Travel firms should send costly calls packing

This business law doesn’t impact state-owned activities or financial systems. Perhaps the fact that in many European countries many of the passenger transportation systems are state-owned has something to do with the proposed exemption.

The UK’s position on EU directives usually seems to be to implement the minimum requirements. If something can be exempt, then unless there’s a good reason to include it, it remains exempt. Rip-off rate telephone numbers seems to be one of those cases where common sense suggests there should be no exemptions.

I don’t think that railways come into this much. Most tickets, and queries about them, are dealt with at ticket offices at stations. On the other hand, most airline tickets, and queries about them, are dealt with remotely. Therefore the need to speak to a travel company by telephone is negligible with railways and local public transport compared to with airlines. Therefore the state ownership of the former wouldn’t have much of a bearing on this.

Bringing forward a flight by 95 minutes sounds like breach of contract.

Send the airline a bill for the cost of the ticket plus the cost of the phone calls. Tell them that you will both sue and publicise if the fail to pay forthwith.

Correction – 0844 costs 5.1 pence per minute and 0871 is 10.2 pence per minute to call – hence less than originals I quoted. Also, if “EU Consumer Rights Directive (CRD), states that customer helplines must be charged at no more than the basic rate”, then 0844 calls are significantly less than the 9 pence cost to call a typical STD 01x or 020 x type number…and 0871 is hardly excessive at 1.2 pence per minute extra. Time to get things in perspective I think.

Much of the information you have supplied is simply misinformed or incorrect.

Point (1). BT is not the only supplier. 0844 numbers cost up to 12.4p/min and 0871 numbers cost up to 14.4p/min with Virgin Media. Each call also incurs a 16p connection fee. BT’s prices are up to 5.1p/min and 10.2p/min (plus 15p connection fee) respectively and are capped by a regulation that ensures BT makes zero profit on call origination.

0844 and 0871 numbers are NOT considered national rate numbers. While the call might cost the same from everywhere in the country this does not make it “national rate”. You’re breaching Ofcom/CAP/ASA guidelines if you continue to make that claim.

Calls to 01, 02 and 03 numbers are charged at “geographic rate”. These also cost the same when called from anywhere in the country, distinct local and national pricing for these was scrapped by BT in 2003. For most landline users, calls of up to 60 minutes duration to any 01, 02 or 03 number anywhere in the country (except Channel Islands and Isle of Man) attract no additional per-minute or per-call cost. These calls count towards the inclusive monthly allowance. The same one hour call when made to an 0844 number would cost up to £3.12 with BT and up to £7.60 with Virgin Media. A call to an 0871 number would cost even more.

The case you quote where a BT user makes a call to an 01 or 02 number and is charged 9p/min is one where the caller is on the BT Weekend Plan (because they usually only make calls at the weekend) but then goes on to make an out-of-plan call during the week. This is a rare occurrance. Anyone that regularly makes calls during the week would be on the AnyTime plan and the call to any 01 or 02 number would therefore be inclusive. Calls to 0844 and 0871 are not inclusive and therefore push up the callers bill every time they are called.

Point (2) Mobile phones do charge a lot more for these calls, and most people would consider the charges excessive. However, even if mobile operators decided to charge the same rate as BT for calls to 0844 and 0871 numbers (thereby taking zero profit), these calls would still not be able to be included within inclusive allowances. When such a call is made on a BT line, almost all of the amount you pay for the call to an 0844 or 0871 number is passed over to the terminating telco. They use this money, “the enhanced termination charge”, to pay for the call routing at their end of the call with any excess funding a revenue share payment to the business that you called. It is this “enhanced termination charge” bundled within the overall call price for 0844 and 0871 numbers that results in the call costing more and prevents the call being included within call plan allowances. Sure, the mobile operators add a huge markup, that is obvious for all to see, but fundamentally it is the “enhanced termination charge” that is the problem.

The markup added by the mobile operators is not the premium, it is simply an excessive level of markup. The “premium” is the money passed from the caller’s telephone network to the called-party’s telephone network to the benefit of the called party.

