DTI to crack down on cheap phone firms

Unlicensed operators that lease lines and sell cut-price overseas calls are to be subject to investigation, reports Paul Rodgers

THE Department of Trade and Industry is preparing a crackdown on unlicensed operators offering cheap international telephone calls in order to protect customers.

More than a dozen companies have received licences to operate "simple international resale" services, but at least as many more are operating through loopholes in the department's regulations.

"We've got work in progress to tighten up the enforcement process," said a DTI spokesman. "Customers need to be assured that the operators are reputable."

The department, headed by Board of Trade President Ian Lang, would not say exactly what action it plans to take. "Until we've completed the work it would be difficult to speculate about what it will be," the spokesman said. Nor would the DTI identify which companies it has targeted.

"There are definitely firms that have come and gone, that opened systems and then didn't deliver what they said they would," complained one industry insider.

The businesses lease high- capacity international lines from telecommunications giants such as BT and resell time on them for as little as 14p per minute to the US. BT's peak rate to the US is 40p a minute and its lowest is 38p.

Most of the mavericks take advantage of rules that allow them to set up closed networks - essentially private clubs - rather than offering a service to everyone. A few get around the regulations by running a call- back operation from the US. Customers dial into a computer in the US, key in their PIN numbers and the phone number they want to reach, then hang up. The computer then dials both the customer and the party he wishes to reach, so the cheap calls originate outside the DTI's jurisdiction.

Both licensed and unlicensed companies usually require up-front payments before their services become available. But there are no checks on the financial soundness of the unregulated firms. Nor are they subject to security checks to make sure that callers are guaranteed privacy.

The threat of stiffer enforcement was welcomed by established operators, who fear one high-profile collapse could tar them all.

"Several companies in the US were not regulated and did not fulfil their obligations to their customers," said Marc Citron, finance director at First Telecom Plc. "My concern is that it's going to happen here." A number of reputable operators have asked for action to be taken.

Just because an operator is unlicensed does not necessarily mean that it is dodgy, however. Swiftcall, one of the first call resellers, which was set up by entrepreneur Tom McCabe, was in business for years before coming formally under the DTI's authority. "The DTI eventually, after a long period of investigation, exonerated us and at the same time gave us our licence," said Graham Milne, the company's general manager.

However, the licence was issued to Golden Pages Jersey Ltd, also owned by Mr McCabe, in order to save the department embarrassment. He is currently in the process of legally transferring Swiftcall's assets and business to the new entity.

Mr Milne blamed the delay in getting his operation a licence on DTI footdragging. "It took us two years, much heartache and much pain to get a licence from the date of our first application," he said. "It should have taken four to six weeks."

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
News
news
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week