Research reveals need for greater price transparency in 087 services

New rules for businesses apply from 1 August
Research released today by PhonepayPlus reveals a lack of understanding around charges for 087 numbers amongst consumers, and supports the need for introduction of new regulation to boost consumer confidence.  From 1 August, providers of 087 services (numbers beginning 0871, 2, and 3, but excluding 0870) must comply with new rules set out by PhonepayPlus.

Key findings from the research
Market overview:

• One in three people in the UK are likely to have called an 0871 number in the last six months.
• The overall market size for 087 numbers is estimated to reach £85 million in 2009. This represents a decline over 18 months, due largely to uncertainty around regulation and general consumer resistance to numbers beginning 087.
• 40% of revenue comes from calls from mobile phones, although this only equates to 13% of total minutes.
• The 087 number range is used by both large and small businesses, across all sectors, and is particularly popular amongst everyday services such as travel, ticketing, insurance and retail.
• 40% of businesses choose 087 numbers for the revenue share opportunity, and 8% to deter phone sales and drive customers to their website.
• The total volume of calls businesses receive via 087 numbers is estimated to be 731 million minutes in 2009.

Consumer feedback:

• 44% of 0871 callers have either made a complaint about or had an issue with an 0871 service in the past 6 months.
• Lack of understanding on price: When asked how much an 0871 call costs, one in three users said they do not know and 40% were unaware of the additional cost of calling from a mobile.
• Delays are a significant annoyance to callers: 70% of callers said they would complain if kept on hold for more than 10 minutes.
• Complaints: Customers cite problems with customer service and automated menus.

New rules for 087 services providers
On 5 February 2009 Ofcom announced the outcome of a review of the 0871 number range, which contained a package of measures to improve consumer protection and pricing transparency. Ofcom decided to make 0871 numbers subject to premium rate regulation as defined by the PhonepayPlus' Code of Practice.

On 13 November 2007, PhonepayPlus published a Statement of Application for the regulation of 0871 numbers, which explained how it proposed to apply the existing requirements of its Code of Practice to services offered on the number range:

• Pricing transparency: Up-front information on the cost per minute of the call must be published prominently next to the number wherever it appears on adverts, websites or signage from the business providing the service. For an initial time period to help businesses implement the changes, it is acceptable for the charges to be clearly stated at the start of the call.
• Undue delay: The 087 service provider must ensure there is no unfair delay in a caller accessing the service on offer. Callers must be given an estimate as to how long they can expect to wait before accessing the service, and if appropriate, their position in the queuing system so they can make an informed decision as to whether to remain on the line.

Commenting on the research, Paul Whiteing, CEO of PhonepayPlus, said: "Consumers have made it clear that pricing for 087 services must be easier to understand. They must also be able to make an informed decision as to whether to stay on the line."

"Our experience regulating other premium rate services will ensure the necessary safeguards are in place to boost consumer confidence in 087 services. We expect this regulation to be a boon to industry and consumers alike."

To view the full research document click here