Customers ripped off by premium rate phone services, including rogue diallers, look set to get refunds in future following recommendations published today by Ofcom.

Ofcom, the UK communications regulator also said that premium rate services regulator ICSTIS, will be given greater powers to tackle the cowboys in the industry who deliberately set out to rip off consumers.

The changes come in response to a huge rise in complaints from consumers about premium rate services lead to discussions between Ofcom, the Department of Trade and Industry (DTI) and ICSTIS. The DTI formally requested that Ofcom conduct a review of the current regulatory arrangements with a view to improving measures to protect consumers from fraudulent and unscrupulous activity in the premium rate industry.

One of the key recommendations, which ICSTIS has said was necessary, concerns changing how the telecoms companies pay the premium rate services companies.

Currently phone companies pass on the revenue from these calls within about three days. Ofcom said this money must not leave the phone companies for 30 days. This would give consumers more time to challenge their bills before the money has changed hands.

Ofcom also said phone companies must refund consumers when ordered to by ICSTIS, which will also be able to impose sanctions, including fines against phone companies for breaches of regulations. The DTI is also considering increasing the maximum fine of £1000,000 that ICSTIS can currently impose.

The key recommendations detailed in today?s Report include:

Phone companies that lease premium rate numbers to service providers must provide ICSTIS with detailed and accurate information on the identity of their service providers.

Phone companies must not pass revenue on to their service providers for 30 days.

Service providers must have adequate customer service and redress processes.

Where ICSTIS orders a service provider to refund consumers, phone companies must make funds withheld by them available for consumers to claim redress for three months.

ICSTIS will be able to impose sanctions, including fines, directly against phone companies if they fail to meet their obligations under ICSTIS? Code of Practice.

The DTI should consider increasing the maximum fine, currently £100,000 that ICSTIS can impose.

Ofcom and ICSTIS should take the lead in encouraging phone companies to produce a voluntary code of practice covering the monitoring of call traffic and information sharing.

ICSTIS will consult on how best to implement the recommendations through its Code of Practice in the New Year.