The UK regulator responsible for premium rate telephone services, PhonepayPlus has proposed a series of measures to protect the public from harm in the mobile premium content market. With immediate effect, any subscription service that does not allow customers to stop it easily and quickly will be barred from operation.
Additional proposals - which could come into force by the Winter are designed to ensure that consumers receive fewer and more targeted promotional text messages.
PhonepayPlusÃ' Annual Report notes that in 2007/8 the mobile premium content market was worth more than £460million (US$921 million), a significant increase over the year before.
The report says that UK consumers are finding great value in these services. As well as downloading ringtones, pictures and games people are using their mobile phone to participate in television programmes, receive news alerts, find contact details and enter competitions. As mobile devices become ever more powerful, innovative new services continue to appear. Location-based services, for example, could allow providers to offer services based on consumersÃ' geographic whereabouts.
Research carried out for PhonepayPlus has showed that 38% of UK consumers have used a phone-paid service - 18 million people in total. 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. In the first three months of 2008 alone, PhonepayPlus received more than 4,500 complaints. There is also anecdotal evidence of consumers, including young people, being charged several thousand pounds as a result of bad practice by content and service providers.
In 2007 PhonepayPlus adjudged 33 mobile services to be in breach and imposed fines of more than £360,000. In the first six months of 2008, we have already adjudicated on 25 mobile phone-paid services with total fines in excess of £390,000.
Subscription services
There are three areas which are of particular concern. The first is the rise in complaints related to subscription services such as ringtones, songs and other mobile personalisation products. In particular:
PhonepayPlus is proposing the introduction of new rules mandating that once a consumer has selected a subscription service, they must be told the full cost and then actively confirm they wish to subscribe. Also, no use of the word ‘freeÃ' or similar words to be in promotional material and where there is evidence of the failure of the STOP command, PhonepayPlus will look to place an immediate bar on the service while it investigates complaints.
Finally, the lack of clarity and transparency of the pricing of some phone-paid services. Many consumers have no idea, or a misperception, of the true cost, often due to misleading promotions. PhonepayPlus proposes to require that the price of phone-paid services, including mobile internet pages, must be clearly signaled before the user is charged; and that promotional messages must not mislead consumers into thinking that they are engaging with another individual.
"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 PhonepayPlus.
"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."
Posted to the site on 17th July 2008
Posted to: www.cellular-news.com/story/32457.php