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EU to ban excessive hotline charges (Read 9,883 times)
allegro
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EU to ban excessive hotline charges
Dec 23rd, 2011 at 8:32am
 
In this news item about card charges: http://www.bbc.co.uk/news/world-europe-15260748 there is:

Quote:
...those with telephone hotlines will only be allowed to charge customers basic call rates.


Whatever that means. The cynic in me says it will be handled as well as GPs using 08xx numbers.
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Barbara
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Re: EU to ban excessive hotline charges
Reply #1 - Dec 23rd, 2011 at 9:41am
 
That is extremely interesting and I for one would appreciate it if one of the forum members with greater knowledge & expertise could confirm if it actually means what it says, (the wording is quite clear but is the BBC's interpretation correct - if it is who says the EU is a bad thing?!)
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Barbara
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Re: EU to ban excessive hotline charges
Reply #2 - Dec 23rd, 2011 at 9:47am
 
Further to my previous post,there is also a link (blue - new European rules) to this from another BBC news story "Excessive card surcharges will be banned" says Treasury" which reports "an end to customer service lines being charged at a premium rate, although it remains unclear whether technical support services will be able to do so".   If this is correct, it would be a huge move forward.
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SilentCallsVictim
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Re: EU to ban excessive hotline charges
Reply #3 - Dec 23rd, 2011 at 9:51am
 
This is excellent news, as it directly addresses the issue which presents a problem for Ofcom.

Once Ofcom has clearly defined which numbers are charged at "basic call rates" - its proposed definition of "geographic", as against "business" and "premium" rate, does this perfectly - it can then be a matter to be addressed by general consumer legislation and regulation to prevent improper use of the latter two.

This avoids the problem that Ofcom would have in itself regulating the use of business rate numbers (084/087) through PhonePay Plus.

It is the specific definition of "Business Rate Numbers" which would have enabled the rules imposed by the DH to be clearer.


Application of the "unbundled tariff" would help further and this also addresses a separate issue covering the level of charges for calling Premium Rate Service numbers.


Users of Business Rate numbers are not providing a paid-for telephone service (the market for which PhonePay Plus is the self-regulator), they are indirectly applying a surcharge to help cover their costs. It is therefore right that this be addressed through the mechanisms which regulate their actual business relationship with their customers.

When it is seen that use of Business Rate numbers is prohibited for contact in relation to commercial arrangements, it would be unthinkable for public bodies to exploit the fact that their relationship with their service users is not commercial in order to impose a charge for telephone contact.

All that Ofcom needs to do is to clearly define which numbers should be considered as being subject to a surcharge. With such a definition in place, the OFT, trading standards, industry regulators and other bodies can apply the terms of the EU Directive. In some cases this may have to await primary legislation in the UK parliament, but that is not necessary in all cases. The UK government has approved the Directive, through the Council of Ministers. As soon as Ofcom has provided us with the clear definitions, implementation can begin.


Cynicism is fully justified. There is however no reason why that should not simply mitigate an essentially positive approach.
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SilentCallsVictim
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Re: EU to ban excessive hotline charges
Reply #4 - Dec 23rd, 2011 at 10:11am
 
I had drafted my comments before reading Barbara's questions.

Whilst the principle of paid-for services by telephone remains, I cannot see how this could not be used by those who wish to provide the additional benefit of technical support services. Users of some products and services may find this to be helpful in connection with their use of a product or service.

The problem arises when it is arguable about whether the issue being addressed is about the service itself or some related matter. If I cannot get online because of a problem with my computer, I may appreciate the assistance of my ISP in resolving that problem even though it is not its responsibility. I cannot however be expected to pay to report the fact that its network has gone down.

This new Directive may prompt the appropriate industry regulators to define how far the provider of a product or service must go in conducting diagnosis of a problem, before offering me a paid-for service. I do not see this as necessarily being an issue for Ofcom, which is only responsible for regulating the properly paid-for service. The scope of the service for which one cannot be charged a premium must ultimately be a matter for general consumer legislation and regulation as it is a vital issue of consumer rights.

That is however not to say that PhonePay Plus, in setting standards for the industry which it represents, cannot lay out guidelines about the point where paid for services should start. The key issue is however that the ultimate remedy must be through the consumer rights channel with reference to the original contract, not in relation simply to the charge for a telephone service.
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Barbara
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Re: EU to ban excessive hotline charges
Reply #5 - Dec 23rd, 2011 at 10:33am
 
Thanks for that, SCV.   The first sorts of thing which came to my mind were after sales services eg you can calls Sales on a geo or 0800 number but if you have a problem with an appliance & need advice or a service call it's an 084 number which is one of my particular bugbears, after all I'd be paying for the call out & if the item has failed under guarantee why should I pay to tell them of their failings?  Then there's insurance cos, geo/0800 for Sales, 084 for claims.  The other big one would be banks/financial institutions - surely they could not justify the continued use of 084 numbers for customer contact?  From my reading of the reports, all these would be covered by the new regs, what are your thoughts?
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Re: EU to ban excessive hotline charges
Reply #6 - Dec 23rd, 2011 at 12:05pm
 
It may sound too good to be true, but I believe that we are very close to a resolution of this.

