PhonePayPlus have issued a statement over PRS numbers and the forthcoming VAT increase from 4th January 2011.

It can be read here.

Now basically it reads that those with 09x numbers should at the first opportunity update their pricing info to reflect the new prices due to VAT increase.

Personally I think, within reason, this announcement is fair so long as companies don't drag their feet over updating their pricing info.


What I don't agree with is that PhonePayPlus have said that those using 087x numbers don't have to bother updating their pricing info at all if it's only due to the VAT increase.

So going by what PhonePayPlus say then, that means a company can continue to advertise for years after January 2011 that their usually 10ppm line is still 10ppm (assuming the cost of these PRS aren't increased by BT).

This isn't fair.  They should have said something similar to what they have said for companies using 09 PRS numbers.

I personally don't agree with this and I am going to complain that this is unfair and potentially false advertising.

I urge those that also disagree with this to complain to PhonePayPlus as well.

This is the expected follow-up to the Ofcom consultation referred to in this thread.

There is one major error in the PPP announcement.

Quote:

... service costing 50p, £1 or £1.50 per minute today may cost users up to 51p, £1.02 or £1.53 per minute (including VAT) respectively, from 4 January 2011

The only prices quoted by PRS users are the MINIMUM (i.e. regulated BT) rates. It is fair to say that the BT rates could not increase by more than is truly attributable to the VAT increase, however users will continue to pay "up to" whatever their provider chooses to charge them.

Given that BT quotes rates to thousandths of a penny, the minimum pence per minute charges will be greater than those stated: (probably) 51.063p, 102.128p, 153.192p respectively. There is also the BT call setup fee, likely to increase from 9.9p to 10.1p to consider. BT also rounds durations up to the nearest minute and call charges up to the nearest penny. A 30 second call to a "50p per minute" number would therefore increase from 60p to 62p. Neither 50p nor 51p per minute are therefore the maximum costs, even from BT.

The whole system of advising retail charges is thoroughly discredited, which is one reason why Ofcom will shortly be publishing its proposals for change. Under the present regulatory regime, PRS users cannot give a reliable statement of call cost, other than the regulated element of the BT rates, as other operators are free to vary their rates as they choose.

As for the "10p" 0871 call, from BT this will cost a minimum of 21p (currently 20p), a five minute call will cost 62p - 12.4p per minute (currently 60p - 12p per minute). My view is that the whole thing is so hopelessly wrong anyway that quibbling over a fraction of a penny is to miss a much greater problem. There will doubtless be many much more significant examples of misleading advertising arising from the VAT increase.

I sincerely hope that the Ofcom proposals, to be published any day now, will allow PRS users to split out their portion of the cost from that charged by the network operator. Many would wish that they could leave out that levied by the government, but the principle of retail prices having to include VAT is now firmly established.

SilentCallsVictim wrote on Dec 9^th, 2010 at 5:28am:

… BT also rounds durations up to the nearest minute and call charges up to the nearest penny. A 30 second call to a "50p per minute" number would therefore increase from 60p to 62p. Neither 50p nor 51p per minute are therefore the maximum costs, even from BT.

For calls to 084x, 0871, 0872 and 09 numbers, BT rounds duration to the next second rather than whole minute for the purpose of billing.

BT's charging policy is set out in its Price List here:

http://www.bt.com/pricing/current/Gen_Notes_boo/0001_d0e219.htm#0001-d0e219

Dave wrote on Dec 9^th, 2010 at 10:12am:

SilentCallsVictim wrote on Dec 9th, 2010 at 5:28am: … BT also rounds durations up to the nearest minute and call charges up to the nearest penny. A 30 second call to a "50p per minute" number would therefore increase from 60p to 62p. Neither 50p nor 51p per minute are therefore the maximum costs, even from BT. For calls to 084x, 0871, 0872 and 09 numbers, BT rounds duration to the next second rather than whole minute for the purpose of billing.

