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Lord Lucas: My Lords, I shall speak to Amendment No. 69A, which stands in my name. I am extremely grateful to the Minister for giving me the Government's attitude to the amendment before I speak to it. It will shorten my comments. I am also very grateful to my noble friend Lady Buscombe for moving my amendment in Committee and for the Minister's extremely helpful reply.

We agree that the current system is well catered for in the Bill as drafted, and that the current situation can continue under the Bill as it is. My difficulty is that I am not at all happy with things as they are now. I would like the Bill to strengthen ICSTIS's mettle when dealing with certain current abuses. I find two such abuses particularly offensive.

The first is scratch cards that drop out of magazines regularly with the promise of a large prize. Of course, everybody has won. You then phone a premium rate number to find out what you have won. The card states that the call will cost seven quid or whatever. Although it lists many prizes, what almost everybody has won is the right to pay more money—about ninety quid this time—to the company promoting the competition to learn more about the holiday that you might win if you pay yet more money.

That is as close to fraud as anything. Not only is the whole business rotten, but there are glaring inadequacies in the wording that ICSTIS has permitted on the cards. First, no identifiable company or person is involved in promoting the competitions. Usually there is an accommodation but no proper name or means of contact. Secondly, no proper information is given on the chances of winning any of the other prizes or the real value of those prizes. So far as I can work out, the chance of winning the monetary prize—that is what hooks you—of 15,000, for example, is around 140 million to one, which is 10 times lower than the national lottery. But that is nowhere stated on the card. You must read the very small print of associated papers to discover that the prizes are on offer over a very long period and apply to only one card that may not have been received, let alone posted. There is no easy way of finding out who has won in the past or what their bona fides are.

From many points of view, the business is clearly run on the basis that those funding it pay less than the person providing the service—a great deal less, because there is much wastage in the system. It is clearly a bad deal for people, but that is not disclosed. ICSTIS is allowing that to happen and intends to allow it to continue. I would like to see something stronger in the Bill to deal with it.

My other problem is competitions promoted on radio and television in which you must ring a premium rate number for a chance to win a prize. Again, you are given no information on your chances of winning. You

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may have an estimation of the prize value—a Centre Court ticket for the finals at Wimbledon, or something nice—but you are not told the chances of winning, so you have no idea whether it is worthwhile shelling out a quid. Indeed, the reason that the competitions are so frequent is that it is not worthwhile. People ring in enormous numbers, and businesses can garner a great deal of money from offering such competitions on premium rate services. I do not object to the practice, but the consumer should be offered a proper level of information. Again, ICSTIS appears to have no plans to change that. I should like to see something in the Bill that focused the attention of ICSTIS on the interests of the consumer, and not for it to say that there is only a limited space on the ticket and one cannot include everything—or to say that there are some uncertainties over how many people will ring in response to a radio appeal, so that one cannot give any information. It is not acceptable that one cannot do anything because the matter is difficult. There are barriers that we have overcome in many other areas of consumer businesses—not least the education service—and I would be delighted if the Bill added an extra tooth or two to bite on the shameful laxity of ICSTIS in not dealing with these abuses of the system.

5 p.m.

Baroness Howe of Idlicote: My Lords, I rise briefly to support the noble Lord, Lord Lucas, in the points that he has just made. The Minister might be right in the phrasing of the amendment, but could we have more detail of exactly what the circumstances are in these types of competitions? People do them once, maybe they do them more than once. If they do them once, then caveat emptor, theoretically. But, as we all know, there are some people who are rather more gambling-orientated than others.

The matter that needs addressing, although it might not be possible in this Bill, is the extent to which one should be told the benefits up front, and who has won—if anyone. All the details should be there. At the moment, either they are not, or they are in such small print that it becomes a complete fraud. The matter is not just about things that fall out of magazines, although that does happen. Magazines such as Reader's Digest also go in for this sort of thing, which surprises and horrifies me. It would be interesting to know from the Minister whether this Bill is an appropriate place to take action, or whether there is some other way in which we can grapple with this question.

