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.
