Phonepayplus issues new premium rate rules

Regulator responds to increased customer complaints about subscription services

Dinah Greek, Computeractive 22 Jan 2009

Increased consumer complaints have led Phonepayplus to issue new rules on premium rate subscription services.

The premium rate regulator said that while most companies operate without causing concern, others have adopted practices that are detrimental to consumers.

Anecdotal evidence given to the organisation found that consumers, including young people, were in some cases being charged several thousand pounds as a result of bad practice by content and service providers.

From now on Phonepayplus said that providers must apply to it for permission to operate if they sell mobile subscription services costing more than £4.50 in any given week or if they are applying pay-per-page charges on the mobile internet.

In addition, the provider must get active confirmation from the subscriber before charging for a service. In order to get prior permission, the consumer must receive a free confirmation text message detailing the cost and conditions of the service. Until the consumer has confirmed their subscription by replying to that text no charges can be made.

Consumers must also not be misled. For example, any 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.

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."

Phonepayplus has also issued a 'statement of expectation' that summarises the changes and actions needed for operators to remain compliant.

The regulator also reiterated that price information must be clearly displayed and that any 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.

Lastly, it said failure to implement the STOP command, which allows consumers to opt out of a service, must be complied with. Failure to do so will result in the service being shut down immediately while Phonepayplus investigates any complaint.

Companies that sell or trade third-party marketing lists must also be able to prove evidence on request to Phonepayplus that recipients have agreed to receive promotional text messages for particular types of services.

Phonepayplus said it expects the guidelines to result in fewer complaints and greater confidence in the market.

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