PhonepayPlus has issued a statement on mobile phone-paid services and their marketing setting out new measures to protect the public from a range of practices in the mobile premium content market which are said to be causing complaints and undermining consumers' trust.
Having taken into account stakeholder feedback, PhonepayPlus says it is implementing the following rules:
– Prior permission: providers offering mobile subscription services charging over £4.50 in any given week or applying pay-per-page charges on the mobile internet must first apply for permission from PhonepayPlus;
– Active confirmation: as part of the prior permission undertaking, any consumer joining a subscription service must first receive a free confirmation text message detailing the cost and conditions of the service. The consumer cannot be charged until they have confirmed their subscription by replying to that text.
Hundreds of thousands of consumers use premium mobile services daily. These include downloading ringtones, pictures and games, as well as participating in television programmes, receiving news alerts, finding contact details and entering competitions.
Most of these services operate with no problem but some companies have adopted practices which are leading to increased consumer complaints.
PhonepayPlus' review of the premium mobile sector was prompted by a worrying 108% increase in mobile-related complaints received from 2006/7 to 2007/8. This was accompanied by anecdotal evidence of consumers, including young people, being charged several thousand pounds in some cases as a result of bad practice by content and service providers.
Impact
PhonepayPlus has issued a Statement of Expectation alongside the final statement, which summarises the changes and actions service providers may need to take in order to remain compliant.
Also detailed in the statement are rules pertaining to:
– Price transparency: price information must be clearly displayed – as prominent as any other aspect of the promotion. Promotional material must not suggest any premium rate product or download is 'free';
– Promotional text messages: providers sending free promotional messages must inform recipients that the message is free and make clear how to opt out of receiving similar messages in the future;
– STOP: providers offering subscription services or sending promotional text messages must enable consumers to easily opt out of the service via the 'STOP' command. Any failure of this command already results in the service being immediately shut down while PhonepayPlus investigates;
– Marketing lists: companies that sell or otherwise trade third party marketing lists must provide evidence upon request by PhonepayPlus that recipients have agreed to receive promotional text messages for particular types of services;
– Chat: text-based chat services must not imply that users are exchanging messages with other individuals, or that customers will be able to meet people by using the service, unless this is the case.
Commenting on the new regulations Paul Whiteing, Acting CEO of PhonepayPlus, said: "There are many innovative, useful and fun services available to consumers via their mobiles. These new measures are targeted at a small number of providers who do not offer services to customers in a fair and straightforward way. Consumers should not need to work hard to understand the full price of any service.
"The guidelines are the result of intensive research in to the mobile market, and PhonepayPlus expects them to result in fewer complaints and greater confidence in the market."
* In response to the PhonepayPlus statement, MEF has issued the following response:
"MEF welcomes the sentiment of today's PhonepayPlus (PpP) consultation on mobile phone-paid services. Our members support measures that promote transparency for consumers without hindering their access to and enjoyment of mobile services. It is encouraging that so many consumers are using phone-paid services, nearly 50% according to the PpP consultation document.
Our main concern is that the proposals appear to collectively punish the majority of content providers by creating a layer of red tape, without actually addressing a small number of rogue elements that persistently mislead consumers.
We believe that all forms of non-compliance and consumer harm should be dealt with immediately and we would have liked elements of the new rules to allow for consumer complaints to be resolved more quickly. While we are still studying the changes, at this stage we are not convinced that the new regulations achieve anything that wasn't possible under the previous Code of Practice.
However, we will be studying the consultation further following discussions with our members and working with Denton Wilde Sapte LLP to produce a guide to its implications for MEF members."
Suhail Bhat, policy and initiatives director, MEF