Charging Premium Rates for Free Information

September 16, 2009

PhonepayPlus, which acts as the agent of Ofcom in the regulation of phone-paid goods and services in the UK, has shown its concern about a string of complaints where users have found themselves paying premium rates for information which is available for free. Moreover, a number of complaints have been upheld about the use of .org suffixes for web sites where the general assumption that the site is the product of a charity or not-for-profit organisation has proved very wide of the mark.
What concerns PhonepayPlus are ‘public information services’ that are in fact premium rate phone-paid services providing information or advice which is also, or mainly, available from another, free, source provided by a government department or other publicly-funded body.
These services often pay to be optimised by search engines (such as Google or Yahoo!) causing their weblink to appear at the top of the list of matching sites and, since a consumer searching for information or advice might be more inclined to click the first option displayed rather than a public website which provides the same information or advice for free, that exacerbates the problem. As some of the services are aimed specifically at consumers who are likely to be experiencing financial hardship (eg recipients of welfare benefits), the effect of extra charging can be greater than in some other contexts, especially as some information and/or advice services that carry a premium rate charge use operators who are untrained or unqualified to provide advice.

The official notice from PhonepayPlus reads as follows:

‘1.     Where a Public Information Service provides information or advice that is substantially derived from, or based upon, information or advice that is provided by a publicly-funded organisation at no cost, and then providers are strongly advised to ensure that consumers are aware of the free alternative(s) in a clear and straightforward fashion.  The existence of a free alternative should be prominently presented on websites, so that the consumer does not have to scroll down to become aware of it, and on any other promotional material.
2.     We acknowledge that there are some occasions where a Public Information Service might give helpful information or advice beyond that given by a free alternative.  In these instances,  the existence of the free alternative should  be clearly and prominently provided (as set out at point one), but are content that any added value offered by the paid-for service may also be highlighted, provided the value is not exaggerated.
3.     Public Information Services should not be promoted on a website which uses the suffix ‘org.’ in its address, unless the promoter is a not-for-profit company limited by guarantee, or a registered charity.  Any Public Information Service which does so is at risk of being found in breach of misleading consumers by a PhonepayPlus Tribunal.
4.     Public Information Services should not be promoted to a target group of consumers who are, or who are likely to be, experiencing material financial hardship.  An example of this would be information or advice about means tested benefits, or information or advice aimed at a group of consumers who have suffered financial loss or hardship as a result of a recent event which is in the public eye.  It is likely that any Public Information Service which does so will be found in breach of paragraph 5.4.1b of the 11th edition of the PhonepayPlus Code of Practice.
5.     Services offering to provide contact details for a government, or other publicly-funded, body should do so at the beginning of a call, and without confusion or delay.  Providers should note that PhonepayPlus has previously defined any period of greater than 15 seconds during which a caller to a 09 number is placed on hold as being unreasonable delay.
6.     Operators providing advice must clearly state any relevant qualifications or experience at the start of the call.  If operators do not have any relevant qualifications, then the source of the advice they are giving must be made clear to the consumer.’

The main issues, and the related relevant Code of Practice provisions, are identified by PhonepayPlus at :