'It's a rip-off to be charged extra just for talking to my own bank': 0845 numbers to be replaced ahead of likely ban

Updated: 05:54 EST, 7 July 2014

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Rip-off: Customer Melissa Mumby is pleased First Direct has ended 0845 calls

Expensive enquiry phone lines used by banks are likely to be banned next year, but some providers are already scrapping them.

Under the Consumer Rights Directive introduced by the European Union last month, many businesses are now prohibited from charging premium phone rates for customer enquiries and complaints.

Financial services companies and public bodies are exempt from this new law, but City regulator the Financial Conduct Authority wants banks, building societies, insurers and investment brokers to be included.

It is consulting with the industry on the issue and is likely to impose a ban next year.

In advance of the regulator’s intervention, First Direct, the online banking arm of HSBC, has just dropped its 0845 numbers, replacing them with an 0345 dialling code. This means that instead of paying up to 41p a minute from a mobile phone, all callers will pay a standard call charge.

Although on paper the charges levied for 0345 calls can be similar to those for 0845 numbers, consumers still save money because these calls typically come free in mobile or landline package deals.

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Other banks are not being so proactive. Santander and Lloyds Bank are among those still to commit to ditching high-charge phone numbers.

HSBC says it will also drop its expensive phone charges in line with First Direct, but it has yet to confirm when. Barclays and NatWest have converted some numbers to 0345, but not all.

Charges: The numbers that the banks currently use can be expensive to call

Melissa Mumby, 23, from Huddersfield, West Yorkshire, switched bank accounts from HSBC to First Direct seven months ago, lured by the promise of £100 as a sweetener if she made the jump.

Advertising assistant Melissa says: ‘I probably only phone the bank with queries once or twice a month, but when I do I can be chatting for several minutes. It seems a rip-off that I should be charged extra just for talking to my own bank. So I really welcome what First Direct has done. Let’s hope all the banks follow suit.’

Melissa has a landline phone package with Virgin Media and an O2 mobile phone deal – and both cover 0345 calls within the inclusive minutes. So when she rings First Direct in future, it will cost her nothing extra – unlike 0845 calls.

John Cottrill, of consumer lobby group Which?, says: ‘It’s not right that banks should be let off the hook with regards to the use of expensive phone numbers. Many people now prefer to deal with their bank on the phone and should not be forced to cough up extra money.

‘Most people think companies use high-rate numbers to discourage calling. It sends out a clear signal to customers that they are not really valued.’

Communications watchdog Ofcom is separately introducing new guidelines to make it easier for users to understand dialling codes and their costs.

FOLLOW THIS GUIDE TO MAKE SENSE OF THE CODES AND AVOID CHARGES

0345
Levied as a geographic call with the cost depending upon the time of day. Typically, the cost is up to 10p a minute for calls made from a landline. Calls from a mobile cost between 10p and 40p a minute. But calls from landlines and mobiles should be included in any ‘free-call’ package deal.

030
This prefix is offered by not-for-profit charities and public bodies, such as local government and Revenue & Customs. As with 0345 landline use, calls cost up to 10p a minute, with mobiles costing between 10p and 40p a minute. But again, calls from landlines and mobiles should be included in any free-call package deal.

0800 and 0808
Freephone numbers that do not cost the caller a penny from a landline. But if you dial from a mobile phone there may be a cost – the operator should warn you before making a connection – of between 14p and 40p a minute.

0845/0844/0843
Calls from a landline are charged at between 1p and 11p a minute, depending on time of day. There may be a minimum call charge of 14p. Mobiles cost more – between 14p and 41p, depending on the network provider and time of day.

0870/0871/0872/0873
These can be more expensive than 0845 numbers under Ofcom guidelines. Calls cost between 1p and 11p a minute from a landline, depending on time of day. Mobiles cost between 14p and 41p a minute.

09
This prefix means a premium rate charge of between 9p and £1.69 a minute from a BT landline, or up to £2.60 from others. Mobile calls cost between 50p and £2.50 a minute. Typically used for competitions, chat lines, recorded information and professional advice hotlines.

Freephone numbers that begin 0800 or 0808 will be extended to mobiles from next June. Business-rate numbers, including 0845 and 0870, will have to show clearly how the extra costs levied to phone users are broken down.

Business line charges vary as their profits are shared between the business that set up the line and the phone company offering it. Individual deals often depend on the business’s bargaining power, with bigger ones having a greater say.

Charges also differ depending on whether you call from a landline or mobile. From next June all callers will hear a recorded message with details of the cost per minute and any separate phone line access charges. This breakdown will also be included on phone bills.

An Ofcom spokesman says: ‘Currently, callers to non-geographical service numbers are not generally informed how much they are charged.

‘In future, the costs will be broken down to show the access charge levied by a phone company and the service charge taken by the company called.’

Christopher Woolard, a director at the Financial Conduct Authority, says: ‘It is not fair that customers often have to use expensive phone lines when calling firms to ask for help or to complain. We would welcome companies changing the rates they charge for phone calls ahead of our consultation.’