Gadget17's Gazette

R U Gettin Scamed?

Well you now have somewhere to complain in the form of a website set up to take complaints.

"The Grumbletext site publishes your SMS texts about UK companies who suck - within minutes"

They also have a database of submitted Gumbles of Scam (and I shall be adding some soon).

You can complain to them by texting, online form and E-mail.

So why not Name and shame them on Grumbletext.

Stamping out premium rate cons -
Grumbletext points the finger at big UK telecoms companies

‘Missed call marketing’ is the latest premium rate scam to be afflicting consumers. Widely reported in the press, it is just the latest in a long line of premium rate scams which do a great deal of consumer harm, but which apparently can’t be stopped by the authorities.

Not true, says Grumbletext, a UK consumer complaints website which hears from a lot of consumers duped by these cons – the scammers could be put out of business practically overnight, but to do so requires a crackdown on a small handful of big UK telecoms companies who provide them with the premium rate lines.

Premium rate scams are all designed for one purpose – to get consumers to call 090 premium rate lines typically at a cost of £1.50 per minute. Consumers are usually told that they have ‘won the £2,000 prize’ or similar and that in order to claim it they need to call the 090 number supplied. The result is typically £15-20 on your phone bill with nothing to show for it – there is no £2,000, it’s a straightforward scam.

The companies behind these scams are employing increasingly cunning methods to get you to fall for their con. With ‘missed call marketing’ marketing for example, a scammer’s computer calls your phone, immediately hangs up, leaving a missed call message which of course contains the number to call back. If you do so, you are back into the £2,000 prize scenario and are asked to call an 090 number to claim it.

Missed call marketing is, in the words of ICSTIS, the premium rate regulator, ‘completely illegal’, so how is it that it, and premium rate scams like it, are able to continue?

Here’s the problem; ICSTIS only directly regulates ‘service providers’ as it calls them. The ‘service providers’ are the companies who market the scams, often via text message or missed call marketing, and who lease the 090 premium rate lines from UK telecoms network operators from whence they make their money.

These companies almost invariably follow the same model; they are usually very recently set up, often for the purposes of the specific scam they are perpetrating. There is the minimum of statutory information filed at Companies House and if they get into trouble they just dissolve and disappear. The same director names will often appear in association with a myriad of such companies. It is quite usual also for these companies to be offshore and thus realistically even further out of reach.

Trying to beat these companies with the rod of regulation is ICSTIS’s thankless task. ICSTIS will typically fine those service providers who break its code of conduct and request that the network operator bars the service. The fines are collected by having the network operator retain sufficient of the service provider’s revenues to pay the fine. However, ICSTIS does not have the power to fine network operators themselves, nor to restrict their ability to do business in any way.

And what if the network operator doesn’t play ball? What happens if the network operator fails to collect the fine for ICSTIS, or it chooses not to bar the service? Unfortunately there’s not much that ICSTIS can directly do about it. It is supposed to be able to then approach Ofcom, which regulates the network operators, and attempt to get them to intervene. Ofcom has the power to suspend or revoke the network operator’s license, the ultimate sanction, so one suspects that if Ofcom chose to deal with the offending network operators, it would be straightforward.

For whatever reason, that appears not to be happening. ICSTIS is well aware of the network operator problem, as demonstrated in the forthright industry open letter written by the chairman Sir Peter North in September 2003 in which he lambasted the handful of networks who ‘continued to contract with service providers they know are intending to run this type of service’.

Grumbletext’s analysis of information on both the ICSTIS and Grumbletext websites has revealed that it is indeed only a handful of network operators actively engaged in this grubby business. At the time of writing, 85% of all premium rate landline-based complaints on Grumbletext are accounted for by clients of the following five companies:

Redstone has so far made few appearances in ICSTIS’s monthly list of adjudications; its high showing on Grumbletext is mainly as a result of its operating the lines for the well-known ‘BPQ voicemail’ scam, which is sufficiently recent that its investigation is believed to be still in progress.

However, second on the list, and well known to ICSTIS, is AIM-quoted Intelliplus Group PLC, recently acquired by Eckoh Technologies. The traditional argument which Intelliplus and the similar network operators make when confronted on these issues is that they have many, many clients, running thousands and thousands of lines, and it is simply not possible to police what is on them, especially since they do not know how the promotion was promoted in the first place.

