in 2003 when calls to 01 and 02 numbers became inclusive in call allowances. This suddenly left 0845 and 0870 calls as non-inclusive and therefore relatively expensive in comparison. To fix the problem, Ofcom made 03 numbers available in 2007. These are charged at the same rate as calling 01 and 02 numbers and count towards inclusive allowances on landlines and mobiles.

Adaption of 03 numbers was very low. Many users of 0845 and 0870 numbers seemed to be unaware of the very high rates paid by most callers when calling 0845 and 0870 numbers. Most users seemed to only have awareness of what BT users pay, and no idea that those rates are non-standard.

BT call rates for 084 and 087 numbers are capped. BT are not allowed to make profit on call origination for 084 and 087 numbers. BT’s rates for 084 and 087 numbers are always the lowest of all operators. Other operators add their unregulated markup on top. BT is not allowed to add any markup on 084 and 087 calls. During the week, calls to 0845 numbers are charged by BT at 2p/min and all of that money is passed on to the called party as Service Charge.

BT’s rates for calling 01 and 02 numbers are unregulated. On their AnyTime plan, calls to 01, 02 and 03 numbers are inclusive at all times. On other BT call plans, calls to 01, 02 and 03 numbers are charged at an extortionate 9p/min during weekday daytimes.

This creates an unusual situation. During the daytime, on weekdays, “out of plan” calls made at capped rates to 0845 and 0870 numbers on the “BT Weekend” and “BT Evening and Weekend” plans cost LESS than the unregulated call rates charged by BT for calls to 01, 02 and 03 numbers. This is an anomaly that skews the market and confuses callers. It has led to users retaining their 0845 and 0870 numbers for far longer than they should have.

0845 calls are very expensive for all other callers, especially when called from mobile phones. Likewise calls to 0870 numbers are cheap from landlines and very expensive from mobiles. BT accounts for less than 40% of domestic landline calls. Mobiles account for more than 55% of all calls. BT rates are irrelevant for most callers.

Many users misunderstand these things. For these and other reasons, users of 0845 and 0870 numbers have failed to voluntarily make the change to 03 numbers. Many were confused by BT’s regulated call rates for 084 and 087 numbers and assumed they are the normal rates for these calls. In fact, as already explained, they are the exception in the marketplace.

Recent BIS legislation is now forcing the change to 03 numbers on businesses. Cabinet Office policy is now forcing that change on government departments and public services. Action is awaited by the FCA to force the same change within the financial sector.

When users swap to 03 numbers, some will retain their 0845 numbers for a short time in order to cater for the small number of callers on those unusual tariffs where 0845 calls are cheaper than 03 calls. However, it is likely that many of the users on “Weekend” or “Evening and Weekend” tariffs are actually on the wrong call plan. If they are making even a small number of calls on weekdays, it is likely that an “Anytime” call plan, with calls to 01, 02 and 03 numbers inclusive at all times, is likely to be a much better deal. This will become ever more obvious as more and more users change to 03 numbers.

0845 and 0870 numbers are advantageous to a small number of BT callers making calls outside their inclusive call plan. 03 numbers are advantageous to almost all other callers. That fact had to be recognised before the mass swap to 03 numbers could begin. It should have been recognised years ago but no-one was listening.

Just remind Miss X that Westminster has been breaking the law since 13 June 2014 when the Consumer Contracts: Information, Cancellation and Additional Payments Regulations came into force, and that her refusal to resolve the issue constitutes Maladministration.

For good measure, threaten to take them to Local Government Ombudsman (0300 061 0614). That should concentrate Westminster’s tiny, greedy minds quite wonderfully !

If Ofcom really represented consumers rather than just its chums in the industry, it would have instructed all telcos that all 084/087 numbers should always be charged at exactly the same rates as 01 and 02 numbers. That should be quite straightforward; they’ve already done this for the 03 number range.

If any organisation wishes to keep using an expensive number then Ofcom should require them to change to the equivalent 094/097 number. This would end all the confusion by making all expensive numbers easily recognisable.

It’s utterly absurd that rip-off 0870 numbers are allowed to share the same ‘friendly’ number range as the free 0800 and 0808 numbers, but that’s Ofcom’s crazy logic for you !

Ofcom have opted for a simpler and more effective solution.

From 26 June 2015, all users of 084, 087, 09 and 118 numbers are required to declare their Service Charge. For those who are prevented by regulation from levying this charge and for those who are unable to justify this charge, Ofcom made matching 034 and 037 numbers available in 2007.

Ofcom are imposing price transparency on those number ranges. In so doing, usage will fall.

Other bodies have produced regulation and guidance effectively imposing a move away from 084 and 087 numbers over to new 01, 02 or 03 numbers. These include BIS and CO, and they may eventually be joined by the FCA.