Ofcom is reported to be concerned about the high costs of calling directory enquiries- services, and this looks likely to lead to another examination of this area of the market.

Directory Enquiries?

Historically, up until the 1990s, by calling directory enquiries (for free) you could get a business or domestic telephone number. Directory enquiries was de-regulated in 2003, when calls to the service were charged at a flat rate of 40p.

The now paid-for service is offered by over 200 different providers who can be reached by dialling a six-digit number beginning with 118. These providers supply information from the Operator Services Information System (OSIS). This is run by Directory Solutions, a division of BT Wholesale.

BT’s service is 118 500, but the service that has over 90% of the market is 118 118, and its market position has been built by large amounts of advertising (e.g. TV ads).

What’s The Problem?

The problem as identified by Ofcom is that the prices charged to end customers for calls to these services, and the per-minute prices for connecting (where the provider puts you through to the number you require). Concerns have also been raised that there is a lack of transparency of pricing for the services offered by directory enquiries service providers, and this can particularly affect older people who may have less knowledge about the new-style directory enquiry services. In many cases, this has reportedly led to shock bills.

How Expensive Are These Services?

Ofcom reformed the pricing structure for UK directory enquiries on 1st July 2015, but even under the present system, operators can charge up to a maximum of £23.97 for calls of less than a minute!

Call charges typically consist of an Access Charge (set and retained by the caller’s landline or mobile provider) and a Service Charge (directory enquiries service but it is collected by the caller’s phone provider).

Taking market leader 118 118 as an example, callers to the service can expect a flat-rate connection fee of £7, a per-minute charge of up to £3.50 (which may be much more under other operators) and an access charge of up to 50p a minute from the telecoms operator.

Horror Stories

Horror stories that have surfaced online include a report of someone contacting Citizens Advice after receiving a £150 bill for calling a 118 number.

Ofcom has also highlighted an incident where a consumer who called directory enquiries (in 2009) was presented with a bill for £350.

Choice?

Critics of the current system have pointed out that the de-regulation of directory enquiries has resulted in a failure of choice for consumers.

A new enquiry by Ofcom could mean that a stipulated price cap will be imposed on these charges.

What Does This Mean For Your Business?

Many callers to directory enquiry service provider numbers are seeking business telephone numbers. High prices for call charges could deter potential customers from trying to contact a business via this method at that point. Customers may therefore seek other methods for finding numbers e.g. the Internet. This introduces competition (with the many search engine results and online ads), and businesses could therefore be losing out because of the high directory enquiries call charges. As users of these services, businesses also face the same high costs.

Social media giant Facebook has published adverts in the UK popular press, giving readers a list of ten ways to spot ‘fake news’.

This marks a widening of an ‘educational’ campaign that saw the same message displayed on the news feeds of users in 14 countries back in April.

What Is Fake News?

As the name suggests, fake news describes false news stories, the like of which were distributed via social media, and came to prominence during the U.S. presidential election. Many people believe that these stories influenced the election result in Donald Trump’s favour and that fake news stories seen by the UK population through social media feeds influenced the UK (Brexit) referendum result.

Facebook’s definition of fake news, which is thought to have been kept narrow to avoid accusations of political censorship, refers to news or articles that are intended to deceive, contain objectively provable falsehoods, and pretend to be from a legitimate news site.

What Is Facebook Actually Doing?

As well as the ‘educational’ campaign i.e. distributing fake news spotting advice, Facebook is reported to be taking measures such as finding, flagging and removing fake accounts that fake news stories are being spread and shared from, and decreasing the rankings of fake news e.g. the stories that are read but not shared.

It has also been reported that Facebook will be using two separate third-party fact-checking companies (namely Full Fact and First Draft) to help it to weed out fake news stories, particularly those that appear in the run-up to the UK General Election in June.

There have also been reports from December 2016 that Facebook has given Snopes, Factcheck.org, ABC News, and PolitiFact (reportedly unpaid fact-checking partners) a tool to enable them to label stories in the News Feed as fake.

