Internet scam firms face higher fines

Internet scam firms face higher fines

Firms that dupe consumers into using premium rate internet connections are to face larger penalties, the Department of Trade and Industry announced today.

Companies will be fined up to £250,000 - more than double the current maximum of £100,000 - if the plans go through, the e-commerce minister, Alun Michael, has said.

The move is part of a government consultation on the premium rate service, following a review by communications watchdog Ofcom, and is backed by Icstis, which regulates premium rate calls.

The proposals will require minor changes to the Communications Act 2003.

"I'm determined to see that consumers are protected against rogue firms abusing the phone network and bringing misery to millions with nuisance calls," said Mr Michael. "That's why I've made sure that the government, Ofcom and Icstis work together to tackle the problem.

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"We all have the right to use the internet without the fear of being exploited by firms who prey on consumers. Customers have unwittingly run up hefty phone bills when their automatic dial ups get locked in to a premium rate number.

"I want to see an end to that, and thanks to the work of Ofcom and the enforcement efforts of Icstis, I'm determined to achieve that."

George Kidd, director of Icstis, said: "Our current fine limit of £100,000 is no longer sufficient to deal with the worst services we see.

"A new fine limit, combined with the other proposals in the Ofcom review to strengthen consumer protection, should ensure that the relatively small number of rogues out there do not continue to damage trust and confidence in the entire premium rate industry."

The Ofcom review was carried out after an increase in complaints about premium rate numbers in 2004, fuelled by a spate of rogue dialler scams.

Thousands of internet users fell victim to the scams, which trick computers into dialling premium rate lines. The scam relies on hidden software being installed on computers. The software installation is often activated when users close unwanted pop-ups on their screen,

Thousands of people received phone bills running to hundreds of pounds as a result, leading to calls for more protection for consumers.

Guardian Unlimited © Guardian Newspapers Limited 2005