As always, it will be complicated, it will come through various channels and there will be ugly exceptions.

On seeing this report of the Directive, I am inclined more strongly now to think that Ofcom will be seen to have changed its mind about 0845. Twelve months ago it said that demand for the revenue share on 0845 was strong and so it should be retained as a "Business Rate" range, rather than treated as another 03. This had the advantage of being very tidy.

I always had my doubts about whether demand for revenue share from existing 0845 users would be sustained in the context of unbundled tariffs - would they want to impose a service charge if they had to declare it. The essence of the Directive is that a very large number of current 0845 users would be forced to migrate if revenue sharing was retained. For this reason, amongst others, I now expect that Ofcom will now declare that (from some long future date) revenue sharing will be prohibited on 0845 and regulations will be imposed so that call charges may not be any greater than those for calls to geographic numbers.

This makes the possibility of 0844/3 being defined as PRS and handed over to PP+ (joining 0871 etc.) more likely. The unbundled tariff regulations would apply to this along with other PRS ranges. The question of whether or not there is adequate valid demand for use of such a range, in the context of the Directive, remains open.

Treating 0845 differently from 0844/3 is much less tidy, but it has many advantages. Most notably, it would recognise that the majority of current 0845 users cannot continue as they are and would avoid them having to go through number changes as a result of the Directive. There may be some who would migrate to 0844/3 or 0871, but to do so in the light of the Directive and with the reason clearly understood, they would be readily open to criticism from customers. Those seen to be making the change quickly, ahead of legislative enactment of the terms of the Directive, would be open to particular criticism.


The fundamental purpose of the Ofcom project is clarity. The Directive effectively compels it to leave no doubt about which number ranges are charged at the "basic rate" (i.e. without revenue sharing or a "Service Charge"). Ofcom has clearly laid out its proposals to do this, by removing the confusion that has remained around the 084 range, since it was largely dealt with for 087.

The anomalous messy situation of 0870 will have to be resolved. If 0845 is to be (properly now) set back to be "geographic rate" then 0870 could go the same way, completing the journey on which it started in 2009. Ofcom's preferred approach of withdrawing the range altogether would be much tidier.


The issue of "who is covered" is addressed in two ways. If a number is clearly known to be a "Business Rate" number and subject to a declared "Service Charge", then it would not be easy to offer such a number in a context where it was clearly inappropriate. So long as the potential for misrepresentation was removed then most organisations would cease doing this, without the need for enforcement action.

There will always be those at the margin who step over the line drawn by regulations and there is also the danger that the necessary regulations will not be adequately drafted or enforced. For now, I am concerned that the general position is clearly defined and understood. It is illegal to break into someone's home and steal their belongings - most of us understand this and comply - however that does not mean that it never happens.

To continue the analogy, it is right that burglary is covered by our right to own property and not have our homes entered unvited. This is much better than it being seen as a breach of regulations covering the use of locks and other means by which the integrity of our homes is secured.


There is one small point on which I will take issue. Any form of contact with an organisation may cause one to incur costs. We pay for our telephone lines, computers, internet connections, postage stamps and travelling costs when visiting in person. There may be particular circumstances in which it is right for one to be reimbursed for these expenses. These are however not the same as those in which it is improper for the organisation to itself levy a charge (perhaps indirectly) for making contact.

I believe that it is dangerous to oppose the improper use of Business and Premium rate telephone numbers by suggesting that contact should be at no cost to oneself. This is so easily countered that one can end up in a silly argument about pennies here and there. It is the principle of the "Service Charge", indirectly imposed by the person one is contacting and to their financial benefit, which I see as being the point at issue.

I recognise that there may be some particular cases where it is appropriate for the person contacted to meet all of the costs of the person making contact. I would however always take care to keep these separate from the general argument. I would also suggest that in such circumstances it is generally appropriate for this arrangement to apply to all those who make contact and all of the potential means by which they may do so. Offering a 080 number for the benefit of landline telephone callers does not fully address the issue.
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SilentCallsVictim
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Re: EU to ban excessive hotline charges
Reply #7 - Dec 23rd, 2011 at 12:55pm
 
To maybe help those who are confused by news coverage of related issues.

It appears that the Treasury is planning to move swiftly to implement one of the provisions of the Directive - that covering credit card charges. Consumer legislation would normally be the responsibility of BIS, indeed we may find that this is where it ends up.

