But a group representing the industry has raised questions about
whether the PPP's measures are too specific, despite a marked rise
in complaints about operator behaviour, and has said that it is
working on a new model of premium-rate regulation.
PhonepayPlus (PPP) regulates the premium rate phone industry and
has said that though use of premium rate services is increasing,
dishonest practice still flourishes and consumer trust in them is
still low. The regulator fined mobile operators more in the first
three months of 2008 than in the whole of 2007, it said.
PPP identified three areas where malpractice was particularly
pronounced. Users are being signed up to subscriptions without
their consent and not being allowed to unsubscribe; they are being
bombarded with unasked-for and expensive promotional text messages;
and they are finding accurate pricing information hard to find or
entirely absent.
The PPP will now ban the use of the word 'free' "or similar
words" anywhere in the promotion of premium rate phone services. It
has also said that it will cut off any service which fails to
respect a consumer's instruction to stop the service. This is done
by texting 'STOP' to the operator.
“There is a clear lack of trust among many consumers about
mobile premium services and this is small wonder when you consider
the kind of harm that is being done to them by some providers,”
said George Kidd, chief executive of PPP. “It's essential that we
address this. Only by working together to build trust among
consumers will we see a growing, sustainable, vibrant market for
phone-paid services.”
The Association for Interactive Media and Entertainment (AIME),
which represents the premium-rate industry said that it would back
the proposals.
"AIME will support the proposals and will be responding to PPP’s
consultation to ensure the detail is both practical and
proportionate, facilitating the growth of the industry and
providing consumer protection," Sally Weatherall, chairwoman of
AIME told OUT-LAW. "Trends across Europe seem to indicate a growth
in consumer complaints related to premium rate mobile services.
Such trends support the overall findings of PPP …[and] need to be
addressed in an appropriate and proportionate manner."
Weatherall, though, said that most of the proposed measures
already exist in PPP rules, and that the body may be becoming too
specific in its regulation.
"On the face of it additional measures should be unnecessary. It
should be more a case of effective enforcement," she said. "Are
they necessary? If existing rules are being flouted then clearly
there is a necessity to be more express. There is a legitimate
question as to whether the PPP need to be, or indeed should be so
prescriptive."
The regulator said in its annual report that it had noticed a
significant movement in the past year of users of premium rate
services from landline phones to mobiles. It said that £460 million
was spent in the past year on mobile content.
"Research carried out for PhonepayPlus has showed that 38% of UK
consumers have used a phone-paid service – 18 million people in
total," said a PPP statement. "The percentage of children (16 and
under) regularly using phone-paid services on their mobile phone
varied significantly: as many as 32% of children from low-income
households compared to 18% for children in more affluent
homes."
"However, an extraordinary increase in complaints has
accompanied this growth. PhonepayPlus received more than 8,000
mobile-related complaints in 2007/8, an 108% increase on the
previous year," the regulator said.
The PPP has proposed that it be given the right to demand proof
of a user's opt-in to a subscription service and said that it would
work with the Information Commissioner's Office on operators' data
protection compliance.
AIME's Weatherall said that it is difficult to target rogue
content providers when PPP only regulates the service providers,
which means the companies providing the technical infrastructure to
allow services to be run.
"The network operators could ban the services but do not have
the contractual links across the market to facilitate this easily.
PPP have only a limited reach to the content providers and again
this does not prevent the services simply migrating to other
providers," she said.
"Clearly regulation needs to bite at the point of consumption,
i.e. at the point where the consumer interacts with the content
provider. Currently this is not the case. AIME and PPP and other
industry participants are working to develop models of regulation
that will enable the industry to ban the services of rogue content
promoters and prevent them simply finding a route to market through
alternative suppliers. These may include content provider
registration schemes coupled with cross industry service bans."
PPP's consultation opened today and closes on 11th September
2008.
