Ofcom to cap directory enquiry costs
The elderly, who make far greater use of directory enquiry services, were disproportionately affected. Overall 2% of adults (equivalent to one million people) use a 118 service, but this rises to 4% of those aged over 65.
Ofcom is to cap the maximum amount a 118 service can charge at £3.65 per 90 seconds.
The group found that competition wasn’t working effectively: while there were cheap directory enquiry services available, people tended to call the number they remember most easily.
Ofcom said consumers don’t know how much calls cost and say they have no alternative. It found that 65% of users said they did not know the cost of calling a directory enquiries service when they last called and 40% of users said they had no alternative options to using these services at the time of making the call.
It added: “The most well-known DQ service is 118 118 and its prices have risen four-fold for a one-minute call since Q4 2012. It now costs £8.98 for any call up to one minute in length, and £13.47 for a two-minute call.”
The number of calls being made to 118 services has been falling by around 40% every year. The new price cap of £3.65 per 90 seconds will come into force on 1 April, 2019.
Richard Neudegg, head of regulation at uSwitch.com, said: “The fact that these numbers are mostly used by the elderly and more vulnerable consumers who might not readily have access to the internet means it’s right the regulator steps in.
“118 operators have been losing customers since their heyday as use of the internet for everyday enquiries has become the norm, and the reaction of some 118 services has been to increase charges for their limited customerbase.
“By capping these calls at £3.65 per 90 seconds from next April, Ofcom has put a restriction on excesses. This is a clear signal that there is a limit on how much providers can recoup operating fees by hiking costs to a dwindling number of users, who often are unaware of the charges.”