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0845 service charges, Do we think "penalty exceeds" if a service charge is > 0?
cp8759
post Mon, 2 Jul 2018 - 16:39
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As is common knowledge, Ofcom changed the rules a while back so that you can no longer advertise an 0845 number and just say "national calling charges apply" or similar BS. The official guidance published at https://www.ofcom.org.uk/phones-telecoms-an...all-really-cost says:

"The cost of calling 0843, 0844 and 0845 numbers is made up of two parts: an access charge going to your phone company, and a service charge set by the organisation you are calling.

The service charge for calls to 084 numbers is between 0p and 7p per minute.
"

https://www.ofcom.org.uk/phones-telecoms-an...-for-businesses says:

“What you need to do
Review all your materials and advertising. If your business or organisation is contacted on a number beginning 084, 087, 09 or 118, you must ensure that your service charge is clearly displayed wherever you advertise or promote that number. The service charge should be prominent and in close proximity to the number itself. The recommended form of wording is:

“Calls cost xp [or xp per minute] plus your phone company's access charge.”


Let's ignore for now the fact that councils are in likely breach of regulations made under section 59 of Communications Act 2003 because they don't publish the charges anywhere, as that wouldn't have a direct impact on the validity of a PCN (fear not I've raised the matter separately with Ofcom).

I've been collecting data via FOI on what the service charges are, these are the results to date:



And here arises the difficulty: If the council runs the 0845 number themselves, it's all clear cut: The service charge money goes to the council, therefore a penalty exceeds case is very easy to make. But what about a service charge that goes to the pocket of a third party? Is that lawful or not?

There are two possible interpretations I can see:

A) The service charge is an unlawful charge that the council is demanding is paid to a third party, the fact that the council doesn't pocket the money is irrelevant. It's a bit as if they said you can pay online using a third party payment processor, who will charge you a "checkout fee", the fact that it's the third party that pockets the money makes no difference. The service charge cannot be compared to the cost of a stamp that would be incurred in a postal payment, because that would be the equivalent to the access charge for an 0845 number (i.e. the cost incurred by the payer to get his payment to the council). Therefore the council should use a different telephone number (be it 0345 or 020 or whatever) or an 0845 number with a zero service charge. By using a third party provider that charges a service charge the council is likely gaining a financial benefit (as it stands to reason that it's cheaper for the council to use a payment provider that also makes money off the 0845 service charge), but even if it isn't, the service charge is unlawful.

B) The service charge is not going to the council, it's going to a third party and the cost of the service charge is equivalent to the cost of a stamp on a postal payment. Therefore the penalty exceeds grounds do not apply.

So, what do we all think?


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post Mon, 2 Jul 2018 - 16:39
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cp8759
post Tue, 4 Dec 2018 - 22:49
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Interesting response from Cambridgeshire County Council https://www.scribd.com/document/394914664/FOI-875436-IR-RES

They've mitigated their payment processing costs to the tune of £1,449.62 so it'll be hard for them to argue that they get nothing out of it.


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DancingDad
post Wed, 5 Dec 2018 - 09:50
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QUOTE (cp8759 @ Tue, 4 Dec 2018 - 22:49) *
Interesting response from Cambridgeshire County Council https://www.scribd.com/document/394914664/FOI-875436-IR-RES

They've mitigated their payment processing costs to the tune of £1,449.62 so it'll be hard for them to argue that they get nothing out of it.



Not sure mitigated is the right word?
The sum is income which is then used to pay a bill, simples.
Doesn't matter that the bill is phone services, doesn't matter that the council does not "see" it, the income derives solely from a charge added to the penalty.
A charge that is within the control of the council whether or not it is part of an external contract.

Nice one CP.

This post has been edited by DancingDad: Wed, 5 Dec 2018 - 09:57
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The Rookie
post Wed, 5 Dec 2018 - 10:07
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"We've reduced our processing costs"="we're making more money".


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cabbyman
post Wed, 5 Dec 2018 - 12:48
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So, what use to be made of it?

Keep quiet and win every appeal or make it public and they change their PCNs?


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DancingDad
post Wed, 5 Dec 2018 - 13:37
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QUOTE (cabbyman @ Wed, 5 Dec 2018 - 12:48) *
So, what use to be made of it?

Keep quiet and win every appeal or make it public and they change their PCNs?



Makes no difference really, once councils start losing appeals they will know they have to change their payment structure.
Using an 0845 is not the issue, it is whether they benefit by it at the expense of the punter and effectively increases the penalty.
Even if it made national headlines, would probably still end up being argued at adjudication and possibly via judicial review.

Thoughts of a panel decision a la Miller re video viewing also comes to mind, all these things only last a period of time before the loophole closed in one way or another.


At the moment, CP is doing an excellent job in collating and pointing out the issue to OPs as needed, not AFAIK, come to a head with adjudicators yet in any meaningful way.

This post has been edited by DancingDad: Wed, 5 Dec 2018 - 13:38
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cp8759
post Wed, 5 Dec 2018 - 20:29
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There's two or three in the pipeline that are going to adjudication on this point alone.


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PASTMYBEST
post Thu, 27 Dec 2018 - 12:29
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Wife's cousin got one yesterday from Trafford. bang to rights on the contravention so the 0845 number only. He has authorised me to act on his behalf and take it to adjudication.

Will post docs when I've got a bit of time to scan them


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