The cost of calling 118 directory enquiry services will be capped at £3.65 for each 90 seconds after concerns were raised about steep price rises.

At the moment charges can be far higher – with market leader 118 118 charging £11.23 for a 90-second call, while other charge close to £20.

The problem is made worse because people generally call the number they remember first, and don’t shop around before dialing.

"Directory enquiry prices have risen in recent years, and callers are paying much more than they expect," said Jane Rumble, director of consumer policy at telecoms watchdog Ofcom.

"We’re taking action to protect callers by capping 118 prices. This will significantly cut the cost of many calls, and bring them back to 2012 levels."

Still not enough

Ofcom will bring in the price cap from April 1 after some providers were found to be charging almost £20 for an average 90-second call.

"Our evidence shows this is hurting people, with some struggling to pay their bills," Rumble said.

But Martin Lewis, founder of Moneysavingexpert.com , thinks it doesn’t go far enough.

"Here’s my idea. To make it cheaper you just have one regulated service (gaining economies of scale) at a low fixed fee And use a 3 digit number so it’s easy to remember. Say… 192," he added.

"There are firms that charge less than £1 they just don’t do huge ad spend. So it is possible."

Who’s being hit by high costs

Ofcom estimates about 450,000 people a year are paying £2.4 million more than they expect in total – and some are struggling to pay their bills.

More than a million people in the UK – many of them elderly – still use the services, according to Ofcom research.

People aged 65 and over, who are significantly less likely to have internet access, are four times more likely to call 118 numbers than 16 to 34-year-olds.

Ofcom’s research found that 65% of 118 callers did not know how much calls cost and 42% said they had no alternative to a directory enquiry service at that time.

There are also harrowing cases where people have been landed with bills of hundreds of pounds, for being asked to be put through to charities like the Samaritans.

Providers have taken action to prevent vulnerable people being landed with massive bills, but it’s still possible for people calling other numbers.

Ofcom said there are nine directory enquiry services that have a 118 number, with published service charges of £15.98 for the first minute of the call and £7.99 for each subsequent minute.

Richard Neudegg, head of regulation at uSwitch.com, said: "118 operators have been losing customers since their heyday as use of the internet for everyday enquiries has become the norm, and the reaction of some 118 services has been to increase charges for their limited customer base."

Ofcom said the April introduction should give providers time to adjust prices and billing systems.

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