Following a full examination of services which make recurring charges to a consumer’s phone bill in exchange for digital content – such as games, music streaming or videos – the Phone-paid services Authority has introduced tough new rules.
Phone-paid subscriptions are used by millions of consumers engaging with popular services, many operated by leading games publishers and music streaming services.
But 97% of all complaints to the PSA in 2018/19 have been about the confusion caused to consumers by being charged without their consent, or not understanding the signup process, and sometimes not being aware that they have signed up to these services.
Following a full consultation, the new requirements will raise standards in the market to meet consumer expectations. There are three major changes which all providers of services will have to comply with or they will be in breach of the Code of Practice and potentially subject to sanctions which may include significant financial penalties:
A two-stage sign-up process will be required where the first stage requires an opt-in using either a PIN, account and password or Mobile Originating SMS. This must be followed by a second opt-in confirmation stage.
Greater clarity in ensuring that consumers are aware they are in a payment environment and signing up to a phone-paid subscription.
A receipt must be issued after every charge.
Many services meet the new requirements. But the new rules bring clarity to the industry and are designed to remove confusion, accidental sign up, and to prevent deliberate deception. This consistency is in line with good practice in other online payment processes.