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The number of complaints to premium rate phone regulator PhonepayPlus (PPP) dropped by 52 per cent in the last year, it has said. PPP said it received 11,249 complaints in 2009/10, down from 23,244 the previous year.

PPP, which regulates the premium rate services industry under powers granted by telecoms watchdog Ofcom, has published its annual report and has reported that while complaints about landline premium rate services (PRS) have fallen only slightly, complaints about mobile services have plummeted.

PPP chairman Sir Alistair Graham said that the regulator and the companies involved in PRS should share credit for the drop in customer complaints.

"PRS providers have clearly invested in compliance and heeded the lessons of yesteryear," he said. "New rules we put in place in early 2009 are clearly bearing fruit. These followed a strategic review of the mobile market which set out a proactive and multi-faceted approach to dealing with several significant issues facing consumers."

"The Code Compliance Panel (CCP) has adopted a zero tolerance approach to non-compliance, imposing stiff sanctions on providers and their services when found in breach of the Code. The CCP levied £5.3 million in fines last year – double the amount of the previous year which itself represented a record sum," said Graham.

The overall market in premium rate services declined by 11% because of the recession, said PPP.

PPP chief executive Paul Whiteing said that the regulator has tried to identify problems with some operators before they happen and to educate users, especially the young, to avoid 'bill shock', when very high bills for PRS use arrive.

But Graham said that the industry still had work to do to clean up its reputation.

"If we’re honest, the PRS market still suffers from reputational damage caused by scams that, over the years, have dented the public’s confidence in using premium rate services," he said. "The more we can work together to build and promote compliance, the more consumers will trust the services they see promoted. The more they trust, the more they will use."

Complaints about PRS services in the UK have been falling since a high in July 2008, when a European Commission study found that 80 per cent of websites selling premium rate mobile services were in breach of consumer protection laws.

In January 2008 PPP introduced a new regulatory regime aimed at informing consumers exactly what charges they were taking on when signing up for PRS. These rules demanded that any consumer joining a subscription service costing more than £4.50 per week receive a free confirmation text message detailing the cost and conditions of the service.

Under the new rules, consumers could not be charged until confirming that they accepted those charges.

See: The PPP annual report (36-page / 2.4MB PDF)

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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