In a very welcome announcement, telecoms watchdog Ofcom has capped the cost of calling directory enquiries numbers including the omnipresent 118 service. Ofcom said the price cap will come into force in April 2019.
Directory enquiry prices have risen in recent years, and callers are paying much more than they expect. Our evidence shows this is hurting people, with some struggling to pay their bills.
We’re taking action to protect callers by capping 118 prices. This will significantly cut the cost of many calls and bring them back to 2012 levels.- Jane Rumble: Director of Consumer Policy, Ofcom
Ofcom estimates that more than 450,000 people are paying £2.4 million in total more than they expected for these calls. Ofcom has therefore decided to cap the maximum amount a 118 service can charge at £3.65 per 90 seconds. Bringing costs to 2012 levels and much closer to what we should expect to pay.
During its research Ofcom found that some services were charging up to £20 for an average 90-second call and the 118 service averaged at £11.23 for a 90-second call.
The Number UK, the owner of the brand name 118 118 accounted for the largest volume of directory enquiry calls in the UK, accounting for 40% in total, while BT has a market share of between 20% and 30%.
Ofcom found nine directory enquiry providers across the UK that have a 118 number with published service charges of £15.98 for the first minute of the call and £7.99 for each subsequent minute.
The number of calls made to 118 has been falling every year. Ofcom estimated the calls made to 118 numbers had reduced from 7.14 million in the third quarter of 2014 to 1.95 million in the second quarter of 2017, an average fall of 26% per year.
118 operators have been losing customers since their heyday as use of the internet for everyday inquiries has become the norm, and the reaction of some 118 services has been to increase charges for their limited customer base.
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.- Richard Neudegg: Head of Regulation, uSwitch.com
Ofcom found that four-in-five 118 callers say it is still important to get hold of a number they need at the time they call a directory enquiry service. This is particularly true for people aged 65 and over who are four times more likely to call 118 numbers than those aged 16-34.
The research revealed that two-thirds of 118 callers didn’t know how much calls cost and 8% experienced problems with affording the costs. Some relating they had either cut back on other expenditures, borrowed money from friends and family, delayed payment or defaulted altogether.
118 numbers were introduced back in 2003 by the then government body Oftel and was opened out to competition with a wide range of competing 118 services. The most successful has been the 118 118 service, fronted by an aggressive ad campaign featuring two male runners with 70s style moustaches.
118 118 is the brand name of The Number UK, a subsidiary of US directory inquiries provider Knowledge Generation Bureau, based in New York. The firm has more than 7,000 staff and operates services in France, Switzerland and Ireland.
Image: 118 118 via BBC