After much effort BT seems to have finally backed down from it’s proposed increase of the Premium Rate Bad Debt charge proposed increase from around 3% to an enormous 9.7%, if it had come into force in April this year it would have had catastrophic consequences for many premium rate providers especially re-sellers who depend on the few pence margin on each minute/call to survive.

BT proposed that it needed to take a cut 9.7% out of every premium rate call (numbers starting 090) to combat the amount of bad debt it was receiving with customers making the calls and then not paying for the 09x phone calls. Almost every network operator in the country challenged the increase and even after BT announced in December 2009 that it was coming into force in the last two weeks BT has forwarded a further letter to telcos informing them that the change will NOT come into place as intially planned.

The effect would have had a knock on effect for consumers who may have found that their most popular premium rate services X Factor, Strictly Come Dancing voting services may have increased the cost to call the voting lines to make up for the reduced revenue that providers would receive. The rate would have meant that on a £1.50/min service the networks would receive an 8p reduction in the rate they received and with many providers relying on a few pence margin to make their promotions worth while it would have caused a huge impact on the Premium Rate Market that has gone from £2bn a year to £800m a year in just 2-3yrs.

It is beleived that BT Wholesale will be back with a “Revised” bad debt rate although for the time being networks can breath a sigh of relief that Ofcom shot down BT’s 6.7% increase.

Ofcom today published proposals to extend the NTS retail uplift and PRS bad debt surcharge wholesale charge controls for Number Translation Services and Premium Rate Phone Services. Their websites writes…

1.1 NTS Retail Uplift and the associated PRS Bad Debt Surcharge are wholesale charge elements of BT’s charges for Number Translation Services (‘NTS’) call origination. NTS calls are calls to 08 numbers ^(-1-) and 09 numbers (09 numbers are also known as Premium Rate Services (‘PRS’)). These numbers provide individuals and organisations with a combination of call routing services and a mechanism to charge callers small sums. This allows them to provide a wide range of services to callers, including sales lines, customer service/enquiries, information and entertainment services.

1.2 We require BT to originate and to retail NTS calls on behalf of other communications providers (‘CPs’). Through the existing controls we allow BT, when it originates NTS calls, to retain an amount to cover its costs including an element of its own retailing costs. These specific retailing costs are referred to as the NTS Retail Uplift. For the higher priced PRS calls we allow BT to retain a percentage of revenue to recover the higher level of bad debt encountered on these calls via the PRS Bad Debt Surcharge.

1.3 In our recent market review consultation “Review of the Fixed Narrowband Services Wholesale Markets” published on 19 March 2009 ^(-2-) (the ’2009 Wholesale Market Review’), the key findings and proposals relevant to this consultation are that:

1. there is a market for wholesale call origination on a fixed narrowband network in the UK, excluding the Hull Area ^(-3-);
2. BT has Significant Market Power (‘SMP’) in this identified market ^(-4-);
3. BT should continue to be subject to the NTS remedy to address its SMP in this market. We therefore proposed to revoke the existing SMP services condition, SMP condition AA11(the ‘NTS Condition’) and re-apply it in its current form, which includes the maximum retention allowed by BT for the PRS Bad Debt Surcharge ^(-5-);
4. we also proposed that, it is necessary to have a charge control applied to the NTS Retail Uplift charges, with the specific details of the charge control to be addressed in a separate consultation to allow CPs providing NTS services to make effective use of the NTS call origination remedy BT is obliged to provide.

1.4 In this consultation therefore we consider the details of the NTS Retail Uplift charge control remedy flowing from the market analysis in the 2009 Wholesale Market Review. We are seeking views on the form and the level of these charge controls which we propose should take effect on 1 October 2009 and apply for a period of 4 years. We are also seeking views on the methodology used to calculate the charges. In addition we are seeking views on a proposed increase in the Premium Service Bad Debt Surcharge.

PHONEPAYPLUS MOBILE REVIEW - ONE YEAR ON

Premium Rate Regulator PhonepayPlus, the phone-paid services regulator, today announces that complaint figures concerning mobile services are down by half one year on from the introduction of new rules that came about following its 2008 Mobile Review. The new regulation was introduced in response to a worrying rise in consumer complaints regarding premium rate mobile services which, on average, account for some 90% of all calls to PhonepayPlus’ Contact Centre.

