Financial firms should ring the changes on costly calls

Which? is calling on financial firms to cut off costly calls after finding nearly three-quarters (73%) of the phone numbers used for customer service or complaint lines are high rate telephone numbers.

We looked at phone numbers used by companies for eight financial services including current accounts, loans, insurance and credit cards and found that 177 out of 242 customer service or complaint lines are pricey 084 or 087 numbers. This includes leading high street banks and building societies such as HSBC, Lloyds Bank, Nationwide, NatWest, RBS and TSB Bank, credit card providers American Express, Capital One and Tesco Bank and insurers Aviva, Churchill and Direct Line.

We found that four in ten people (39%) prefer to call financial firms with an enquiry, and nearly a third (31%) would rather complain by phone. Yet nearly all (95%) of the credit cards providers we looked at use 084 or 087 numbers for complaints or customer service helplines and nine in 10 (89%) of current account providers use them for complaints or customer service helplines. Existing customers are also being charged more than new ones with free from landline 0800 numbers used for52% of sales or new customer lines, compared to just 26% for existing customers and 21% for complaints.

In a positive response to our Costly Calls campaign, Barclays, Barclaycard, Natwest and RBS have announced that they will be offering a freephone or basic rate number for all customer helplines so they are cheaper to call from both landlines and mobiles. Which? is pleased that these banks are the first major providers to drop costly calls and we ask others to follow their example.

The EU Consumer Rights Directive ban on the use of expensive numbers for customer helplines comes into force next year, but financial firms are excluded. Which? is calling on the Financial Conduct Authority (FCA) to clarify existing rules to stop financial services companies from using high rate numbers on complaints lines, and change the rules so they also cover customer helplines.

Richard Lloyd, Which? executive director, said:

“Millions of us prefer to deal with our bank on the phone, yet we are expected to cough up for a costly call when we do. We applaud Barclays, Barclaycard, NatWest and RBS for breaking from the pack and doing the right thing for their customers by dropping costly calls.

“With two of the biggest banking groups now leading the way by offering freephone or geographic numbers, we hope this is a tipping point for the banking sector – there’s really no excuse for other providers not to follow suit.

“It’s not right that financial companies are being let off the hook. The FCA must act now to put an end to costly calls in this sector.”

We also analysed 115 telephone numbers used by 73 public bodies, and found around a quarter of the numbers are high rate starting 084 or 087. This included the Department for Environment, Food & Rural Affairs, the Department for International Development as well as Government agencies such as Jobcentre Plus, Student Loans Company and The Pension Service.

The Which?  Costly Calls campaign is also asking for:

·         Public bodies to lead by example and ban costly numbers across the board in a consistent way, overseen by the Government.

·         The Government to close the loophole which means the travel industry is exempt from the CRD ban and extend it to cover travel firms as soon as possible.

Almost 60,000 people have already signed up to our Costly Calls campaign – consumers can show their support atwww.which.co.uk/costlycalls

Notes to Editors:

1.    High rate numbers are all telephone numbers starting with 09, 084 or 087 prefix. ‘Premium rate’ only strictly apply to numbers that start 09 and 0871, 0872 or 0873 and fall within the remit of PhonePayPlus, the premium rate regulator. Which? defines basic rate numbers as geographic rate numbers starting with 01, 02 or 03. 0845 and 0870 numbers can be included in landline minutes, but not typically in inclusive mobile minutes. Numbers that will almost certainly not be included as standard in any plan however are 0844 and 0871.

2.    Barclays UK Retail Bank and Barclaycard have committed to phase out all premium rate and high cost phone numbers in the first half of next year, replacing them with freephone and basic rate numbers. Customers using landlines will be able to call freephone 0800 numbers, and the bank will also be introducing local rate numbers starting 02 and 03 which can be used from mobiles, and will be covered under mobile phone minute packages. This new commitment builds on steps taken earlier this year to switch to freephone numbers for customers who want to make a  complaint, and to enable customers using the Barclays Mobile Banking app to call straight through to an 03 number. For more information please contact Simon Hailes, Barclays Media Relations Tel: 02071164893 simon.hailes@barclays.com

3.    A summary of our financial services costly calls investigation is:
  No. of providers % of providers using 084 or 087 for customer service or complaints lines
Credit cards

20

95%

Current accounts

18

89%

Loans

16

88%

Car insurance

39

82%

Home insurance

34

79%

Mortgages

16

75%

Travel insurance

32

72%

Payday loans

67

49%

All telephone numbers were checked in August/September 2013

4.    The EU Consumer Rights Directive (CRD) covers most sectors where consumers are paying for a good or service. The CRD’s provision on phone charges will mean that UK companies will have until June 2014 to stop using high rate phone numbers. The CRD allows for some limited exclusions (such as aspects of passenger transport and gambling) and it does not apply to some sectors including financial services.  The Department for Business, Innovation and Skill is currently consulting on including the travel and transport sectors, with a decision expected in December 2013.  As the CRD is a consumer law impacting business to consumer transactions only, public bodies are not included under its terms.

5.    Which? consumer research found that:

·         Half of people we asked (50%) prefer to make inquiries to a public body by phone.

·         40% of people say they don’t know which high rate number would cost the most if called from a mobile phone and over a third (36%) say the same about calling from a landline.

·         Nearly two thirds of people (64%) think companies use high-rate numbers to discourage people calling them 

Based on an omnibus survey with 1293 Which? Members in October 2013.

·         Four in five people (80%) think that companies who make them use high rate phone numbers don’t value them as a customer.

·         Three quarters (75%) would be put off phoning customer services if they had to use a high-rate number, and three in five (63%) would be put off making a complaint. A vast majority (94%) say they would avoid making calls to premium rate numbers unless they absolutely have to.

·         Two thirds (66%) have taken other actions, like emailing, to avoid calling a high-rate number when they wanted to complain

·         Half of people (49%) have regretted calling a high-rate number in the past year because of the cost and three in five people (58%) can’t afford to call a high-rate number from their mobile.

Populus, on behalf of Which?, interviewed a random sample of 2070 GB adults aged 18+ online between 30th August and 1st September 2013.  Data has been weighted to the profile of all GB adults. Populus is a founder member of the British Polling Council and abides by its rules.

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