The Phone-paid Services Authority, the organisation which regulates premium rate services, and Ofcom have announced today that regulatory responsibility will transfer to Ofcom in late 2023, subject to further DCMS approval. From that point, the PSA would cease to operate as an independent body.
This proposed transfer of regulatory responsibilities has been approved by the Ofcom board.
For full details of the story please visit the PSA website: The Future of Phonepaid services
5th August 2021: Research of 1,000 consumers, commissioned by aimm in June 2021, observed that 93% described the process of signing up to a subscription to be clear and transparent. Just 1.5% of consumers found themselves subscribed to a service that they didn’t want. Unsurprisingly then, 90% of consumers felt that they alone should be responsible for choosing when to end their subscription, and 78% don’t want to sign up for a fixed term.
The research found that when it comes to digital subscriptions, regulation should guide consumer behaviour, but not be an imposition.
The current regulations already require robust consent, so any new regulations that impose stricter criteria will automatically discriminate against subscribers who are passively happy. The natural suspicion of consumers to click on links to renew a subscription means that services, including charity fundraising, will suffer, should this become a requirement.
The recommendation from the research, which asked about consumers’ preferences regarding reminder messages and length of subscriptions, is that for monthly subscription services a reminder message should be sent every month for the first 3 months, then once a quarter following that, with an additional service summary sent annually.
Joanna Cox, General Manager at aimm said “We wanted to ask consumers what they wanted when it came to digital subscriptions. The results of the research overwhelming show that the current regulations provide enough security for consumers and if anything they’d like to be contacted even less than they currently are.”
Over 97% of consumers felt that an annual service summary, that was for information only and did not need to be acted on, would be beneficial. Consumers now think of digital subscriptions as long term and not in 12-monthly timeframes. This is backed up by the fact that 75% have subscribed to a service or donation for over a year.
“We want to make sure that consumers are protected and feel safe using mobile subscriptions to sign up to services or donate to charity,” said Neil Johnson, Chairman at aimm. “However, we also want to make sure that we don’t create regulations that are too stringent, that actively dissuade consumers from signing up to quality subscription services, or mean that they are inadvertently cancelled. Too much unnecessary regulation risks damaging the consumer experience and the subscription business model; a model which creates a convenient way for users to pay for services they enjoy.”
Details about the research
Research was commissioned via Mobile Squared during June 2021. This research asked a panel of 1,000 unbiased people about their experiences, with the expectation that this would provide a meaningful insight into the world of those with a passive happiness with the service they receive. The panel was evenly split by age group, gender and location, to ensure a fair cross-representation of society.
Whilst recognising there have been challenges with phone-paid subscriptions in the past, these have now largely been resolved. This research addressed the experiences of those with a passive happiness with their subscription; the silent majority of people now using phone-paid subscriptions without concern.
At the beginning of March an invite was sent out to Industry for a survey to give feedback on how PSA are doing as a Regulator.
This is your last chance to have your say and give your views. The feedback received will be used as a benchmark for their performance to ensure the needs of the stakeholders are met.
As a result of the Emergency Procedures that PhonepayPlus deployed in 2013 and prior to the instigation of this legal challenge, AIME Executive and Board worked extensively with PhonepayPlus to develop guidance for the premium rate industry that utilise digital marketing, particularly with affiliates.
AIME also collaboratively developed an early warning system for reporting instances of mobile malware, misleading affiliate practices and other tactics that would damage advertisers and create risk for consumers. This enabled responsible advertisers to investigate and deal with affiliate and other digital marketing fraud aimed at themselves, but affecting consumers in process. This tool is being actively used by industry.
The area of affiliate marketing as a promotion tool for connecting with mobile consumers exploded in 2012/13 and the risks to advertisers from affiliates who set out to mislead consumers or create malware was little understood by all parties. AIMEs role in assembling industry collaboration has resulted in a marked reduction in rogue affiliate issues affecting premium rate service marketing and we continue to monitor and react to the issue.
AIME also engaged extensively with senior representatives of PhonepayPlus to encourage and support a review of their enforcement procedures, the skill and independence of the code compliance panel and the robustness of adjudication case preparation in light of new technology and new ways for consumers to utilise premium rate services via the burgeoning growth in smartphones.
PhonepayPlus has demonstrated willingness to engage with industry on these matters while still prioritising its consumer protection remit and remaining independent.
AIMEs Chairman Edward Boddington said “It is vital for the premium rate industry that we have an effective regulator to ensure a stable operating environment for the companies that wish to provide consumers with great products, transparent pricing and honest marketing and the regulator should keep at bay the miscreants who are determined to wreck the industry and remove consumer confidence. AIMEs objective for its members is to ensure that PhonepayPlus has robust mechanisms to remove harmful products while applying efficient and precise procedures that will survive any legal challenge. Maintaining that balance is a tough role to play and AIME has encouraged and will continue to support PhonepayPlus.
This legal case reached conclusion today and news is starting to spread about the outcome of the case. AIME is currently analysing the potential impact of the case on PhonepayPlus and its procedures and will report directly to AIME Members.
A summary of the Judicial Review outcome is available here:
PhonepayPlus have also released a press statement after today’s results here: http://www.phonepayplus.org.uk/News-And-Events/News/2015/1/Ruling-on-Ordanduu-GmbH-and-Optimus-Mobile-GmbH-v-PhonepayPlus.aspx
Telemedia News commentary on the outcome can be found here: http://www.telemedia-news.com/newsitem.aspx?id=5093
