Ofcom to review premium-rate rip offs

Communications watchdog Ofcom is to review powers held by regulators to help in the battle against rogue diallers.

Ofcom will assess whether the powers granted to the Independent Committee for the Supervision of Standards of Telephone Information Services (Icstis) - the industry watchdog for premium-rate telephone services - need strengthening, and whether the regulatory framework needs to be overhauled.

The review was sparked by the growing problem of rogue diallers: software that downloads itself onto people's PCs to change dial-up connections to premium-rate numbers.

In the past few months Icstis has received hundreds of complaints about rogue diallers. In some cases, consumers have been saddled with bills of up to several hundred pounds.

Icstis also wants Ofcom to review its powers to deal with companies who spam mobile phone users and trick them into calling premium-rate lines.

Ofcom has been in close talks with Icstis, the Department of Trade and Industry, the Telecommunications Ombudsman, and network and service providers about the growing menace.

Overlapping responsibilities between different types of regulator across the European Union and the rest of the world further complicates the problem.

Even when Icstis has been successful in shutting down rogue companies, they pop up again under new names, renting new premium-rate numbers.

"We need to know if the network operators [who rent the premium-rate numbers] are complying with the regulations. It may be that other bodies such as Ofcom - or even the information commissioner in the case of mobile spam - should take on some of these issues," said a spokesman for Icstis.

"[The review] will also investigate if there needs to be a change in the way the providers of these services are paid by the network operators. Some of these service providers get their money in three days; the review will look at the possibility of making the billing time longer, say 45 days.

"Also there is the question of network operators making sure money is held back to compensate consumers."

There has been some progress towards eradicating the problem. BT decided voluntarily in June to block traffic to premium-rate numbers believed to be associated with rogue diallers.

Icstis, which wants further co-operation from network operators, has also announced plans for new rules requiring premium-rate providers to pre-register with it before they can offer internet dial-up services.

The review will last until the end of September. Ofcom said any changes to the regulatory framework or Icstis powers that the review may suggest will then be put forward for consultation.