PhonepayPlus is releasing these figures at the industry launch of its Annual Report in London today, where it will also announce that its Chairman, Sir Alistair Graham, has accepted an invitation to stay in post for a further three years.

PhonepayPlus’ complaint figures show that:

• Total complaints regarding Premium Rate mobile services are down 57% from June 2008 compared to May 2009 (2,125 vs 919)
• Consumer complaints regarding mobile subscription services have almost halved since the introduction of the new rules (1,207 vs 651)
• Consumer complaints about unsolicited text messages are down by 85% from the first half of 2008/9 compared to the second half (1,538 vs 230)

Commenting, PhonepayPlus Chief Executive, Paul Whiteing, said: “These results show that we are heading in the right direction and sorting the good from the bad in mobile services. It is early days, and we are still analysing the various impacts on our complaint numbers, but these are an encouraging set of results that appear to demonstrate the effectiveness of the new rules, as supported by responsible providers in the sector. 

He continued: “However we are not complacent and remain vigilant for any new opportunistic activity that may result in consumer harm. This risk is especially acute since, with a country in the midst of recession, we expect the PRS industry to be attractive to unscrupulous operators looking for ways to make a fast profit. We remain committed to being proactive in preventing non-compliant services from making it to market.”

Mobile Review: the rules

PhonepayPlus’ Mobile Review set out new rules for the mobile phone-paid services sector. It stated that services could not be advertised as free unless they were free from any associated charges; set new rules around trading of third party marketing lists; and introduced a prior permissions scheme for Premium SMS subscription services costing upwards of £4.50 in any given week. The Review also reinforced PhonepayPlus’ zero tolerance of any failure of the ‘STOP’ command for opting out of receiving unwanted contact by text message.

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Meaning that if you put in the hours you can generate THOUSANDS OF POUNDS per month working part of full time. This is NO scam there is no setup charge, rentals, hidden charges or any other crap this is a legitamate oppertunity for those who enjoy chatting dirty on the phone to earn whilst doing so.

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Premium Rate Regulator PhonePayPlus has annouced the first steps on reimburising users who paid £7200 for permission to run their own live services will be seing a refund soon.

The Trustees are pleased to announce that they have resolved to commence the winding up of the Fund and that the effective date of such commencement is Friday 22 May 2009 (the “Cut-Off Date”).  All contributors eligible as at the Cut-Off Date will be entitled to participate in the distribution of monies presently held in the Fund. We will be updating our records by undertaking a final search, effective as at the Cut-Off Date, to determine the list of eligible contributors. 

Following this, we will be writing to all eligible Contributors to confirm details of the winding up process and thus to make a start on the distribution of monies.  Our latest estimate is that there will be a maximum of 75 eligible contributors to the Premium Rate Services fund entitled to share in about £540,000 giving approximately £7,200 available to each eligible contributor. There were originally 96 contributors but a number of them have ceased to exist and a number of them are individuals who we are currently tracing as they have ceased to provide services, but have not notified the Trustees. Please note that this amount is not guaranteed but is our estimate. 

However, over the past few months we have been working to resolve a number of legal and technical issues connected to the proposed winding up. The final outcome is that the Trustees consider it reasonable and prudent to retain a certain amount of monies to cover the risks of any contributor seeking to challenge the winding-up and/or the distribution of its monies or otherwise. The Trustees wish to keep to a minimum the amount retained and therefore if all eligible contributors successfully participate then the risk of any challenge is minimized and thus the amount retained can be minimized and a further distribution made in due course.   

Accordingly, the Trustees propose to make an initial distribution of £6,500 to each of the potential 75 eligible contributors with the balance being distributed as and when possible.  All correspondence will be sent, in the case of companies, to the registered office address shown at Companies House or equivalent for foreign companies and, in the case of individuals, to their last known address notified to us. If you wish to send us your current address, then please do by calling: 0870 762 7925 This is a postive move by the Premium Rate Regulator and should give consumers more choice on who they can choose to be their Premium Phone Line Provider.