Friday, 13 June 2014

The DSR is dead, long live the CCICACR!!

Today's the day...

The familiar Distance Selling Regulations repealed, and now we have The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which came in to force today.

I have already complained to my bank over their 0845 customer service number. Not sure if 0845 is "basic rate" or not. I see Sky still have an expensive 0844 customer service number.

Section 41 says: Where a trader operates a telephone line for the purpose of consumers contacting the trader by telephone in relation to contracts entered into with the trader, a consumer contacting the trader must not be bound to pay more than the basic rate.

No idea what basic rate is, but really you would have hoped people would be a tad more aware of laws like this in advance. They have had 6 months to sort this.

What is interesting is the enforcement. Apart from relevant authorities having power, we also have options for civil enforcement which are perhaps more useful than some other regulations. In this case: If in those circumstances a consumer who contacts a trader in relation to a contract is bound to pay more than the basic rate, the contract is to be treated as providing for the trader to pay to the consumer any amount by which the charge paid by the consumer for the call is more than the basic rate.

So, it becomes part of the contract to pay the extra cost back to the consumer. That could be deducted from payments, reclaimed, or sued for... What fun.

That is all before we consider the serious implications of not having an "order with obligation to pay" button for your on-line orders.


  1. 0845 and 0844 are included as far as I know.

    Basic rate is defined the accompanying guidance. Geographic, 03 and mobile 07 (surprisingly) are compliant.

    0800 is not compliant (technically) until it's free but the BIS guideline are that these are to be considered compliant.

    All revenue sharing numbers, starting 084, 087 and 09 are prohibited. Whilst 087 is not revenue sharing today, it will be in 18 months’ time and BIS have considered it to be non-compliant immediately as a result.

    1. I was under the impression that 0845 and 0844 were typically paying out some revenue (else why the hell would people still be using them?). Oh well.

    2. Would 0845 and 0844 not fall under 084 ?

  2. Technically even 01,02,03 numbers are revenue sharing as the receiving telco receives revenue when they receive a call to one of these numbers although the figure is very low. 0845 is revenue generating but the amount of revenue is low and just about covers the cost of redirecting the call back out to a geographic number so these are not typically revenue generating from the customers perspective.
    Although 0845 is technically not basic rate its normally charged at or cheaper than a regular call to an 01 or 02 number and more and more operators are including them in their call bundles. Ofcom are gradually reducing the rebate for these numbers.
    With regard to your question why companies are still using them its probably because its not costing them anything and people are still familiar with them. We have experimented with giving people 03 numbers instead of 0845 which is guaranteed to be included in bundled minutes but these numbers still get fewer calls when we switch to them so people are still on average more reluctant to call them than an 0845.

    1. "Although 0845 is technically not basic rate its normally charged at or cheaper than a regular call to an 01 or 02 number"


      It's FOUR TIMES the price of a geographic call on my landline! The actual underlying costs are much higher too, so where on earth is it "at or cheaper" the less expensive service of regular geographic calls? Maybe for someone getting ripped off on regular geographic calls the prices happen to match, and it seems BT are cross-subsidising those calls for some reason. Hence I was so delighted to see the ban on the 084/087 scam numbers.

      I know 03 numbers are still less familiar to people at present, but I have long made a point of avoiding businesses using 0845 numbers (or worse). Maybe too many people are still falling for the lie that 0845 is "local rate" then get a nasty shock when their bill arrives?

    2. You need a new Telco - pretty much everyone respectable has been including 0845/0870 for some time now.

    3. The interconnect prices are much higher so real reason for retail prices to be the same.

    4. Backup Exec Goat, as RevK points out the underlying costs are dramatically different - so if they are the same retail price on your package, either you're getting ripped off on ordinary calls, or they're losing money on calls to the expensive numbers and presumably making it up elsewhere. I don't think either strategy counts as "respectable"! Apart from anything else, since you're posting on RevK's blog, implying his call charges are not respectable (like any genuinely respectable business, they reflect these costs, making 0845 several times the price of regular calls) doesn't seem very polite:

      (The bizarre pricing system gave BT a unique vested interest in forcing the average retail price of 0845/0870 calls down as far as possible, because the wholesale price they have to pay recipient telcos was based on BT's retail price. Presumably that's why they took the short-term hit of pricing 0845 like the much cheaper calls.)

  3. The 08 numbers seem to be clear as mud these days.

    0800 was supposed to be free, except for some reason mobile phone companies are an exception and usually charge these at standard rates.

    0845 was supposed to be "local rate" (back when there was a distinction between local and national geographic calls), but again, mobile companies seem to have made an exception here and have always charged them differently to actual geographic calls (e.g. frequently you can't use inclusive minutes for 0845 calls).

    0870 was supposed to be "national rate", but again it often seems to bear absolutely no resemblance to geographic rates these days.

    The 0844 prices seem to be all over the place too. We originally opted for providing 0844 customer support numbers because they were actually cheaper than 0845 during the hours we expected to get the most calls (but way more expensive outside those hours). I suspect that's no longer true though - I guess we should think about changing.

    1. 0844 numbers are split into 1000 or 10,000 number blocks with the owning telco able to set a different rate for each one. Depending on the rate a BT user could typically pay between 2.5ppm and 13ppm for a call. Other providers can and usually always do charge more. for some more information
      If you want a number which is cheapest to call but not freephone then an 03 number for people with inclusive minutes or an 0843/0844 with a ff29 fixed call cost are probably the cheapest.