Apologies - Dave is correct. I was also out of date with the call setup fee and furthermore had failed to spot that BT is increasing this from 10.9p to 11.5p.

Noting that BT has published some of its actual price revisions - VAT changes explained - I am waiting to hear details of the full list of changes, having been told that full new price lists are not expected to be published until 29 December. Clearly that will not be sufficient notice for PRS providers who may wish to quote accurate BT rates with effect from 4 January.

BT has again used this opportunity to tilt the balance towards use of inclusive packages. Whilst the VAT increase should represent a 2% increase in retail prices, what BT calls "rounding differences" are something more. The monthly charge for the Unlimited Anytime Plan is changing from £4.99 to £5.00 (an increase of 0.2%, i.e. for BT a decrease of 1.9%) whereas the rate for a non-inclusive weekday daytime geographic call is changing from 6.4p to 7p (an increase of 9%, i.e. for BT an increase of 7%). The call setup fee increase, from 10.9p to 11.5p, (an increase of 5.5%, for BT an increase of 3%) compounds the effect of encouraging all those who make any weekday daytime calls to adopt Unlimited Anytime.

I will post again here when I have further details of the rates for PRS calls. When I have the new rates for 0844 g6 and non-inclusive 0845 calls, I will post to another thread.

SilentCallsVictim wrote on Dec 9^th, 2010 at 5:28am:

My view is that the whole thing is so hopelessly wrong anyway that quibbling over a fraction of a penny is to miss a much greater problem. There will doubtless be many much more significant examples of misleading advertising arising from the VAT increase.

I agree about quibbling over small increases like a penny or two but it was the potentially misleading price I am concerned about.  I agree that there may be other significant examples of misleading advertising due to the VAT increase but in the most part nothing can (or will) be done until after the 4th January when we see how big a problem it is.

My concern is that PhonePayPlus are basically saying it's "okay to mislead customers".  Once one says its okay then it could have a snowball effect and others may follow suit and say well it's okay because PhonePayPlus say it's okay to mislead customers over the price of the call.

Further comment is necessary, prior to responding to the reply to my comments.

Apparently the PP+ announcement was preemptive as Ofcom has not (even informally) announced the outcome of its consultation. PP+ has jumped the gun, assuming that Ofcom will confirm the situation to be as proposed.

I am told that the new BT prices which are published here are the only prices that have been finalised. The full list will be published on 29 December, perhaps when BT has seen how others react to to what it has released.

I am told that PRS users will then (in principle) have to wait for news of the new rates to filter their way through their own chain of telephone service providers before they can publish them. This assumes that they wish to use the (minimum) BT rates as the illustrative cost.

Ofcom has not approved the suggestion of rounding down, so if minded to take up this issue, it may well be worth contacting Ofcom with a formal representation about the PP+ announcement.

Far more important to Ofcom is the way forward for the future, which is likely to come out on this coming Thursday, along with confirmation of the outcome of the consultation on this specific issue.


My point in argument was that the prices given have been, and will remain, seriously misleading. BT originates only 25% of non-business telephone calls. To suggest that "others may vary" when BT rates apply only to a minority is seriously misleading. To disregard the BT call setup fee is also to mislead, even if stating that it only the BT cost that is being quoted. When the figure given is so hopelessly wide of the mark, then to argue that a misleading figure should be more precisely specified would seem to be missing the point.

There is even an argument for demanding that the VAT increase be disregarded and that a clear statement indicating that only a very rough minimum cost can be given be used. e.g Calls will cost more that 50p per minute - contact your operator for details"!! In the present situation that is as much as anyone can say with confidence. A new regime is needed, because this is unfair both on consumers and PRS users.

Update on my previous comments.

The proposed "new regime" went out to consultation on 16 December (as predicted) - see this thread.
There is no reference to how future VAT rate changes could be handled - this is a point of detail which some may wish to raise in response.

The final statement on the Ofcom consultation was published on 20 December.

BT did not publish its full new price list, to apply from 4 January, on 29 December - I am told that it will be available on 4 January.