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Study by ACM: more transparency from directory assistance providers does not eliminate deception

The Netherlands Authority for Consumers and Markets (ACM) had a study carried out about whether consumers are misled by advertisements and websites by directory assistance providers. Directory assistance providers are companies that put callers through to a number (often a toll-free one) of an official organization or company, such as the Dutch Tax and Customs Administration, the police, or the Public Health Service (GGD), while charging them a rate of 90 cents or 1 euro per minute. Such providers advertise a lot on online search engines such as Google. As a result, consumers often see ads of directory assistance providers among the top search results when searching for the number of a company or an official organization.

The study into the ads of directory assistance providers shows that 72 percent of respondents that had the intention of making a call did not understand that they were calling a directory assistance provider, and 77 percent did not understand what the costs were, even if the ads met the requirements, such as explaining who they are, that they put callers through, and that callers keep on paying after being put through. After explaining to respondents what a directory assistance provider is, a large majority of respondents (83 percent) say they do not wish to call a directory assistance provider when looking for a phone number. Only 5 percent would like to use directory assistance services.

Deception (misleading practices) is an important topic for ACM, because it harms consumers’ confidence in the economy. Furthermore, deception also causes financial damage to consumers. In 2020, the combined turnover of 55 directory assistance providers was almost 10 million euros. If 5 percent of consumers say they wish to call through directory assistance providers, it represents a substantial amount in terms of consumer harm each year.

ACM takes action if, according to the law, there is a lack of transparency with regard to, for example, the costs of directory assistance services. For example, ACM has imposed orders subject to periodic penalty payments on various market participants. However, this study into ads of directory assistance providers shows that, even with such actions, ACM was not able to prevent consumers from being misled.

Annemarie Sipkes, Director of ACM’s Telecommunications, Transport and Postal Services Department, says: ‘People feel misled afterwards, even if a directory service provider was transparent about who they were, and what the costs were. Together with the Dutch Ministry of Economic Affairs and Climate Policy, ACM will explore how such consumer harm can be prevented in the future.’

Background

For many years, ACM has received complaints about directory assistance services, often from people that were shocked when seeing their phone bills. In response to those complaints, ACM in 2019 published guidelines in which it explained to directory assistance providers how they are able to prevent consumers from being misled by improving transparency. With this study, ACM checked whether those guidelines have actually resulted in consumers no longer being misled by directory assistance providers. Unfortunately, this study has revealed that this is not the case. A majority of respondents that decided to use a directory assistance provider on the basis of an ad or website really did not know whom they were calling with, or what the costs were, even in cases where the guidelines were met. With the guidelines, ACM gave an interpretation of the law. For more drastic measures that protect consumers against such practices better, an adjustment to the Number Plan is needed. The Number Plan stipulates what numbers can be used for what types of services.

About the study

The study was conducted from December 8 through December 14, 2020, by independent research agency Motivaction among 2,472 respondents from Motivaction’s own database. The sample is representative of the Dutch population (between the ages of 18 and 80) based on educational level, age, sex, region, value orientation, and all combinations thereof.

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01-04-2021 More transparency from directory assistance providers does not eliminate deception (in Dutch)