    2. The root problem is that the original 0845 and 0870 prices were set based on the underlying wholesale cost of the call, versus BT's retail price: where BT charged 5p/min for a local call and a long distance call actually cost 2p/min, on 0845 they gave most of that markup to the call recipient instead.

      Personally, I wish Oftel (as it was in those days) had set the pricing based on 'retail price differential', rather than the 'deemed retail price' they actually used - i.e. an 0870 call would result in a payment of 0 to the recipient, since it's being charged at the same rate a regular long distance call would be, with an 0845 one costing the recipient a small amount (to subsidise the local versus long distance price). Much fairer - less profitable for recipients of course, and no "Freeserve" or copycat ISPs milking per-minute charges that way. Of course, I also wish they'd never opened the 0843 and 0871 number ranges (leave premium rate services on 09 where they belong) and set 07 termination rates the same as landline...

      Gareth: ff29 costs *nine times* as much as a geographic call on my landline - and of course any would-be caller will have absolutely no idea how much you're charging them to call you without looking it up. (For that particular charge band, I'd be cheaper with BT - who only charge slightly more than four times as much as I pay for landline calls. Still a ripoff which guarantees not getting me as a customer.)

  4. The "basic rate" definition covers geographic numbers, geographic-rate numbers, standard mobile numbers and numbers which are free to call from both landlines and from mobile phones.

    That means 01, 02, 03 and standard 07 mobile numbers already comply. It also means that 080 numbers will comply from June 2015 when they become free calls from all mobile phones.

    It also means 084, 087 and 09 numbers do not comply, and neither do 070 and 076. The jury might still be out on 055 and 056 numbers, but it is of little or no consequence.

    In general, the prefixes which count as "basic rate" are those which can be inclusive calls on all landline and mobile networks. Calls to mobile phones from other mobile phones are already inclusive for many people and could easily become inclusive calls from landlines when the MTR drops below 0.5p/min in April 2015.

    Since 080 numbers are not currently free when called from mobile phones, users of 080 numbers are recommended to run an 03 number in parallel until June 2015. At that point, a decision as to which number to keep, 080 or 03, may have to be made.

    When calls to 080 numbers eventually become free from all mobile phones, the per-minute usage costs will rise dramatically. Users of these numbers will pay an increased call origination fee. Users are also likely to be receiving a lot more incoming calls. However, and of note, many of those callers will have inclusive calls available. They could have called an 03 number at no incremental cost, a number that also has much lower running costs for the user. Some businesses may decide to scrap the 080 number and keep only the 03 number. Some may keep both.

    The BIS regulations that came into effect today cover retailers, traders and passenger transport companies. It is down to a different regulator, the FCA, to produce the requisite regulation for the financial sector. This should happen early in 2015.

    However, even without regulation in place, several banks have already moved to new 03 numbers, several have partially completed their move and several others have signalled their intention to move. In some cases, new 034 and 037 numbers exactly matching the existing 084 and 087 numbers are working but have yet to be officially announced.

    The introduction of Ofcom's "unbundled tariffs" system, expected in June 2015, will bring better price transparency to 084, 087 and 09 calls. It will especially make it very clear the caller is paying both their provider and the company controlling the non-geographic number. The onwards payment occurs irrespective of whether anything is subsequently paid out to the user as revenue share.

    In many cases, the revenue goes towards paying for services or for equipment or gives them a discount on their telephone bill. This leads many users to, quite truthfully, declare they "do not receive a payment" or "do not make a profit" from these numbers. However, it also completely ignores the fact they always receive a financial benefit even if it doesn't actually appear as a figure in their accounts.

    1. Regarding the origination rate for 0800 calls going up when called from mobiles it will be interesting to see what carriers do. The increased origination rates already apply for calls from payphones and the vast majority of our customers have chosen to not accept the calls. The same may well happen for mobile originated calls which defeats the whole purpose.

  5. Sky have got 03x numbers and are slowly updating their site. There should be messages on the 084 numbers advising customers of the new numbers.

  6. Can you offer a voip service that charges a fixed rate of £100 for calling 0845 numbers... and a prompt payment discount of £100?

  7. It seems a little unfair to lambast your bank for failing to comply with these new regulations, seeing as they don't apply! f7e6...471e's long comment above makes a reference to this, but for avoidance of doubt regulation 6(1)(b) explicitly says:

    "These Regulations do not apply to a contract, to the extent that it is for services of a banking, credit, insurance, personal pension, investment or payment nature"

    It will be interesting to see whether your bank realises this when dealing with your complaint...

    1. Wow, I stand corrected. Thanks for the information. Seems odd banks are allowed to use expensive customer service numbers.

    2. It's still entirely legitimate IMO to complain about the bank using a premium rate number most other businesses are now prohibited from using, despite the existence of this loophole for banks: the reasoning behind banning 'traders' from doing this is just as valid for banks as well, it's just they're governed by different regulations which presumably haven't been updated to ban 0845 - yet. Let's hope that changes soon.

      (Of course, I also have a complaint in to Sky about failing to provide VAT receipts to business customers they acquired through Be: they did cough up the MAC within the deadline for those, but no sign of VAT receipts yet...)

    3. I get really annoyed every time I read posts on a site stating 0845 is cheap or free commonly, it is not. The BT low prices for 0845 are an exception not the norm, that exception is soon to come to an end. Plus I know hardly any contracts that include 0845, 0845/0844 is typically treated as a premium rate number which in reality it is.

      It really baffles me there is people today who still think 084x is as cheap as a proper geographical number, they really have been misled by some sales guy, who probably got their company to start using those numbers.