Users of 0800 and 0808 numbers pay a call origination fee to compensate the originating telephone network for the fact that the caller is not paying for the call. This fee adequately covers the cost of call origination when the call originates from a landline. The same level of fee is also paid to mobile networks for these calls. As their call origination costs are higher, this fee does not adequately cover their costs for call origination. Mobile networks could reasonably charge under 5p/min for calls to 080 numbers, but as you say, they charge an excessive amount. 15p/min is at the low end. Some charge up to 40p/min. However, Ofcom have already proposed that calls to 080 numbers be free from all mobiles. They want to push this through, but have met stiff opposition from the mobile networks.

Of course inclusive calls are not “free”. They are “inclusive”. Where the term “free” comes from is the fact that each call made within the inclusive allowance doesn’t push the bill up any further. When considering whether a call bundle is a better proposition than paying a per-minute rate for calls, callers need to weigh up how many calls they actually make. If a caller makes three calls of five minutes each per month, then paying £7 for an AnyTime deal is a waste of money. On the other hand, someone who makes 30 minutes of calls every day would be foolish to pay for them at a rate of 9p/min. Whatever deal you take, you cannot escape the £15 line rental. You pay that even if you have a telephone which you only ever use for receiving calls.

The comparison using £20 for a call plan is invalid. You have to pay about £15 pound line rental before you make any calls, irrespective of whether you make any calls or not. For someone with no inclusive calls, i.e. paying 9p/min, if you’re including the line rental in the determination and that person makes one call of three minutes duration during the month then that call has effectively been billed at £5.03/min. In the real world, you omit the line rental from the determination and compare only the price of the inclusive call plan component with the out-of-plan pence per minute rate.

The CRD requires businesses to use numbers that are charged at the basic rate. This means numbers beginning 01, 02 and 03 where the caller pays only their own telephone company to connect and convey the call.

It quite obviously excludes numbers beginning 084, 087 and 09 where the caller not only pays their own telephone company to connect and convey the call but also pays an additional fee to the telephone company of the business that was called and which they then use to cover the call routing costs at their end of the call with any remaining funds used to reward the called business with a revenue share payment.

The CRD treats the latter case as abuse of callers and it is this type of call that it bans. It doesn’t matter whether the “premium” passed over to the telephone company of the business being called is £1 or 1p, all such calls will not be permitted under the terms of the CRD. This currently includes all calls to 0843, 0844, 0845, 0871, 0872, 0873, 090, 091 and 098 numbers. Ofcom’s forthcoming changes to non-geographic numbers are also expected to ensure that 0870 is also included in the list of unacceptable numbers.

Thank you for stating the facts Ian01.

Hi Ian, some salient point here, but interestingly you fail to address the point that it’s still the mobile phone companies that are creaming off the additional surplus revenues here and it is NOT the travel company that significantly benefits; ok how about all service provides move to 0800-toll free and you pay 15 pence plus a minute to call from your mobile (which is probably the access mechanism you’ll likely to be using when you are broken down at side of road or stuck in a traffic jam about to miss the flight / or perhaps aged under 30 year if “generation Y”). Berate me if you wish, but I am only trying to add some perspective to this debate. As the saying goings “ a rising tide floats all boats”; thus if you inhibit the use of these numbers to seek service (for what some may still consider a luxury) then all that will happen is (as a general rule of thumb) these costs will only be displaced and recouped elsewhere either in higher tickets prices or package holiday charges. Alternatively the general cost of telephony “call packages” will rise to accommodate their inclusion, which itself then discriminates against those that have no need to call a holiday firm; you know, perhaps the old, vulnerable, or on low incomes. Oh yes, thanks for highlighting the one principal we hold sacrosanct in a free market democracy – choice. So if people wish to contract with Virgin Media and pay more for their telephone calls than they otherwise would if using BT, then so be it, but more fool them. Once again this whole debate is based upon snippets of “legalese” and morsels of juicy statistics, but the fact remains that calling an 0844 type number is hardly excessive or indeed a “scam”. Also note, that alternative methods are usually put in place to handle general enquires on companies web pages, FAQ’s or via email. I guess in the extreme, perhaps you can revert the old fashioned way of booking a holiday and pop into a Travel Agent (yes they still exist)… but oh yes, you may have to pay a little extra for that kind of service!…which brings us back to where we started. “You pays your money and makes your choice”. In summary, the travel industry, on the whole, provide excellent services levels, innovative and high quality products at very high safety levels – at prices not too dissimilar we were paying 10 or 15 years ago.