Criticism

Despite this latest campaign, Facebook has received criticism for quite some time now for now. The kind of criticism aimed at Facebook suggests that it:

• Hasn’t been acting quickly or effectively enough to take down inappropriate and illegal content e.g. hate speech or sexualised images.
• Was slow in accepting any responsibility for the spread of misinformation that appears to have influenced a major election outcome.
• Lacks transparency over its approach to and processes for taking down content and tackling fake news.
• Has launched the new educational campaign to divert attention away from itself and its role in the ‘clickbait economy’, some of which uses fake news.
• Has used the new educational campaign to appease governments, and avoid possible fines (the German government are moving towards fining social networks), while producing 10 tips which could be seen as simply shifting the responsibility for determining the truth and spreading fake news stories back onto the reader.

What Does This Mean For Your Company

The larger picture is that, if Facebook has helped to influence the outcome of the U.S election and UK referendum through enabling the spread of fake news, then this had had a huge impact on the economic environment for businesses in the UK and overseas. This impact will not even be fully realised until after Brexit, and just the uncertainty about the UK’s economic future has already affected businesses.

Some online news businesses and digital advertising providers appear to benefit in the short term for sailing very close to wind with their ‘clickbait’ news stories, and the clickbait economy is therefore likely to continue for some time yet.
It is worth remembering, however, that fake news itself is not new. Many newspapers have been sued and have had to issue apologies for fake stories.

The results of an online survey by YouGov, sponsored by credit reference agency Equifax have shown that 55% of British people think that 3 or fewer verification steps are needed to keep their bank accounts safe from criminals.

Cyber Crime and Bank Fraud Levels Still High

Office of National Statistics (OFT) figures show that in a 12-month period from 2015 to 2016 2.47 million bank and credit account frauds took place in the UK. These were part of a 5.8 million cyber-crime explosion, where 1 in 10 people in England and Wales became victims of cyber-crime.

The results of this latest YouGov survey appear to show that things aren’t improving, as of the 2,000 people asked, 21% said they had previously had either their social media or email account hacked.

3 Layers Needed

These high levels of cyber-crime, plus the fact that bank account details top the list of what people are most worried about having stolen (closely followed by followed by debit or credit card pin numbers), mean that UK banking customers appear keen to keep their account holder verification steps to 3 (or less).

Quality Not Quantity

It does seem, however, that it’s not necessarily the number of authentication / verification steps that should make customers feel secure, but the quality of those steps in terms of how difficult they would be for criminals to crack or get around.

Password and single-step processes have been shown in recent years to be not particularly effective at keeping the criminals at bay. This is partly because people share passwords between online services, and the theft of personal details from one website can, combined perhaps with other hacked data, often lead to easier thefts from other accounts e.g. bank accounts.

Multi-layer authentication is more difficult for cyber criminals to get around and banks and financial organisations are also able to use extra layers of authentication that are invisible to customers.

Increased Security

Banks and financial institutions are now turning to other increased security methods such as biometrics and tactics such as Barclays new debit card controls that allow customers to enable or disable whether their card can be used to make remote purchases, or to set their own daily ATM withdrawal limits on the Barclays Mobile Banking app.

What Does This Mean For Your Business?

Businesses clearly need to be able to effectively protect both their own and their customers’ banking details (note the GDPR regulations next year) from cyber attackers. Determined cyber criminals are now attacking businesses in multi-level ways, including phishing attacks combined with social engineering to steal money and data from businesses, and are using ransomware attacks to extort money. Even Google and Facebook both fell victim recently to a £77 million fraud that relied upon hacking, fake letters and invoices, and human error from staff.

As well as taking at least the basic security measures with systems, practices and password protection, businesses, now more than ever need to educate and train all staff to be able to spot possible fraudulent tactics. Staff should be encouraged and empowered to question and refer any suspicious activity, and clear systems for staff to follow, including carefully verifying new payment requests before authorising them, need to be put in place. Businesses should also make sure that they have up-to-date and workable Disaster Recovery and Business Continuity Plans in place.

Scammers in the Greater Manchester area are using eBay to sell cars that have been stolen and cloned.

What Is Car Cloning?

Car cloning involves using the identifying details of another, legitimate car (e.g. the number plate of your car) to disguise a stolen vehicle or to avoid speeding fines, parking tickets or other offences. The new number plate is either stolen from a legitimate car or purchased online and car cloning criminals even go to the lengths of changing the chassis numbers and accompanying documentation of the vehicles that they are illegally trying to sell-on.

Money Lost

Police have focused their investigation on the Greater Manchester area after receiving reports from several different motorists, all of whom had purchased cars (from sellers in and around that geographical area), but had lost their money and their newly purchased cars when it was discovered that the vehicles were stolen or cloned.

