FAQs on the new Code of Practice and the Registration Scheme


The Code:

 

Registration:

 

The Code:

What is the Code of Practice?

The Code of Practice is used by PhonepayPlus to regulate premium rate services (PRS). This means anything beyond standard-rate phone calls or text messages that are charged to consumers’ communications bills or deducted from pre-paid mobile credit. There are a broad range of services that use PRS as a payment mechanism, including TV voting, chatlines, gambling services and charity donations by text message. The Code of Practice sets out rules for providers of premium rate services, including pricing, advertising and promotions, with the aim that compliance with the Code will mean consumers can use PRS with confidence.

The current, 11th version of the Code was published in 2006. There have been important changes since then, both in technology and in how people use their phones. The new Code of Practice, due to be launched and take effect next year, is meant to take those changes into account, and to be more flexible so that it can adapt to further changes in the future.

If you operate in the PRS market, the two most important changes to current regulation that you need to be aware of are as follows:

  • The new Code of Practice will extend responsibility for compliance along the whole PRS value-chain. This means it will place responsibility for consumer outcomes with those responsible for the content and those actually operating and promoting the service. Other parties involved in the value-chain to the consumer will be responsible for due diligence and risk assessment and control on their business partners; and
  • A mandatory industry Registration Scheme will be introduced that will require all Network operators and providers involved in PRS to register their companies and services with PhonepayPlus before they can do business in the UK. This will give consumers access to more information on services and allow industry to make better-informed decisions on which businesses to partner with. PhonepayPlus is currently considering possible exemptions to the requirement to register, including the 087 number range. A decision will be made in early 2011.

Who does it apply to?

Anyone involved in providing premium rate services. In practice, this is most likely to mean terminating Network operators, providers who have an interconnect with a Network operator or who operate a technical platform which facilitates PRS, or those who act as merchants, controlling the promotion and sale of content. However, in the event of consumer harm occurring, we will look at each party’s role in providing a service, and in causing the consumer harm, so that responsibility can be appropriately apportioned and the right party (or parties) investigated.

What are the penalties for breaching the Code?

The Code provides PhonepayPlus’ independent Tribunal – which adjudicates on any alleged breaches of the Code – with a range of sanctions. Obviously, the sanctions will be less or more serious depending on the nature and seriousness of the harm and/or detriment caused to consumers, but the most serious harm can attract a fine of £250,000 for each breach upheld. Furthermore, PhonepayPlus has the power to block certain service types, or even providers and individuals, from operating PRS for periods of up to two years. So, it is important that providers comply with the Code.

It is important to note though that, where providers have unwittingly caused consumer harm and acted responsibly in redressing any issues, or where the consumer harm is not significant, PhonepayPlus will look to resolve matters informally with the provider(s) concerned.

Where do I go if I need more information?

Copies of the new draft Code and suite of supporting Guidance can be found on the PhonepayPlus website. Enquiries can be directed in the first instance to the Compliance Team – compliance@phonepayplus.org.uk – or call them on 0845 026 1060*.

*Calls provided by BT will be charged at up to 2p per minute, with an 11p set-up charge. Mobile and other providers' charges may vary and are likely to cost more.

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Registration:

Who needs to register?

Anyone involved in providing premium rate services to consumers as part of a value-chain. In practice, this is most likely to mean terminating Network operators, providers who have an interconnect with a Network operator or who operate a technical platform which facilitates PRS, or those who act as merchants, controlling the promotion and sale of content. It is very unlikely to mean companies who have been subcontracted to solely provide content (i.e. they do not sell it themselves), affiliate marketing or some kind of technical service beyond the platform to provide PRS.

PhonepayPlus is currently considering possible exemptions to the requirement to register, including the 087 number range. A decision will be made in early 2011.

Anyone who isn’t sure whether they should register should contact the Compliance Team at PhonepayPlus for further advice.

What do I need to register?

Any Network operator, organisation or provider involved in delivering a PRS to consumers will need to register their details, including information about their business and their Directors. Another party can pre-register on your behalf, but you will still have to confirm the details are correct and pay the registration fee for it to take effect.

We will also require that individual services are registered with us by the party responsible for customer service. This information will feed the Number Checker service that allows consumers to get in touch with the relevant providers for each PRS, so it is important this is accurate and kept up-to-date. Again, another party can pre-register services, but the customer care provider must confirm details are correct and keep them updated. There is no charge for registering services, but they must be linked to a registered organisation or provider.

We recognise that initially this may be a major resource issue for providers with a large number of clients, or those who have a large number of services. PhonepayPlus is aiming to provide an initial bulk upload service, which will then only require validation (and payment of the fee in the case of company registration) by the appropriate provider to take effect.

How do I register?

Registration will be through PhonepayPlus’ website, and should be a simple process. The Registration Scheme is still in development and further details on how the registration process will work will be released in early 2011.

When can I register?

The facility to register is still being built. It is due to be launched in the second quarter of 2011, although it will not be a regulatory requirement to register until later in the year when the new Code of Practice comes into force. These dates will be confirmed when the Code is published, currently expected to be in March 2011.

What does it mean to register – will I have to abide by any further rules once registered?

Yes, you will need to abide by the PhonepayPlus Code of Practice. The Code requires those involved in running PRS to:

  • Achieve positive consumer outcomes if you are responsible for the content, operation and promotion of services;
  • Perform due diligence, and an appropriate degree of risk assessment and control, on other registered parties with whom you contract.

The new draft Code and suite of supporting Guidance, can be viewed on the PhonepayPlus website.

How much will registration cost me?

There will be a charge for registration, but this is intended only to only cover the costs of creating and maintaining the database. The fee has not been finally determined yet, but our expectation is that it will initially be set at around £100 + VAT per registering Network operator or provider.

While there will be a charge for registering your company, there won’t be any charge for registering your services, however many you have.

Where do I go if I need more information?

Enquiries can be directed in the first instance to the Compliance Team – compliance@phonepayplus.org.uk – or call them on 0845 026 1060*.

*Calls provided by BT will be charged at up to 2p per minute, with an 11p set-up charge. Mobile and other providers' charges may vary and are likely to cost more.

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