You say “if you inhibit the use of these numbers to seek service (for what some may still consider a luxury) then all that will happen is (as a general rule of thumb) these costs will only be displaced and recouped elsewhere either in higher tickets prices or package holiday charges“. This is exactly what should happen!

The price of the service should cover the travel company’s operating costs. The travel company should not be charging passengers to speak to it by telephone, other than the normal cost of communication. For example, if a passenger’s baggage is delayed by an airline, why should that particular passenger have to pay a surcharge to speak to the airline about the matter? Why should the affected passenger have to cover the airline’s additional costs as a result of the airline’s failure? These incidental costs should be included in the airline’s general operating costs and consequently spread across the price of all tickets.

Clearly I am swimming against the tide on this one so will drop out and head of to enjoy the lovely autumn weather by cycling in the woods. However, a final point would be to say “be careful what you wish for”; just be prepared to have many more calls answered by Nilesh, Irfan and Katyia and much less of Nigel, Ian and Kate. Its pains me to say this, but at least our neighbours the French seem to be prepared to sometimes pay just a little bit extra bit to ensure the longevity of things that matter; like that lovely local cheese, as too that rather nice – but low volume – Burgundy or perhaps even that locally grown lavender oil. Whereas, we here in the UK appear so eager “have it now and dirt cheap” that we become blind to the secondary commercial pressures that result in us outsourcing everything merely in order to save a few quid on a bottle of plonk, demanding the right to buy denim jeans from Primark for £7 and happily consume “reconstituted meat” products from Iceland freezer centres for £1 a time. I know from experience that “Cost” and “Value” do not 100% equate – either in their direct nor intrinsic forms……..

I mentioned, twice, that the cost of calling 084, 087 and 09 numbers from mobile phones is excessive. However, Ofcom’s “unbundled tariffs” system will shortly force all phone companies to separately declare their Access Charge. This will likely lead to a significant reduction in the cost of these calls from mobile phones. However, what mobile companies charge for these calls is not the real problem, it’s only a side-effect. The real problem is the “enhanced termination fee” or Service Charge. This fee is collected by the caller’s phone company and paid to the benefit of the called party. This is what prevents the call being charged at the same rate as a call to an 01, 02 or 03 number and prevents inclusion in call allowances.

This fee benefits the called business by having the caller pay the running costs for their 084 or 087 number and pay for the final leg of the call routing. It’s irrelevant what the level of this “enhanced termination fee” or Service Charge is, it’s quite simply wrong that callers making a complaint are charged an extra fee to do so. In many cases, the extra fee paid by the caller is high enough that is also results in the business receiving a “revenue share” payment.

It’s also very odd that any business would think it a good idea to place such a barrier in the way of people that want to buy something from them. I have no problem with any company incorporating the cost of running their business within the price of the goods they sell or service they offer. This is exactly what happens with their rent and rates, electricity costs, staff wages, and many other ancillary costs. There is no reason why that shouldn’t also apply to their telephony costs.

You mention “freephone” calls being expensive from mobile phones. Ofcom has already proposed that 0800 and 0808 numbers become free calls from all mobiles, but they have met fierce opposition from at least one mobile network. With 080 calls completely free for everyone, it will be very easy for customers to contact businesses that choose to use freephone numbers. Businesses need to be aware that the running costs for 080 numbers are higher than those for 03 numbers, so this decision needs to be made with care.

