Most people would be happy to get a phone call telling them they had won a competition, but it may not turn out to be as lucky as you thought. Nick Morrison looks at one of the fastest-growing frauds in the country.

IT was about the sixth such call I'd received in the past month. I had been pre-selected, the recorded message told me, as a winner, and I would definitely receive one of the following: £1,000 cash, a £5,000 prize award, or the star prize of a limited edition BMW Mini Cooper S.

All I had to do was ring 0905 xxx xxxx, and one of those prizes would be mine. But I had to hurry, as my winning number was only valid for that day. Hesitate, and my prize would be lost.

But in fact I hadn't been lucky. I wouldn't be embarking on a mammoth shopping spree, spending a week in the Caribbean or driving off in a Mini Cooper. In fact, I had been targeted by one of the fastest-growing scams in the country. The only prize I would get would be a hefty addition to my phone bill for calling a premium rate number.

"Every single one of these promotions is seriously misleading, and usually the prizes don't exist," says Rob Dwight, spokesman for the Independent Committee for the Supervision of Telephone Information (Icstis), the watchdog for premium rate phone lines.

"What you would get at most is a bunch of vouchers, with all sorts of terms and conditions attached which are never made clear up front."

It turns out that not only will no prize be heading my way, but that the company responsible for raising my hopes is breaking a whole range of regulations, from privacy and data protection to the use of premium rate lines.

But even though this scam has been brought to the attention of the relevant authorities, many of the perpetrators are getting away with it, and there is still no sign of it stopping. In the meantime, more and more people are falling victim, and making calls which could cost them around £15 a time, with no hope of ever getting anything in return.

Icstis has a code of practice governing premium rate lines, and the company which contacted me was clearly breaking more than one of its provisions.

'IF it is a premium rate number, they have to tell you how much the call costs, who they are and they have to give you non-premium contact details, as well as anything else relevant in deciding whether you make the call," says Mr Dwight. None of these details was forthcoming in any of the calls I received.

If Icstis believes there is a service which is going to cause widespread or serious harm, it can invoke its emergency procedure, pulling the plug on a line without having to go through a lengthy investigation first.

The regulatory body can also prevent any of the money from the line being passed on to the offending company, and can fine those who break its code. Earlier this month, a Bristol company was fined £300,000 for operating five of these services, which had been telling "lucky" customers they had won either a cruise or a car.

But thousands of customers may already have been conned before it is brought to Icstis' attention, and fining the companies involved depends on catching them, and that is rarely straightforward.

As well as breaching the premium rate regulations, these calls also breach regulations concerning data protection and privacy.

The use of automated calling equipment for direct marketing purposes, in other words, using a machine to call someone who has not agreed to be called, contravenes the Privacy and Electronic Communications Regulations 2003, which are enforced by the Information Commissioners Office (ICO), responsible for data protection and privacy legislation.

"We're very concerned at the increased number of complaints we're getting about these calls," says an ICO spokesman. "People shouldn't be getting them unless they have given clear, prior consent for this specific type of communication."

Unfortunately, the ICO's powers to deal with offenders are limited, leaving it unable to either investigate or adequately punish companies which flagrantly break the rules.

'IF they are deliberately breaking the law, then they are not necessarily going to advertise who they are, and if we don't know where the company is then the powers we have are simply not enough to take on a proper investigation," says the ICO spokesman.

The ICO can impose a maximum fine of just £5,000 for a breach of its regulations, but first it has to investigate a complaint and then issue an enforcement notice. Only if this notice is ignored can a company be fined. Not surprisingly, the ICO is still waiting to issue its first fine.

For its part, the ICO is in discussions with the Government over strengthening its investigatory powers. But the fact that most of the companies responsible lie outside the EU means they may be outside the regulator's jurisdiction in any case.

But if the premium rate service providers prove elusive, the next best solution may be to prevent them getting their hands on the numbers in the first place.

The premium rate numbers are bought by network companies, of which there are around 80, with BT being the biggest, and then leased to other companies, which can run them as chat lines or recorded advice lines, which are perfectly legal, or a the more dubious competition lines.

Network companies can be reluctant to tell Icstis who is operating a particular number, and even when they do it sometimes transpires that the number has been leased on to another company, or perhaps even a fourth, creating a web which can be difficult to unravel.

As well as the premium rate service provider itself, regulators could also target the network companies.

"Some of these networks don't carry out proper checks on who they give the numbers to, and some of them have been guilty of turning a blind eye to what is going on," says Mr Dwight. "The only way we will prevent this is to stop it at source and we think these network companies should have a minimum set of responsibilities in terms of who they give their numbers to."

Responsibility for regulating the network companies lies with another agency, Ofcom, which has overall responsibility for the telecommunications industry.

Last week, in response to the growing number of complaints, and to disquiet within the industry, Ofcom published a series of recommendations to improve the regulation of premium rate numbers. Key among these was that the Icstis Code of Practice should be extended to cover network companies, as well as the premium rate service providers themselves.

"These network companies should be required to provide information when Icstis is undertaking an investigation, about who they're doing business with," says an Ofcom spokesman. He says Icstis should also be given the power to fine network companies which do not cooperate.

ALTHOUGH there is no specific recommendation that network providers should be compelled to vet companies which lease premium rate numbers, the spokesman says that will be a knock-on effect of the changes.

"It is likely that the network providers will have to think quite carefully about the companies they decide to do business with," he says.

Icstis will hold a public consultation on the proposed changes to its code of practice next year. Although a tightening of the loophole may be in the pipeline, it still leaves a window for the conmen to continue to strike.

In the meantime, the best protection for customers is to remember that if it sounds too good to be true, then it almost certainly is, says Mr Dwight of Icstis.

"If you have not entered a competition then you haven't won a prize - no-one is going to give you a fabulous prize for nothing," he says. "If you get one of these messages, our advice is do not call the number, get in touch with us to complain, and get in touch with the Info rmation Commissioner to say your privacy has been invaded."

*You can report any suspected premium rate scam to Icstis on 0800 500 512 or www.icstis.org.uk