Mobile-paid Service Complaints Fall by 62%

PhonepayPlus, the phone-paid services regulator, has revealed a 62% drop in complaints about mobile phone-paid services in the 15 months between July 2008 (1,981 complaints) and October 2009 (746).
The news coincides with the publication by the EU of an update on the success of its 2008 Europe-wide clampdown on misleading websites offering mobile phone services, such as ringtones and wallpapers. The EU revealed yesterday that out of a total of 301 websites investigated by national enforcement authorities for serious breaches of EU consumer law, 70% of the 301 cases investigated, have now been resolved, with 52% (159 websites) corrected and 17% (54 websites) closed.
The issues raised by the EU included unclear pricing information; lack of contact information; hidden terms and conditions; and the word free being used to mislead consumers into long-term contracts. Of the 43 UK websites checked, 39 were found to need further investigation, and five were potential cross-border cases, i.e. when the business, consumer and enforcement agency are not all based in the UK.
Working with the Office of Fair Trading, the statutory UK cross-border authority, PhonepayPlus examined the UK websites highlighted in the sweep. Many of the websites that appeared suspect transpired to be for services that were no longer in operation and hadnt been updated in line with the current regulations. The remaining sites were dealt with through PhonepayPlus enforcement powers, including informal action with providers and formal PhonepayPlus adjudications; a few investigations are also still ongoing.
In addition, PhonepayPlus introduced new rules for mobile phone-paid services in January 2009. These measures aim to protect the public from a range of practices in the mobile premium content market which were causing complaints and undermining consumers' trust. The new rules include:

  • Active confirmation: any consumer joining a subscription service which costs more than 4.50 per week must first receive a free confirmation text message detailing the cost and conditions of the service. The consumer cannot be charged until they have confirmed their subscription by replying to that text.
  • Price transparency: price information must be clearly displayed as prominently as any other aspect of the promotion. Promotional material must not suggest any premium rate product or download is free'.
  • STOP: providers offering subscription services or sending promotional text messages must enable consumers to easily opt out of the service via the STOP' command. Any failure of this command immediately results in the service being immediately shut down while PhonepayPlus investigates.

PhonepayPlus says it is confident that its strategic policy work, backed up by its enforcement powers, will continue to cut down on bad practice in this area.
Suhail Bhat, Policy and Initiatives Director at the Mobile Entertainment Forum (MEF), says the PhonepayPlus figures show that when regulators and the mobile industry work together, services can operate in a compliant manner to the benefit of all. 
This is mirrored by the Consumers and Convergence study recently undertaken by KPMG in association with MEF, which showed that consumer satisfaction with mobile music services had grown globally from 26% in 2007 to 66% in 2009, says Bhat. We would welcome discussion with the EU on the regulation of mobile services. The mobile entertainment industry is valued at $32 billion (19 billion) globally, but the regulations for the same content vary tremendously and are applied inconsistently in different Member States. In many cases, there are multiple regulators with remits over both the advertising and content of services. As convergence becomes a reality, more discussion is needed to ensure consumers continue to enjoy mobile content services.