In our previous eZine in January 2014, we reported on ComReg’s proposed amendments to the current PRS Code of Practice 2012. ComReg has now published its response to consultation and decision (the Decision).
The Decision confirms the proposed changes to section 4.8 (price transparency), and section 5.20 (regulatory reminder message) addressed in our previous eZine but with some minor additions to reflect further industry comments:
Section 4.8 – price transparency
- Following submissions from eircom, additional wording has been inserted to clarify that the price transparency information relates to messages received or sent.
Section 5.20 – regulatory reminder message
- Certain PRS providers raised concerns about technically being able to ensure that the regulatory reminder is actually received before the user spends a total of €20. This has been addressed by weakening the proposed text so that PRS providers must ensure that the reminder is sent such that it is likely to be received by an end user before the user spends €20.
- There was also some concern that PRS providers could game the system such that the timing of the reminder may straddle the next period’s charges. ComReg provides the following example where the regulatory update message is sent after €20 in circumstances where the PRS costs €8 per week. In this case, if the user unsubscribed after receiving the regulatory message he/she would have paid for 2½ weeks services and may not have received anything for the extra €4 for which he/she has incurred a charge (ie, 2 x €8/week + €4). Accordingly, the text of section 5.20 has been clarified that the reminder should be sentonly after the full charges for that charge period have been imposed.
The new provisions of the Code are set out in full at Annex 1 of the Decision. Those active in the PRS sector have until the updated Code comes into effect on 3 June to get their house in order.
No change to the “double opt-in” requirement
ComReg has also confirmed that it will maintain its current approach for subscription PRS and will not drop or relax the “double opt-in” requirement. Certain operators had argued that the current “double opt-in” requirement should be removed for transactions below a certain value threshold as is the case in the UK for transactions below £4.50 (approximately €5.40). ComReg has noted however, that in terms of complaints, more than 50% of its formal investigations related to PRS that did not appear to have a “double opt-in” mechanism in place. As such it is not surprising that ComReg is reluctant to provide for any softening of the “double opt-in” requirement.
DCB – should it be exempted?
The rapid pace at which technology develops must surely be the regulator’s foe. The PRS sector is no exception with ComReg noting the regulatory challenges in this area posed by certain technological developments such as direct carrier billing (DCB) which can now be used to pay for mobile apps and game credits as well as “off-handset” purchases (eg, parking fees). DCB is where the PRS is charged to a consumer’s mobile phone accounts without a PRS shortcode being used.
Although ComReg rejected arguments made by Vodafone Ireland that the “double opt-in” requirement should not apply to DCB, ComReg has left the door open for a different approach in the future. Part of Vodafone’s argument was that to date complaints relating to DCB services have been limited. In response to this, ComReg considers that as DCB services are a relatively new development in the PRS industry it remains to be seen what level of consumer complaints may be generated when this technology becomes more prevalent. Accordingly, ComReg believes there is no fundamental basis for exempting DCB from the provisions of the updated Code at this time. In fact ComReg has noted that a different approach could lead to discriminatory treatment between PRS services provided using DCB and PRS services provided by other means.
In an apparent effort to allay fears of undue regulatory burden caused by the inclusion of DCB services within the updated Code, ComReg has reiterated that section 3.3 of the Code allows PRS providers to demonstrate to ComReg that they can meet a requirement under the Code by alternative means.
Further reviews / consultations in the pipeline
A number of additional items arose out of the industry responses to ComReg’s consultation on the amendments to the Code. As these were not covered by the scope of ComReg’s additional consultation, this means that before making any changes to address these items, ComReg will need to carry out another round of consultation.
Matters identified for further research and/or consultation include:
- whether following comments from eircom, there should be a requirement that the shortcode is included with the pricing information in all promotions for PRS as part of the price transparency measures in section 4.8; and
- further research on consumer attitudes to charitable donations and whether as a result of these, charitable donations might be exempted from the updated Code.
Publication of the updated Code comes at an opportune time with ComReg recently having been granted increased enforcement powers regarding the protection of consumer rights. It will be interesting to see whether the updated Code and ComReg’s new consumer enforcement powers will lead to noticeable improvements for users of PRS services.