Txt “STOP” to Mobile Premium Services – ACMA finally registers the Mobile Premium Services Industry Code

No doubt you are aware of those pesky ads on TV asking you to text “FLIRT” if you want to discover how much of a flirter your partner is, text for that too-catchy too-cute ringtone, or even claiming to be able to tell you whether your lover is “the one”.  These, along with psychic and horoscope lines, voting lines for TV shows or competitions, dating and chat services, ringtone services, sports updates and even exam result hotlines, all fall under the banner of Mobile Premium Services (MPS).  MPS are broad, consisting of any content or services that you access via your mobile phone, and generally begin with the numbers ‘19’.

The main problem with MPS is that the services cost significantly more than a standard SMS or mobile call.  The MPS industry is also notorious for unscrupulous practices, with countless stories of providers locking users into hidden subscriptions by offering seemingly “free” ringtones, billing for unsolicited and often unwanted services, and offering no clear way to unsubscribe or to obtain a quick and speedy refund. 

Against this backdrop, Communications Alliance (an industry body comprised of heavyweights in the telecommunications industry including Telstra and Optus as well as various consumer groups) took on the formidable task of reforming the previous Telecommunications Service Provider Determination with a new beefed-up MPS Industry Code (MPSIC). 

Largely, this Code has been a success.  Most notably it has introduced:

  • A ban on all advertisements for premium SMS services targeted at minors under 15 years of age;
  • A double ‘opt-in’ procedure, meaning that two independent confirmations of request must be received by the service provider before a customer is able to be subscribed to a service.  For example, if the consumer requests a SMS service by responding to a promotional message sent to the customer’s mobile phone (eg. SMS advertising offering a “free” ringtone), the supplier must first send a subscription request message requiring customer confirmation before the subscription becomes valid.
  • Far stricter rules on advertising of MPS including clearer, more prominent and more legible information on the price of a service and especially whether a service is a subscription service;
  • An obligation on providers to send a free SMS alert to customers subscribed to services each month in which they have spent more than $30 on a service;
  • Far more transparent complaints handling procedures such as the obligation to establish a free-call or local call helpline to address consumer complaints;
  • Creation of a consumer website providing a host of information about MPS and very helpfully, allows you to search for details about any service provider if you enter the 19 number (handy for chasing up a service provider to complain or obtain a refund).  

On 19 March 2009, Communications Alliance submitted the Code to AMCA for registration.  However, Graeme Samuel of the ACCC and end-user advocacy group Consumers’ Telecommunications Network were scathing in their criticism of the Code.  In particular, the consumer watchdog labelled it “deficient” for not requiring all mobile carriers to introduce the option of allowing consumers to completely bar the making of calls to ‘19’ numbers. 

After several months of uncertainty over the future of the Code, the MPSIC was finally registered by ACMA on 14 May 2009.  Rather than modifying the Code, in order to assuage ACCC and CNU criticisms, ACMA took the surprising step of choosing to register the Code as one part of a “package” of reforms.  The other part of the package will involve ACMA making a service provider determination requiring:

  • mobile carriers to provide all consumers the option of barring premium SMS services by 1 July 2010 (thus satisfying the ACCC)
  • content providers to be registered and to prohibit mobile carriers from contracting with unregistered MPS suppliers – thus stamp out the practice of “rogue operators”.

 ACMA’s new approach to MPS signals a promising step towards stricter rules regulating the MPS industry.  It  provides far greater protection for the community (particularly vulnerable groups eg children) from unscrupulous service providers, and will certainly go a long way towards ensuring that SMS services provide real value to society and are justified in retaining the title of “premium” services.

 

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