However, there is no need for travel companies or anyone else to move to 0800 or 0808 numbers. They only need to move to 03 numbers so that the call cost is exactly the same as calling 01 and 02 numbers, and inclusive minutes on mobiles and landlines can be used. Ofcom has already reserved all numbers beginning 034 and 037 for each existing user of the matching 084 or 087 number to migrate. This process takes only a few days. New users can choose from a variety of 030 and 033 numbers.

Call package prices are unlikely to rise significantly. There is intense competition in this area, especially for those sold on mobile networks. Calls to 01, 02 and 03 numbers are always included. Call packages on landlines sometimes include calls to other landlines within Europe and in a few other places. Call packages on mobile phones always include calls to other UK mobile phones.

Landline call packages may go up in price by a small amount. This will be at the point where calls to mobile phones are included. BT has recently taken one step along this road. BT AnyTime now includes half price calls to mobile phones. Having “free” (inclusive) calls to mobile phones from landlines will become possible due to Ofcom’s ongoing intervention in the market. Ofcom has already forced a huge reduction in the Mobile Termination Rate over the last few years and this process is due to be completed in 2015.

Calls to 084 and 087 numbers generally cannot be included within call bundles because of the additional revenue (the Service Charge) that has to be collected from the caller and passed on the called party. Ofcom’s “unbundled tariffs” will make this position very clear.

Calls to non-geographic numbers where the Service Charge has been reduced to zero are included in call plans on landlines and mobiles. These numbers begin 030, 033, 034 and 037. Ofcom intend to confirm 03 numbers as being the only non-geographic range where this happens.

At present, calls to 0870 numbers from most landline providers and calls to 0845 numbers from BT and a limited number of other landline providers are also included within their respective call bundles. These deals are “special cases” and they won’t last for much longer.

There’s currently no Service Charge within the 0870 call price, but there will be from 2015. It is anticipated it will be around 10p/min. These numbers will no longer be inclusive in call bundles after that time.

There’s a 2p/min Service Charge on 0845 numbers. BT subsidises this from all of the monthly call plan subscriptions that it collects and allows 0845 numbers to be inclusive in call bundles. As the largest supplier of 0845 call termination for businesses, BT can afford to do this as they are effectively “paying themselves” for the vast majority of 0845 calls made. BT loses money when a BT user calls an 0845 number administered by another network, but they also make money when a caller on another network phones an 0845 number administered by BT.

Several other landline providers copy BT’s retail rates for 0845 numbers and a few of those also make 0845 calls inclusive in some of their call plans. However, they are effectively losing money by providing inclusive 0845 calls because they are having to pay 2p/min Service Charge to the destination network whenever these calls are made.

These anomalies with 0870 and 0845 call pricing will end when Ofcom’s “unbundled tariffs” come into force for all networks and when the recently-extended provisions of the “NTS Condition” are removed from BT’s retail pricing. These will both happen at the same time in mid-2015. At that point, call prices for 0845 numbers will become indistinguishable from those of an 0844 number with a 2p/min Service Charge and call prices for 0870 numbers will be indistinguishable from those of an 0871 number with a 10p/min Service Charge.

Long before this happens, the Consumer Rights Directive will have shifted the vast majority of 0845 and 0870 users over to 0345 and 0370 numbers. 03 numbers are charged at the same rate as 01 and 02 numbers and count towards inclusive allowances on landlines and mobiles. There is no Service Charge and revenue sharing is not allowed.

Virgin Media currently charge the highest for calling 084, 087 and 09 numbers. Many people sign up because they are attracted by various other parts of their deals. They are probably unaware of the high call price for 084, 087 and 09 numbers as they are difficult to look up. Tariff tables for non-geographic numbers run to several hundred pages, with each phone network producing a different version of this list. It’s not at all easy to compare various providers.

