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.
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