Out-Law News 2 min. read

Premium rate regulator warns business partners of 070 scammers


The premium rate phone regulator has warned that it will take action against companies that facilitate fake-mobile scams as well as the companies directly behind them.

PhonepayPlus has said that the numbers of complaints about scams involving 070 numbers has risen throughout the year to a peak of 99 complaints in September. It levied a £250,000 fine against one 070 scam operator earlier this month.

Premium rate phone regulator PhonepayPlus said that it will automatically investigate any firm whose network operator services are used to facilitate the scam.

PhonepayPlus has warned of the scam in the past, but the numbers of complaints indicate that it is still being perpetrated. In May it received 50 complaints about 070 scams, a number which rose to 99 by September. Complaints dropped to 64 in October and 53 in November.

PhonepayPlus has said that it will take firm action against companies that help scammers to cheat users. Service providers are the companies which directly operate premium rate number services, while network operators connect them to phone networks.

"Where any service provider is found to have breached the Code through misuse of 070 prefixed numbers in a clear attempt to scam consumers, PhonepayPlus will automatically initiate an investigation into the network operator associated with that service for lack of due diligence," said PhonepayPlus.

The regulator has recently taken action against operators of 070 scams, fining service provider Starwire Limited £250,000 over 27 complaints of abuse of a 070 number.

PhonepayPlus has also initiated emergency proceedings against four operators of alleged 070 scams. It has blocked access to the numbers associated with the four operators to protect phone users while it conducts its investigations.

The regulator also said that network operators could be liable for fines levied on service providers.

"Where a service provider fails to pay a fine and/or administrative charge and a network operator is found to be in breach of the Code through poor due diligence, the Tribunal may include within any fine sanction imposed on the network operator, the entire fine and/or administrative charge amount owed by the service provider," said PhonepayPlus. "The Tribunal may also impose other sanctions on the network operator  for its failure of due diligence."

The 070 scams exist because numbers beginning 070 are very expensive to call. In one of the cases investigated by PhonepayPlus callers were charged a 50 pence connection fee and £3.95 per minute to call the numbers from a landline, and potentially more from a mobile phone.

They work by automatically ringing phones but hanging up after a single ring. Users see a missed call notice on their phones and assume that numbers beginning '07…' are mobile phone numbers.

Many return the call to see who has phoned them and incur the call charge. Some of the services investigated by PhonepayPlus play a recording of a ringing phone to keep users on the phone for longer periods so that they incur higher charges.

The 070 numbers are not intended to be numbers on which operators can share call revenue, and are intended as numbers which allow someone to be reached on whatever phone they are using.

The problem became so serious that telecoms regulator Ofcom had planned to move all 070 numbers to the 06 number range to avoid confusion. In October, though, Ofcom shelved those plans.

"Since our review of telephone numbering in 2006, the number of complaints has significantly reduced and we have found that the use of 070 appears to be declining," said an Ofcom report. "Closing the 070 number range as previously intended is not a proportionate response."

Ofcom said that the complaint numbers peaked in 2005.

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