Ofcom’s “unbundled tariffs” system for 084, 087 and 09 numbers will radically change this. With a single Access Charge for all 084, 087 and 09 numbers clearly declared by each network, it will become very much easier to compare providers. Competition on the Access Charge component for these calls might actually begin to happen. That’s essential on mobile networks where consumers are currently being ripped-off on a large scale when it comes to call prices for 084, 087 and 09 numbers.

When calling an 01, 02 or 03 number, the caller pays only their own telephone network to connect and convey the call. When calling an 084, 087 or 09 number, the caller not only pays their own network to connect and convey the call, they also pay a fee that goes to the telephone company used by the business they are calling. This fee is used to pay for call routing at the business end of the call with any excess generating a “revenue share” out-payment for the called business. It is this extra fee that prevents 084, 087 and 09 numbers from being included in call packages.

At present, BT are not allowed to make profit on calls to 084, 087 and 09 numbers. When a caller pays 5.1p/min plus 15p connection fee to call the highest rated 0844 number, BT is passing on a 7p/min Service Charge to the telephone company of the business being called. BT retains nothing of what the caller paid. The “NTS Condition” prevents BT from making profit on call origination for 084, 087 and 09 numbers. This will be lifted in 2015 at the same time the “unbundled tariffs” system is introduced.

A caller may have paid for a call package and reasonably expect that all of their calls to landlines used by homes and business are included. However when they call 084, 087 and 09 numbers they are billed extra for each call. These calls are not, and cannot be (except for the current 0845 and 0870 anomalies previously discussed), inclusive within call plan allowances. Again, the actual amount isn’t the issue, it’s the fact that it is an extra unexpected amount on top of the standard bill for the line rental and call package that is the issue.

Ofcom and BIS are together performing a “pincer movement” on this much-hated aspect of Rip-Off Britain.

Ofcom’s intervention in the form of the “unbundled tariffs” system will force vast improvements in call cost clarity for 084, 087 and 09 numbers. One likely side-effect will be a significant reduction in the price of these calls when made from a mobile phone. One casualty will be 0870 numbers no longer being inclusive in landline deals. Another will be BT (and the small number of networks that copy BT) no longer being able to offer inclusive calls to 0845 numbers. However, Ofcom are also working on 080 numbers becoming free calls from all mobiles.

Several networks that have traditionally copied BT’s prices for 084, 087 and 09 numbers have recently announced price rises. Their new call price is higher than BT but not as high as Virgin Media. The ending (in 2015) of the “NTS Condition” imposed on BT might lead to a small price rise for their 084, 087 and 09 calls but will have no effect on other networks.

The introduction of the Consumer Rights Directive by BIS will force businesses to stop using all of those expensive numbers for customer service lines and instead change to numbers beginning 01, 02, 03 or 080. Mobile numbers are also permitted (because some small traders have only a mobile phone).

Businesses will include the cost of telephony within the price of whatever they sell, in the same way they already do for all of their other costs. Callers will no longer subsidise business telephony and other costs through additional fees built into high-price phone calls.

084, 087 and 09 numbers will revert to usage by businesses providing a chargeable service: subscription-free conference-calling, dial-a-weather-forecast and other such information lines, subscription-free dial-up internet, donating money to charity, voting on a TV show, paid technical-support lines and other such chargeable services.

Ian01, thank you very much for that useful and informative contribution; I very much agree with everything you’ve said. However, the end of your final paragraph gave rise to a question about technical support lines. Most technical support lines provide support for a service for which the customer is paying the provider separately, e.g. internet service providers. Therefore it would follow that technical support lines are usually “in relation to the contract concluded” (the wording of Article 21) and would consequently be prohibited from being surcharged by the regulations.

Yes, “technical support” usually comes under the heading of “customer service” but there’s the possibility that some types of technical support line might not be included.

A business could offer to help fix people’s computer or other problems over the phone. This would be for people that had bought the equipment completely independently elsewhere. Rather than take an upfront debit- or credit-card payment, or send an invoice and wait for a cheque in the post, the helpline would simply use a revenue-sharing telephone number to directly collect money from the customer. Obviously, only 09 numbers could give a return high enough to support such a business, and it would be subject to many potential customers giving it a very wide berth.

