The price of calls to directory inquiries is to be capped from April to protect consumers from excessively high charges.
Directory inquiries numbers – which all begin with 118 – are still used by more than 1 million people, many of them elderly, with nearly two-thirds unaware of how much the calls cost. One firm charges almost £20 for a 90-second call.
The maximum charge for calls will be capped at £3.65 for every 90 seconds, Ofcom has announced.
Jane Rumble, the director of consumer policy at the communications regulator, said: “Directory inquiry prices have risen in recent years and callers are paying much more than they expect. Our evidence shows this is hurting people, with some struggling to pay their bills.
“We’re taking action to protect callers by capping 118 prices. This will significantly cut the cost of many calls, and bring them back to 2012 levels.”
The most commonly dialled directory directory inquiries number is 118 118, which charges £11.23 for a 90-second call. Ofcom said while cheaper services were available, consumers tended to use more easily remembered numbers. At the other end of the price spectrum, callers using the Post Office’s 118 885 number are charged £1 for a 90-second call.
People aged 65 and over are four times as likely to call 118 numbers than those aged 16-34, and are far less likely to have internet access as an alternative means of finding a number. Overall, the number of calls to 118 services is falling at a rate of about 40% every year.
With the cap on the price of calls, Ofcom said directory inquiries services would become more affordable and consumers would be protected from unexpectedly high bills. The regulator’s research found that every year, about 450,000 people pay a total of £2.4m more than they expect for these calls.
The directory inquiries phone service was changed in 2003, with the intention of creating more competition in the market, which was dominated by BT’s 192 number for 47 years.
Firms behind the new numbers spent millions of pounds on marketing campaigns to try to replace 192 as one of the most easily remembered numbers. There are now about 300 118 numbers, according to Ofcom.
Richard Neudegg, head of regulation at uSwitch.com, said it was right that the regulator has stepped in to limit the cost of calls. “118 operators have been losing customers since their heyday as use of the internet for everyday inquiries has become the norm, and the reaction of some 118 services has been to increase charges for their limited customer base,” he said.
“By capping these calls at £3.65 per 90 seconds from next April, Ofcom has put a restriction on excesses. This is a clear signal that there is a limit on how much providers can recoup operating fees by hiking costs to a dwindling number of users, who often are unaware of the charges.”
The brand behind the number
The 118 118 service was thrust into the national psyche in 2003 when the directory inquiry market was opened up to new firms to encourage more competition.
An aggressive marketing campaign featuring two male runners wearing long moustaches and white vests emblazoned with the number 118 paid off, as the brand became the most memorable service in a crowded market. It remains the most popular directory inquiry service – despite being one of the most expensive – as consumers stick with the number they know best.
The service is the brand name of The Number UK (TNUK), a subsidiary of US directory inquiries provider Knowledge Generation Bureau, a privately owned firm based in New York and founded by former Lehman Brothers investment banker Robert Pines.
The US firm has more has than 7,000 staff and also operates directory inquiry firms in France, Switzerland and Ireland, as well as 118 118 Money, which provides consumer loans in the UK. TNUK lists offices in London and Cardiff.
The 118 118 service has been criticised for its pricing, and in 2004 was the subject of a successful complaint to Ofcom by David Bedford, who argued that the company had stolen his image from his days as a long distance runner in the 1970s.
