Law sought for premium phone line promotions

Director of Consumer Affairs Carmel Foley is to ask the Government to crack down on postal competitions and promotions that encourage consumers to phone premium rate lines.

Her call follows a large volume of complaints last week from consumers who were sent four mock "cheques" with denominations up to €75,000 by an organisation called Value Group.

These were accompanied by a letter directing them to call four separate phone lines at rates from €2.40 a minute to claim an "award".

Although the fine print of the letter stated that the cheques had no face value, a number of recipients rang the lines and alleged they were charged up to €18 a call.

Regtel, the telecommunications regulator for premium rate services, has ordered the phone lines to be shut down pending an investigation of the complaints.

Regtel has a code of practice governing the operators of premium rate services and can direct the closure of lines that breach the code. However, its powers do not extend to the companies that use the phone lines to run their promotions.

In response to the complaints about the Value Group promotion to the Office of the Director of Consumer Affairs, Ms Foley said she did not have the power to stop such promotions.

"I really think these things are a virus, but we don't have the legal powers to get rid of them. In this case they may not be breaching the law and I'm sure they will have had their legal advice, but to many people, particularly older people, a cheque is a cheque and they will have taken it at face value."

One penalty the company might face is a loss of earnings if the phone line is shut down before it recovers its postal costs. In addition, if the complaint is upheld by Regtel, the money collected by the phone operator may have to be repaid to the callers.

However, the company would not be prevented from starting another promotion using premium rate lines.

"Given that they are not covered by consumer legislation at present, I am consulting with our legal advisers and intend to ask the Government for legislation to be enacted that would cover their operation."

The Value Group promotion was run by Promocom, a Dublin-based company which has run several other promotions using premium rate lines.

Regtel last year shut down a premium rate line used in a scheme that ran under the name Parcel Plus.

Thousands of householders were sent postcards from Parcel Plus saying that an overseas parcel was waiting for collection, and were directed to ring a premium rate line to arrange collection of the parcel.

Parcel Plus was a Promocom- run scheme.

Attempts were made to contact its directors Gavin McConnon and Iain McConnon. However, neither was available at any of the Dublin phone numbers registered to the company.

A Value Group customer contact line was also out of service.