Ultimately, it’s a poor system for collecting revenue, and various stuff like this might end up being tested in court, especially if “related” companies try using this as a loophole.

Yes, Skype is great for peer to peer calls with friends, family and yes even the “outside world” of business. But you seem to forget that you originally had to buy the computer / PC and that your internet connection (via a Broadband contract) is also charged for….so not exactly free perhaps?. Also is that Skype call quality always fantastic – be honest with yourself…how about when USA “wakes up” circa 2PM GMT or when the children all finish school at 4PM….?.

On that basis, you’ll soon be saying that if I make a call from home:

“Don’t forget you had to buy that house. That also counts towards the call price”.

Just found out, you can bypass the 0844 number by dialing the standard geographic BA number 0191 490 7900 but precede it by dialing 141

So John what you are saying is that you are happy to pay the telecom company ( BT, Sky or Virgin perhaps) a fixed price irrespective of whether you use their service, whilst BA should act as a charity and as have no commercial right to recover their cost of sale or service?. Question: have you been into any town or city centre recently..? how much did the council charge you to park your car for the privilege of spending your hard earn money in those high street shops?. Mary Portas is right, EXCESSIVE (parking) costs dissuade / inhibit consumers actions and are killing the high street – whereas I think most people don’t object to paying a FAIR price to get good service ( erm, when will people tire of endlessly waiting in Costa Coffee and Starbucks for that £3 posh coffee!)

“Acting as a charity” is a ridiculous comment to make. BA charges for its flights; it does not provide them for free or in any other charitable way. If a customer has a legitimate complaint, problem or other reason to speak to BA by telephone, why should they have to pay a surcharge above the cost of a normal phone call in order to do so? The caller should pay only the cost of the communication, and not for any additional charge for BA’s profit.

There are many reasons one might need to speak to BA, for example technical problems making a booking on the web site (something that has happened to me several times), tracing baggage lost by BA or a complaint about poor service. In none of these cases is it reasonable for the customer to pay more than the cost of a normal phone call.

“Informed Insider” – you have a very misinformed view of consumer rights and unfair commercial practices.

Please read my response to Ian above. Lets not make this personal. I am only trying to add some perspective here using a vocabulary that most will understand.

It’s not about making it personal. I don’t understand your point about “charity”. Please explain what you mean.

Although it’s not 100% customer-friendly, I don’t have a problem in principle with international companies not providing a local telephone number in each country. Unlike the 084/087/09 intra-UK problem, the issue here is with the telephone companies, not the travel companies. The cost of a telephone call is not its distance, but the termination rate charged by the destination telephone network. Termination rates are similarly low all over the EU, so it shouldn’t cost any more to call a Netherlands fixed line than to call a UK fixed line. Consequently many UK fixed line telephone companies fairly charge EU calls in the same way as UK calls. The problem is that some UK telephone companies, particularly mobile networks, unreasonably surcharge for calls to other EU countries. A travel company should not have to set up telephone numbers in each EU country because of unreasonable arbitrary surcharges made by telephone companies. Fortunately, along with its proposal to abolish roaming charges, the European Commission is planning to force telephone companies to abolish cross-border surcharges so that a cross-border call within the EU should be priced at the same as a domestic call. Therefore this problem should be eliminated at some point.

Something is being done.

The Consumer Rights Directive comes into effect in June 2014 and bans the use of 084, 087 and 09 numbers for customer service lines. The draft regulations were published in August 2013.

A final push is currently being made to overturn the proposed exemption of passenger transport and to convince the Financial Conduct Authority to extend the regulations to the financial sector.

Transport for London moved from 020 7222 1234 to 0843 222 1234 a couple of years ago and that provoked a storm of protest.

They have recently moved to 0343 222 1234.

Jet2 have now changed their expensive 0871 and 0906 telephone numbers to cheaper 0800 and 0333 numbers.