In Grumbletext’s view, that is a very convenient argument which simply does not stack up. In reality, the actual structure and phrasing of these scams on the recorded telephone lines makes them stand out a mile. It is technologically fairly trivial to set up computerised monitoring of line content to alert for some of the wording these scams all employ.

In any case, they make enough money from these lines to simply employ people to spot check the content. What is not always clearly understood is that the network operators like Intelliplus who lease these lines to the scammers aren’t just making nice bit of line rental – they are typically taking about 50% in shared revenues of everything the scammers earn.

So Intelliplus make a pile of money enabling the premium rate scammers to operate whilst themselves remaining outside of the reach of the one regulator in the sector which has some appetite to take action. No wonder they are not falling over themselves to comply with ICSTIS’s requests with alacrity and timeliness.

ICSTIS has said in the Guardian, February 18th 2024, that “Intelliplus had not been co-operating fully with its inquiries". That's a reasonably strong statement for a regulator. However, it appears to be somewhat of an understatement when considered alongside the following facts, culled from ICSTIS’s own website and from correspondence between ICSTIS and Grumbletext.

With regard to fines levied in 2003 by ICSTIS on service providers involved in the promotion of inappropriate premium rate services via unsolicited text message:

• 26% (15 out of 58) of the service providers fined by ICSTIS were clients of Intelliplus

• By value of fines levied, 69% (£166,000 out of £240,000) was accounted for by clients of Intelliplus

• Of the £166,000 of fines against Intelliplus clients, at least 28% (£46,000) remain unpaid (Grumbletext is awaiting to hear from ICSTIS on the status of an additional £65,000 of such fines, a proportion of which may well also remain unpaid)

It is Grumbletext’s view that the continued widespread existence of premium rate scams suggests that ICSTIS fines, even when paid, are not big enough to make the promotion of these scams uneconomical; it is quite possible that the scammers merely view a potential ICSTIS fine as a marginal cost of doing business, and for the Intelliplus’s of this world, there is no downside.

What can be done? In theory, it's really very simple; Ofcom needs to semi-formally devolve its regulatory power to ICSTIS in this specific area of premium rate line leasing, to enable ICSTIS to bring sanctions against network operators with the full power of the law and statute behind it.

ICSTIS after all is an industry self-regulating body, and on this basis only semi-formal, in that it is non-statutory - even today, ICSTIS has no regulatory power which Ofcom has not directly sanctioned. There seems no good reason as to why ICSTIS's powers should merely be to regulate and fine ‘service providers’ involved in the inappropriate promotion of premium rate services. It seems a short step to extend that existing power to bring the likes of Intelliplus, the network operators, within its reach.

And if Intelliplus were not then to accord ICSTIS, as Ofcom’s agent, the same authority as Ofcom, then Ofcom has the power to suspend or revoke Intelliplus's network operating license, i.e. its ability to do any telecoms business of any type at all.

However, as we all know, expecting a ‘super-regulator’ to do anything quickly is a vain hope. With that in mind, Grumbletext is currently exploring the viability of using the Grumbletext website as a means to organise scammed consumers to launch a class legal action against Intelliplus and its ilk. The odd lawyer posting on the site has bandied around phrases such as ‘obtaining goods by deception’.

The idea is simple; to use technology to help eradicate these scams, which are themselves enabled by technology. They all rely on the idea that they can get away with taking a little bit of money from a great many people, none of whom individually would consider legal action to recover it. All communication with class action co-plaintiffs will be effected via the Grumbletext website, email and text message.

Indeed, to register for the class action, consumers will send a text message to Grumbletext for which they will be charged £1.50; this covers the cost of the insurance necessary to pay for legal costs should the case be unsuccessful – using premium rate to beat premium rate; it’s kind of ironic really…

In order to assess consumer appetite, Grumbletext has set up a special page on the website (www.grumbletext.co.uk) where you can find out more about the proposed class action and request to be contacted when the lines open for registering as a plaintiff.

Enquiries
Contact: Adrian Harris, LiveWebs Ltd t/a Grumbletext
Tel: 020 7244 9099 Mob: 07931 381198
Email: [email protected]