The story seems to lack any reference to the EU Directive, suggesting that this is purely an initiative of Mr Osbourne, rather than having anything to do with Mr Cable (or one of this ministers) having signed the Directive.

Ho Ho Ho ... peace and goodwill to all men, except between members of the coalition cabinet!
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Re: EU to ban excessive hotline charges
Reply #8 - Dec 23rd, 2011 at 2:45pm
 
I agree that the coverage of the point relating to phone costs is very well hidden.  I do hope that any action will be better organised than it seems that part relating to card costs will be; I know this is off topic but, from the report on the BBC 1pm News, it seems that this will be yet another example of a regulation being made than turns out to be totally meaningless in its effect, in other words a "fudge" or sop in the direction of consumers.  It seems that a "small charge" will still be allowed (anything over 20p/1-2% would be clear profiteering) although no sum is mentioned (typically).  To me it is perfectly clear that NO charge can be justified when one considers that cheques are no longer accepted & use of cards is business-generating, also, can you imagine what would happen if you tried to turn up at BA's offices with a pocketful of cash to pay for a flight??  There is very little, if any, choice of payment method in most cases and therefore card charges are just a rip off in all circumstances.

However, back to the point at issue & SCV's paragagraph taking issue with a small point!   I do not say that calls should be "free" to the caller, I do not see any need for the use of 0800 numbers for either Sales or Customer Service BUT I do not believe the customer should never have to pay a "premium", that is, a fee over and above the cost of a normal call, whether that is paying for a geo call or using a call package.  I know this is a point on which we have regularly disagreed but I couldn't let it pass.

Happy Christmas to all forum members & users!
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Re: EU to ban excessive hotline charges
Reply #9 - Dec 23rd, 2011 at 2:56pm
 
Barbara wrote on Dec 23rd, 2011 at 2:45pm:
I agree that the coverage of the point relating to phone costs is very well hidden. I do hope that any action will be better organised than it seems that part relating to card costs will be; I know this is off topic but, from the report on the BBC 1pm News, it seems that this will be yet another example of a regulation being made than turns out to be totally meaningless in its effect, in other words a "fudge" or sop in the direction of consumers. It seems that a "small charge" will still be allowed (anything over 20p/1-2% would be clear profiteering) although no sum is mentioned (typically). To me it is perfectly clear that NO charge can be justified when one considers that cheques are no longer accepted & use of cards is business-generating, also, can you imagine what would happen if you tried to turn up at BA's offices with a pocketful of cash to pay for a flight?? There is very little, if any, choice of payment method in most cases and therefore card charges are just a rip off in all circumstances.

However, back to the point at issue & SCV's paragagraph taking issue with a small point! I do not say that calls should be "free" to the caller, I do not see any need for the use of 0800 numbers for either Sales or Customer Service BUT I do not believe the customer should never have to pay a "premium", that is, a fee over and above the cost of a normal call, whether that is paying for a geo call or using a call package. I know this is a point on which we have regularly disagreed but I couldn't let it pass.

Happy Christmas to all forum members & users!


The DVLC do not charge for debit cards but do for credit cards. The same goes for travel agents like Thomson
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Re: EU to ban excessive hotline charges
Reply #10 - Dec 23rd, 2011 at 3:16pm
 
Whilst there is a differential between the handling costs imposed for debit card vs. credit card transactions, there is a fair question as to who should pay that difference - assuming that any charge is limited to that alone.

Perhaps it would be better if there was no differential for the retailer, but the credit card user saw a transaction charge on their statement.

This would also get around the problem over whether or not such a charge is exempt from VAT. If raised on a credit statement it would be exempt. If passed on (to all customers) in the price for a VAT-able product or service it would not. We can guess which the Treasury would prefer.
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Re: EU to ban excessive hotline charges
Reply #11 - Dec 23rd, 2011 at 4:32pm
 
SilentCallsVictim wrote on Dec 23rd, 2011 at 3:16pm:
Whilst there is a differential between the handling costs imposed for debit card vs. credit card transactions, there is a fair question as to who should pay that difference - assuming that any charge is limited to that alone.

Perhaps it would be better if there was no differential for the retailer, but the credit card user saw a transaction charge on their statement.

This would also get around the problem over whether or not such a charge is exempt from VAT. If raised on a credit statement it would be exempt. If passed on (to all customers) in the price for a VAT-able product or service it would not. We can guess which the Treasury would prefer.


What is the difference between paying by debit card or by cheque? I would have thought nothing, yet customers were never charged extra when they paid by cheque.
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Re: EU to ban excessive hotline charges
Reply #12 - Dec 24th, 2011 at 1:00am
 
sherbert wrote on Dec 23rd, 2011 at 4:32pm:
What is the difference between paying by debit card or by cheque? I would have thought nothing, yet customers were never charged extra when they paid by cheque.

