22 January 2009

MEF response to PhonepayPlus consultation

Suhail Bhat, policy and initiatives director at MEF, has outlined his initial thoughts on today's announcement from UK regulator PhonepayPlus: 'New measures for mobile phone-paid service and their marketing':

“MEF welcomes the sentiment of today’s PhonepayPlus (PpP) consultation on mobile phone-paid services. Our members support measures that promote transparency for consumers without hindering their access to and enjoyment of mobile services. It is encouraging that so many consumers are using phone-paid services, nearly 50% according to the PpP consultation document.

Our main concern is that the proposals appear to collectively punish the majority of content providers by creating a layer of red tape without actually addressing a small number of rogue elements that persistently mislead consumers.

We believe that all forms of non-compliance and consumer harm should be dealt with immediately and we would have liked elements of the new rules to allow for consumer complaints to be resolved more quickly. While we are still studying the changes, at this stage we are not convinced that the new regulations achieve anything that wasn’t possible under the previous Code of Practice.

However, we will be studying the consultation further following discussions with our members and working with Denton Wilde Sapte LLP to produce a guide to its implications for MEF members.”
Suhail Bhat, policy and initiatives director, MEF

Initial points:

Concentrating on Subscription Services
  • Prior permission is restricted to services that will cost more than £4.50 per week
  • While we understand why PpP has introduced the prior permission regime, this arbitrary threshold does not add extra protection
  • The harm is not caused by the weekly charge or the joining fee but by a failure to provide sufficiently clear information about the costs and conditions associated with using the service (transparency issue)
  • The requirement for prior permission will not affect the minority of companies that cause consumer harm and they are unlikely to be deterred by this threshold. This is a collective punishment approach for an entire industry where the vast majority of service providers comply with the existing Code requirements.
  • Some companies may simply drop the weekly charge to £4/week to escape the need for Prior permission. This does not help the industry nor does it provide the greater clarity of information sought by PpP

Double Opt-in requirement
  • Only those service providers that need to apply for prior permission need to comply with the double opt-in. This creates an un-level playing field for the industry
  • At £4.50/week you need to have a double opt-in and yet the same service/content charged at £4/week does not need permission and does not to have double opt-in
  • This does not seem to provide for a more transparent and user friendly consumer experience
  • PhonepayPlus recognises that most phone-paid services are spontaneous, low-cost and provide users with instant gratification. Having a double opt-in seemingly undermines these attractions

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