Tinkering around the edges but no waiver of double opt-in requirement at this stage
In line with its statutory obligations, ComReg carried out a review of the current PRS Code of Practice (2012) (the “Code”) during the last quarter of 2013. Following its review, ComReg has proposed that the obligations on price transparency (section 4.8) and the requirement to send a €20 spend reminder message (section 5.20) are bolstered; but ComReg stays firm in not waiving double opt-in requirements for ‘low value’ transactions.
It might seem surprising, but according to ComReg’s research, a large proportion of consumers are still unclear about whether they have in fact signed up to a PRS subscription service and the true costs of such service. The amendments are therefore designed to ensure greater clarity for consumers by closing some loopholes identified in the current wording of the Code.
Price Transparency (Section 4.8)
Providers will now have to take greater efforts to make the total price of the service clearer. Whereas previously a provider could indicate the price per message and number of messages required to complete the transaction (eg, 5 x €2.50 meaning that the consumer will be invoiced for a sum of €12.50), the provider will now have to calculate the total cost (eg, €12.50) for the consumer, and set this out.
Regulatory Reminder Message (Section 5.20)
In a similar vein, providers will now have to ensure that they send the relevant regulatory reminder message notifying the consumer that he/she is able to unsubscribe immediately from the service, when the consumer is about to approach/exceed the €20 spend. Currently, some providers have been able to game the system by setting charges at such intervals that do not readily divide into €20 eg, €8 charge per message, so that the customer is only notified of his/her ability to unsubscribe after the third message when he/she has already incurred total charges of €24. The new rules would mean that the provider would have to notify the consumer after the second message, ie, after each €16 interval and before he/she reaches the €20 spend.
Controversially, ComReg has decided not to follow examples in other jurisdictions by dropping or relaxing the “double opt-in” requirement for transactions below a certain value threshold, even for print offers where customers tend to have an opportunity to review terms and conditions before signing up. For example, in the UK the double opt-in requirement applies to PRS subscriptions above £4.50 (approximately €5.40).
In defending its position, ComReg has noted the difficulty in choosing an appropriate price point – PRS subscriptions with relatively low individual amounts can still impact certain consumers – and the negative effects of adopting a ‘split’ or inconsistent regulatory approach for print as against other forms of offers (eg, tv, radio, web etc). In fact, ComReg believes that the double opt-in requirement benefits providers by enabling them to more easily demonstrate informed consent to subscribe to the service.
However, ComReg has left the possibility open of amending the double opt-in requirement at some later stage. In the meantime, ComReg has shown itself willing to accept suitable third party PIN verification systems in place of provider evidenced double opt-in. Providers not already doing this might want to take stock and see if this would be of benefit.
However, given the concerns raised and ComReg’s indication that it might in fact be necessary to amend the Code and extend it to one-off PRS as well, it is unlikely the double opt-in requirement will be relaxed more widely any time soon - those currently outside the Code may need to start looking over their shoulder.