Lord Avebury: My Lords, I intend to make a long and boring speech on this matter—particularly as everybody else has said they shall make short and snappy speeches. However, it might turn out to be the other way round—that those who say that they shall make short speeches go on at great length. My speech, which starts with the opposite undertaking, will not detain your Lordships for long.

I agree with the thought that lies behind the amendment of the noble Lord, Lord Lucas. Might the matter not be better dealt with by the use of the code? ICSTIS has just published, in draft, what it calls the

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Communications Bill version of the code of practice and sought comments by 16th June. That date has only just passed, so if the noble Lord sends ICSTIS a copy of his speech, it might be able to think about the matter and see whether it would be possible to cope with the kind of annoyance and sharp practice that he has outlined. He gave a specific example that is nowhere near the general grounds that he attempts to deal with in Amendment No. 69A.

The current ICSTIS code does not mention 3G—the third generation mobile phone networks—which are likely to offer services of the kind that were described by the Minister, such as video conferencing over the Internet. That would cost much more than the 20 limit, which leads to automatic cut-off under the present code. It would be useful for the suppliers of 3G and other advanced networks to have read the comments of the Minister about the likelihood that business-to-business video conferencing would be given prior approval. They will be reassured by his reaffirmation that the code would not discourage innovation and investment in new forms of content-based communications.

I was not certain how to interpret the Minister's comment that such a provision in the Bill would inhibit the regulator from dealing with many of the matters that are counter-productive in the present habits of some of the fringe operators in the PRS system. Incidentally, the draft code has to be approved by Ofcom, under Clause 118. Will the Minister give the earliest date that this would happen? What rules would apply to services offered by 3G networks at the moment?

Baroness Wilcox: My Lords, we welcome the Government bringing forward these amendments on premium rate services in response to our debate in Committee. I was rising to speak to my Amendment No. 70, but the noble Lord, Lord Avebury, made my case for me. I take some comfort from the Minister's comments. He has picked up on the area to which the noble Lord, Lord Avebury, referred, and to which I intended to speak. I shall not repeat that again. I shall take the opportunity to say that we support Amendment No. 69A, tabled by my noble friend Lord Lucas. We sympathise with it, and hope that the Government take it seriously.

Lord McIntosh of Haringey: My Lords, I take very seriously the points that have been raised, and I understand the comments of the noble Lord, Lord Lucas, about scratch cards and competitions promoted on radio and television—and the lack of information and identification that leads to the risk of serious exploitation. He will not be surprised if I say that his amendment would penalise many more reputable people, rather than providing a remedy for the matter that he describes. Nevertheless, he makes important points on enforcement—because that is the issue—and they deserve attention.

The noble Lord, Lord Avebury, said that the noble Lord, Lord Lucas, should send his comments to ICSTIS. He does not need to—I shall. I shall also draw the attention of ICSTIS to the debate. In fairness to ICSTIS,

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some of the points that he has made are for the criminal law. They go beyond the scope of the powers of ICSTIS. Even for an independent regulator such as ICSTIS—perhaps especially for an independent regulator—it would be difficult to deal with some of the abuses without going to law.

I agree with the noble Lord, Lord Avebury, about the fact that there are other services than video conferencing which would benefit from the prior approval regime that I have described. I agree with him that 3G is likely to be among those. I assure him that ISCTIS would deal with them by prior approval, in the same way as they would for video conferencing. He asked me about the date of approval of the code. Oftel is consulting on the conditions that might be set under Clause 117. That consultation is likely to be very brief before the code is approved, because we have been over this ground. There will be no unnecessary delay in approving the code. I agree with him and the noble Baroness, Lady Wilcox, in supporting the principles behind the amendment of the noble Lord, Lord Lucas. However, there is general agreement that these amendments and Amendment No. 70 ought not to be added to the Government amendments, the welcome for which I am grateful for.

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