How Does The Scam Work?

Reports indicate that criminals have been using eBay accounts (using fake identities) to advertise stolen / cloned cars, but instead of asking for payment via the eBay platform, they have requested cash on collection from the buyers.

Buyers have then unwittingly purchased stolen vehicles which have had to be returned to their previous owners, with the new purchasers having no comeback and losing all of the purchase cash to the criminals

Victims of the scam are even reported to include a retired police officer who lost £17,000 buying a Mercedes from a seller based in the Rochdale area.

Criticism

Both eBay and the police have faced criticism from out-of-pocket buyers. The police have reportedly been criticised for knowing about the scam for some months but taking no action that was communicated to the victims.

eBay has also been criticised for allowing the criminal accounts to be set up and for not shutting them down quickly enough.

eBay has reportedly stated that it hasn’t been directly contacted by Greater Manchester Police about the incidents and that the eBay accounts in question have now been closed down.

What Does This Mean For Your Business?

When using eBay as a purchaser for business, it is always best to check reviews (number and quality) and percent scores attributed to sellers. It is also good practice to look at the other items they are selling via their eBay shop and to search for their company website in order to help establish their legitimacy. Payments should always be made via the platform rather than in cash to provide some protection and to maintain traceability.

With the use of physical cash in decline, ATMs may need to be modified and reinvented to take on many more banking functions and to offer new services.

Cash In Decline

Despite the high profile media reports for the introduction of a news UK £1 coin, the truth is that physical cash as a popular form of payment is being replaced by cards and smartphone payment systems.

A British Retail Consortium’s (BRC) Payments Survey found for example that cash was used for less than half of all retail transactions across the UK in 2015, and this amounted to 20% fewer transactions made with cash than in 2011. Debit cards now make up around 40% of transactions in the UK, and 54% in terms of overall value of retail sales.

Drivers

Card issuers are essentially driving the change in customer behaviour by introducing innovations like contactless payments. Contactless technology is popular for lower value transactions that have traditionally been the mainstay for cash. 55% of cards now feature contactless technology.

Retailers have, therefore, invested heavily in new payments technology so that it is easier and quicker for customers to securely complete transactions in store, and it is easier, cheaper and faster for retailers to get paid.

The trend of declining cash use in favour of cards is not just in the UK, but is happening worldwide.

What To Do With The Millions of ‘Cash Machines’

The primary function of an ATM is to dispense cash and there are an estimated 3 million ATMs worldwide with numbers growing in some area of the world like Brazil, Russia, India, China. In some countries where cash use is lowest e.g. Sweden, there is a relatively low number of ATMs (333 machines per one million inhabitants).

The problem is, therefore, that there are millions of cash dispensing machines for a worldwide population that is moving away from using cash, in favour of card-related technologies.

The solution, for the time being, is thought by many to be a reinvention of the ATM and a widening of the range of banking services (and perhaps other functions) that ATMs provide.

Example

An example of where this is happening is in Portugal, a country that has the highest proportion of cash machines in Western Europe. ATMs in Portugal are part of a fully integrated cross-bank network and offer customers a range of other bank-related functions and services e.g. cash and cheque deposits, purchasing cinema and concert ticket purchases, tax payments, bill payments, and mobile phone top-ups.

New Ideas

Other innovative technology-based ideas for the reinvention of ATMs include:

• Making self-service ATMs that are more like tablet computers e.g. with swipe, pinch and zoom functions.
• Drive-through ATMs that allow people to complete withdrawals or transactions that they started on their phones.
• Contactless cash machines. Barclays, for example, are taking steps to avoid the threat posed by card skimmers with a trial of a system that allows customers to withdraw money from ATMS using only their smart-phones.

Anonymity Still Valued

Some people still prefer the anonymity of cash, as EPOS style systems have long-allowed companies and marketers to gather data about us and to profile us.

What Does This Mean For Your Business?

Technology and financial commentators both broadly agree that ATMs are certainly not dead yet. For many small businesses and sole traders in the ‘real-world’, cash payments from customers are still very practical and preferable. A bundling of other services into ATMs could also represent an opportunity for some businesses to reach customers through an established and frequently used network e.g. nationwide. Most of us know, for example, where our local ATMs are, and we are frequent visitors to them. This behaviour and knowledge instilled in the marketplace, and built-up over time has potential value for companies who can maintain this through clever ATM reinvention ideas.