Closure threat for rogue mobile phone companies

Companies that sell mobile phone services such as ringtones will be shut down if consumers cannot easily stop subscription services, the industry regulator has warned.

Following a huge rise in complaints, Phonepayplus, the premium rate regulator, said it would take immediate action against any company that flouts its Code of Practice (CoP); in particular the ‘STOP’ command to end reversed-billed text services.

With customer complaints in the past year more than doubling to over 8,000, Phonepayplus chairman Alistair Graham said: “Any failure will mean we will use our emergency powers. We've got an immediate problem in the mobile sector and we want to get to grips with it."

Phonepayplus is also reviewing the effectiveness of the CoP and has proposed new rules to protect consumers. During an eight-week consultation it will look at these proposals, which cover three areas of concern.

The first is the rise in complaints related to subscription services such as ringtones, songs and other mobile personalisation products. In particular, it is concerned about complaints from consumers who claim to have been signed up to subscription services with neither their knowledge nor consent. It is also unhappy that some services are mis-using the word ‘free' or other similar words.

The regulator will also look at promotional text messages advertising premium rate products and services that are sent to consumers. It said there is a problem with consumers receiving promotional messages – and sometimes charged for them – with no recollection of having asked them to be sent. Phonepayplus said it is not made clear how users can opt-out of receiving messages in the future.

It also wants to look at making pricing and subscription costs clearer for consumers. Many consumers have no idea, or a misperception, of the true cost, often due to misleading promotions.

The closing date for responses to the Phonepayplus consultation is 11 September.