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LITRG has long campaigned for HMRC to change their telephone policy to protect the poorest from disproportionate cost. The telephone regulator, Ofcom, seems about to lend a hand.

Introduction

For several years LITRG has been campaigning for HMRC to adopt a telephone policy which does not involve the most vulnerable of their customers in disproportionate cost. Now the telephone regulator, Ofcom, looks set to force public sector bodies to adopt policies that give protection to the poorest.

The problem

Research has shown that many of HMRC’s lowest income customers use mobile phones rather than landlines. Yet most of the time, HMRC force their customers to use 0845 numbers to make contact with them. This is not discretionary contact; HMRC rules mean that you have to ring those numbers if you are to avoid significant financial penalties.

Costs from some mobile phones to an 0845 number can be up to 40p a minute. Even if you have a landline, the 0845 number is effectively levying another tax when a cost free 0800 alternative is available (and 0800 numbers are used by the Department for Work and Pensions for both landlines and mobile providers on some services).

It would not be so bad if HMRC always answered the telephone instantly, but in recent years the service has deteriorated dramatically. In 2008/09 according to the National Audit Office, on 43% of calls HMRC either kept you waiting until they cut you off or you gave up trying.

Ofcom to the rescue?

Last month, Ofcom, the telephone regulator, issued a 479-page consultation document setting out its recommendations for taking forward the use of non-geographic telephone numbers (0800, 0845 and the like).

Ofcom concludes that the current system does not work for consumers for the following reasons:

1. People are confused about what these numbers (0845 etc.) mean and how much calls cost. The lack of scrutiny by consumers means that phone companies can set prices with less concern about the impact on consumers.
2. The cost of calling these numbers is generally significantly more from mobiles than from landlines. The impact of the higher cost on mobiles is particularly pronounced for people on lower incomes who are more likely to live in mobile-only households, and use their mobile to call essential services.
3. Under the current system, those providing services via a non-geographic number cannot easily advertise the price of calls to their service which leaves consumers unsure, and prevents competition between providers from working as well as it might.

Ofcom proposes a simpler numbering system to make non-geographic numbers and their prices more intuitive. For example, making calls to 0800 numbers (freephone) free from mobiles as well as landlines; encouraging the use of 0345 (which is charged like the geographic 01/02 numbers and usually included in call bundles). This will mean changing the role of 0845 numbers.

Ofcom also proposes to split the charges paid to the phone company and the charges paid to the service provider (HMRC in this discussion) so that consumers can see exactly how much they are paying, and to whom. HMRC always deny taking a profit share from the cost of calls made to them, but some campaigners argue that the special deals which HMRC get on their 0845 numbers from suppliers means that the more the vulnerable spend on abortive telephone calls, the lower the costs to HMRC.

Ofcom are also considering the alternative of maximum prices for each number range applying to all phone companies.

An opportunity for change

This Ofcom consultation ends on 10 March 2011 and we would recommend all bodies which have the interests of vulnerable customers of HMRC at heart should put in a supporting response.

This presents a wonderful opportunity for Government to ensure that those at the bottom of the income scale do not bear the costs of public service inefficiencies in a disproportionate way.