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Fines rise for premium-rate phone offences

'No longer sufficient'

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Parliament has approved an increase in the maximum fine that can be imposed on premium-rate rogues. The cap on the fines that can be imposed by Britain's premium-rate services regulator is going up to £250,000 from 30 December 2005.

The current limit is £100,000, but this has been found to be ineffective as a deterrent, particularly against fraudsters using rogue internet dialler services.

A rogue dialler is software that installs a premium rate number as the default dial-up number on a victim's computer without his knowledge, resulting in an unexpectedly expensive call every time the computer connects to the internet. According to ICSTIS, this type of scam has caused far more widespread consumer harm than any other premium rate services to date.

But rogue diallers have not been the only scam. There has been a proliferation of ‘spam and scam’ text and voicemail promotions claiming that consumers have won 'prizes' and urging them to call expensive premium rate numbers to make a claim. Such phone prize scams frequently rely on automated calling equipment to make the promotional calls – a practice that can be illegal.

All of these supposed ‘services’ could generate significant sums of money beyond ICSTIS’ existing £100,000 fine limit, says the watchdog.

The increased maximum fine limit follows one of the recommendations in the Ofcom Review of the Regulation of Premium Rate Services. The Review, conducted by Ofcom with ICSTIS, was carried out at the Department of Trade and Industry's request, and secured Ministerial approval in December 2004.

“Our current fine limit of £100,000 is no longer sufficient to deal with the worst services we see. A new fine limit, combined with the other proposals in the Ofcom review to strengthen consumer protection, should ensure that the relatively small number of rogues out there do not continue to damage trust and confidence in the entire premium rate industry,” said ICSTIS Director George Kidd.

He warned that ICSTIS was reviewing its sanctions policy, and expected to publish a new, tougher, version early in 2006.

According to ICSTIS, this could include the power to apply the new fine limit on a per breach basis, in certain tightly defined circumstances. ICSTIS is considering the matter, following a recent ruling by the Independent Appeals Body.

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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