Tougher fines promised in premium-rate dialler crackdown

Ofcom is to beef up the powers and penalties of the consumer watchdog for premium rate phone lines and make telcos more responsible for protecting consumers from rip-offs.

The regulator wants an increase in the £100,000 limit for fines that the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) watchdog can levy.

And Ofcom wants telcos to hang on to consumers' cash for 30 days before handing it over to service providers. In the case of disputes, the telcos will be obliged to hang on to the cash for 90 days. They will also be obliged to make more checks on companies offering premium services.

An ICSTIS spokesman said: "We estimate that we will get 80,000 complaints about premium rate services this year and that is clearly unacceptable. We welcome the recommendations that Ofcom has made as the result of its review.

"We want to see the industry flourish and stop consumers being ripped off. You can make money very quickly and this has attracted some scams."

But getting the teeth to the watchdog will be a complicated series of procedures. ICSTIS will be consulting with Ofcom and the Department for Trade and Industry about making the changes to its code of practice. When these changes are agreed they will have to be submitted to the EU for a statutory three-month consultation period.

ICSTIS hopes to be ready to submit its new code to Brussels by the middle of next year and the the spokesman said: "We hope to get the new powers quickly, rather than slowly, so we can start cracking down."

Ofcom estimates that the premium line business in the UK is a £850m-a-year industry. ICSTIS calls it a £1bn-a-year industry. The ICSTIS spokesman said: "It's the only thing that we disagree with Ofcom on."