The regulatory body for premium rate charged telecommunications services, Icstis, has announced that all companies running premium rate internet services will need a licence to do so. The clampdown is in response to the recent surge in online scams involving rogue premium rate diallers, which have cost unsuspecting internet users thousands of pounds.

The new licensing arrangements will also mean that no telephone network can give out premium rate numbers to companies to run such services until they see written confirmation from Icstis that permission has been granted.

Recent weeks have seen a spate of scams in which internet users’ dialup numbers were replaced with premium-rate numbers without the users’ knowledge. The switch, often triggered by clicking on persistent pop-up boxes – often triggered by visiting adult, music download or IQ test sites – meant that every time the unwitting victim used the web, their computer would dial up via a premium number, usually charging £1.50 a minute. The scam would not become apparent until the user got their next phone bill.

Announcing the move, Icstis Director George Kidd said, "Our new licensing arrangements are the first step in putting a stop to the type of fraudulent activity we have seen of late. We will only grant permission [to use premium rate lines] to those companies that satisfy our stringent requirements. These are currently being finalised but will cover key areas such as clear terms and conditions, user consent, information about how to delete diallers, and responsibility for customer refunds and Icstis fines.”

Icstis’s full requirements for the new licences should be in place by the end of next week, a spokesman said, and shall be fully in force around a month after that.

Icstis regards them as a decent step towards removing “exploitative companies who aren’t providing value-added services” from the industry. However, the regulator stresses that they require the commitment of the networks that supply the premium-rate numbers to help ensure that success.

The networks, said Kidd, “need to play their part. Phone companies have the systems to identify suspicious call patterns and can take action before their customers unknowingly run up huge bills. Those networks that give out premium rate numbers in the first place have a duty to carry out thorough checks on those they give them to and to look at the speed at which they pass money on to them,” said Kidd.

While Icstis is able to fine and close down companies that operate the premium line scams, its remit does not extend to allowing it to take action on the networks. The regulator, however, “will not hesitate to report any networks that perpetuate consumer harm to Ofcom and are confident that they will take swift, tough action against them, “ said Kidd.

A spokesperson said that Icstis had worked closely with Ofcom and the DTI to draw up the new regulations. The rogue dialler scam had been enabled by EU regulations passed in 2002 that classified premium rate service providers as information society services and forbade governments insisting on permission for such services. Icstis’s new regulations get round this by saying the use of the premium-rate dialler itself is subject to licence.