I am sure that handling debit card transactions is very much cheaper than handling cheques for the vast majority of retailers. The same is true for the banks.

I think that it is perhaps too late to go back and demand that all of those who used cheques reimburse users of debit cards for the value of the discount which they could have received had retailers reflected their costs more accurately in their pricing.

On the same basis, credit card users who have not suffered a surcharge owe an enormous amount to those who have paid in other ways.


The key question for me, in relation to these banking transaction charges (not the hotline charges being discussed in this thread), is whether we believe that all customers should pay the same price, or if we should pay a little less or a little more according to our chosen method of payment. I fear that some may be tempted to answer that those who use a method which is less costly should benefit from a discount, and nobody should be penalised for using a more costly method.

All the proposed regulation does is ensure that any charge said to be due to payment handling costs is that and that alone. It neither requires nor prohibits any distinction in charging.
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False Hope of Victory Against Telecoms Racketeers
Reply #13 - Jan 11th, 2012 at 4:59pm
 
Whilst I note that SCV still sadly seems to have no other more worthy cause available with which to fill his days as one who now sees how much time one can waste on the battle with the UK telecoms mafia to very little final productive outcome I would recommend him to refer to the fiasco over 070 numbers where we had a full Ofcom consultation and subsequent regulatory proposal with implementation date for them to change over to 06 numbers only for it to be scotched at the 11th hour when various noisy users of this range (in particular Patientline) were able to get at Ofcom through government ministers and other telecoms industry high level contacts.

For those of you who wish to waste the next 10 years of your life responding to these numerous consultations and hoping for improvement by all means do so but realistically you can be sure that the scammers will always find a way round it in the end.

Take the case of additional massive disproportionate fees for paying by debit and credit card where following various recent prononuncements by the Office of Fair Trading Monarch and Thomson Airlines have both now stopped charging debit card users any extra to pay the bill with their cards. But all that has happened to fund this reduction in charges is for Monarch and Thomson to now nearly double their previous hold baggage charges they were making (especially European Short Haul) so that most customers now pay even more to fly in total, especially those customers who previously paid by Visa Electron and avoided paying the card payment surcharges but who may well always need to take hold luggage with them. Whilst in the case of Monarch at some inconvenience you might just about manage to travel only with hand luggage of 10kg or under I would defy anyone going on more than a day trip or overnight trip to manage to comply with Thomson's now strictly enforced 5kg hand luggage limit if they do not also have a hold bag.

The bottom line is that rather like the question of company directors and their levels of pay or levels of taxation the people behind these scams have far, far too many friends in high places who also benefit in some way from the scam and so are therefore in a position to ensure that the scamming alway goes on in some other form or other.

I will continue to contribute alternative geographic or freephone numbers to this site as a useful action in the fight against telecoms extortion by big business but I will not continue to fill most of my living hours with this regulatory struggle as SCV quite clearly does as ultimately we will not win the wider struggle and business will continue to extract various unfair charges not actively quoted to customers at the point of sale by one means or another. One of the reasons for this is that there is now a professional qualification called the Master of Business Administration where a large amount of the course seems to be devoted specifically to using these kinds of disguised pricing methods in order to give your business an edge in the market place.

The bottom line SCV and certain others here is that if you want to continue hitting your heads very hard on a large concrete wall and even enjoy doing so by all means keep at it but do not expect it to be a very productive way to spend your time/life.

Also I should perhaps point out that by the time this particular draft directive on customer service phone call costs is ever implemented that the UK will more than probably either have left the EU or there will be a two speed EU in which these kinds of commercial directive no longer apply to the UK........
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Re: False Hope of Victory Against Telecoms Racketeers
Reply #14 - Jan 11th, 2012 at 6:52pm
 
NGMsGhost wrote on Jan 11th, 2012 at 4:59pm:
... the battle with the UK telecoms mafia to very little final productive outcome ...

That is not, and has never been, my battle.

I only engage in battles where there is some realistic hope of victory, and have been fiercely criticised for doing so. I treat criticism for choosing an "easy target" as a compliment to my judgement.

I have always said that it is for each of us to commit as much, or as little, time and energy to the matters on which we share concerns as we wish, and are able.

We have achievements and set-backs. I urge NGM's Ghost to take the congratulations and thanks of fellow campaigners for what has been achieved as a result of his efforts with the grace that the genuine nature of such expressions deserves.

By definition, ultimate objectives are unachievable, as we should allow our eyes to look to the stars, even though we must keep our feet on the ground. Those which I have are very different from those outlined above, although we may share some common paths.

I would not wish to be churlish by appearing to disregard some well meant advice from a duly esteemed senior to me in this world of campaigning on telecoms matters - I am grateful. There will however remain many points on which we will have to agree to differ.
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