PhonepayPlus gets stern on premium raters
Pricey providers need prior approval
Mobile phone content providers who charge more than £4.50 a week for their services must seek the permission of premium rate regulator PhonepayPlus to operate, under new rules which take immediate effect.
PhonepayPlus has published new rules after a consultation on how to reduce the growing number of complaints about premium rate mobile services.
Those services which cost more than £4.50 must be pre-approved by PhonepayPlus and must also do more to alert subscribers to their cost. They will not be allowed to operate unless they provide subscribers with a free text message outlining the service's cost and cannot sign a customer up until that person replies to the cost warning saying they still want to subscribe to the service.
PhonepayPlus said that it had taken action because "some companies have adopted practices which are leading to increased consumer complaints".
"Analysis of consultation responses and of complaints reveals that most consumer harm derives from subscription-based services carrying a charge of more than £4.50 a week," said PhonepayPlus's consultation document on the measures. "Problems are exacerbated when the service includes a joining fee of £3 or more in addition to the subscription charge."
"Effective immediately, providers of all such services must first seek permission from PhonepayPlus," it said.
"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," said a PhonepayPlus statement. "The consumer cannot be charged until they have confirmed their subscription by replying to that text."
The regulator published a set of other new requirements for operators of premium-rate services. They must display pricing information prominently, must provide easy opt-out options for promotional messages, and must not make false claims about chat services.
"There are many innovative, useful and fun services available to consumers via their mobiles," said Paul Whiteing, acting chief executive of PhonepayPlus. "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 document outlining the results of the regulator's consultation on what action to take revealed that most service providers resisted the measures.
"A majority of industry respondents were sceptical of the need for subscription services to seek active consumer confirmation, on the grounds that this could cause consumer confusion and adversely affect sales," it said. "However none were able to provide sufficient evidence that this confusion would arise and thus would prove a disproportionate response to the identified harm."
Copyright © 2008, OUT-LAW.com
OUT-LAW.COM is part of international law firm Pinsent Masons.