PhonepayPlus, the premium rate industry regulatory body, has issued details of its next consultation process that, if ratified will see it introduce a simplified Code of Practice for the premium rate industry. Central to the proposed new regime is a Registration Scheme that will shine a light on rogue providers and provide consumers with helpful information on services they may have bought, or are thinking of buying.

Rather than simply revising the current Code of Practice, PhonepayPlus has built a new Code from the ground up, based on the outcomes that consumers expect when they purchase a service, such as transparency, fairness and a simple process when they encounter a problem.
There are two significant changes to the current regulatory regime proposed in the new Code. Firstly, it shifts responsibility for compliance in the PRS (Premium Rate Services) value-chain. This means placing responsibility for consumer outcomes with those who actually operate and promote the service, while emphasising the due diligence and risk assessment duties of other businesses who help deliver the service to consumers.

Secondly, it proposes an industry Registration Scheme that requires all networks and providers involved in PRS to register their companies and services with PhonepayPlus before they can do business in the UK, giving consumers access to more information on services and allowing industry to make better informed decisions on which businesses to partner with.
Critically, the new Code would allow PhonepayPlus to quickly and directly target the relevant PRS provider responsible for causing consumer harm. For example, the new Code could be enforced against the party responsible for the content, promotion or operation of a service where there was a breach of consumer protection rules or against a network or other provider who had failed to do proper due diligence and risk assessment on a service that was harming consumers. PhonepayPlus is now seeking responses to its proposals from both consumers and industry stakeholders. during a 10-week consultation period.

The move has been welcomed by the premium rate industry trade body, The Association for Interactive Media & Entertainment (AIME), and by the Mobile Entertainment Forum (MEF). AIME says the proposed changes support its long-held view that regulatory responsibility should be fairly and proportionately applied down the value chain with more emphasis on merchants’ services at the point of sale, where the services meet the consumer and where customer service, together with investment in quality premium products is key to building trust in premium rate services.

But AIME says that if this approach is to work, there needs to be an industry registration scheme for PRS operators, which will underpin the new Code. It is also calling for a robust system to be put in place for customer enquiries regarding premium rate services. For example, it is essential that the PhonepayPlus Number Checker, which allows consumers to check on services they have used, is effective in providing accurate customer care contact information, which will ensure that service enquiries are dealt with by the Merchant quickly and avoid unnecessary escalation to PP+ as complaints. Finally, says AIME, PhonepayPlus  needs industry support in to achieve a successful regulatory framework, that offers the necessary balance of consumer protection but also encourages innovation, investment and, ultimately, industry growth.

The Mobile Entertainment Forum (MEF) has responded to the news with the announcement of industry briefings and the launch of a global regulatory database, describing the PhonepayPlus consultation as “its most important Code consultation yet.”

The MEF believes that the distribution of regulatory responsibility along the value chain, including content businesses that market directly to consumers, is one of the most significant proposals in the consultation, noting that, to date, PpP has only been able to pursue the aggregator, which typically does not promote or control the content sold to the consumer, rather than targeting companies directly responsible for causing consumer harm.

It adds that the proposed mandatory registration scheme for all parties in the premium rate value chain. has clear advantages, since it means that PhonepayPlus will link its adjudications to businesses and their directors, so that companies can carry out due diligence on their partners and, as a result, rogue providers should find it very hard to operate in the UK premium rate industry.

“We welcome the fresh approach taken by PhonepayPlus, with a focus on future-proofing and a recognition that the mobile industry is constantly evolving,” says Suhail Bhat, MEF’s Policy & Initiatives Director. “However, there remain unanswered questions, such as the definition of a premium rate service. In a world where content and services can be accessed and purchased on multiple devices, convergence is an increasingly disruptive force on legal definitions. We will be seeking clarity on the criteria determining which services will fall under the remit of PhnepayPlus and its Code.” 
The consultation closes on 8 July, and MEF is hosting two events to gain maximum industry input and feedback for the regulators. On 6 May, it will hold a webinar on the proposed registration scheme, while on 19 May, it is running a live workshop on the PhonepayPlus Code consultation, hosted by Denton Wilde Sapte.

There’s more information on the webinar here. And on the workshop here.
You can read the PhonepayPlus consultation document here.