News

Watchdog fines £100,000 for online 'squatting' that misled consumers

Thu, 16 Feb 2012 00:01:00 Z

In two separate cases, competitions were promoted on sites that ‘squat’ on addresses very close to popular, well-known websites such as Twitter, YouTube and Wikipedia. Competitions for iPads and Mac Books were promoted on websites with addresses such as wikapedia.com and twtter.com. This practice, known as ‘typosquatting’, takes advantage of consumers mistyping when they are searching for popular websites.

In both cases, the landing pages for the ‘squatted’ sites looked like the genuine sites the consumer was searching for – the ‘squatted’ sites used the same logos, colouring and fonts. These ‘squatted’ sites informed consumers that they had won or could claim a prize, such as an iPad. In both cases, consumers were given the impression that to enter or claim they simply had to enter their contact details and answer some questions. In both cases, one screen asked consumers to input their mobile phone number. Consumers then received a PIN number on their mobile phones to use for the website competitions. Consumers also began to receive texts to their mobile phones asking them quiz/survey questions, which they could text back to answer. Consumers were charged £1.50 for each question received on their mobile phones as well as £1.50 to answer each question. One complainant said that his fiancée ‘was tricked into a service on youtube’ and that she was charged £63 in total.

PhonepayPlus' Tribunal found that that the providers had breached the Code of Practice as a result of promotions that had misled consumers and that had not provided clear information about pricing. R&D Media Europe and Unavalley BV were both fined £100,000 and ordered to refund consumers. Both firms are based in Amsterdam.

The watchdog today published clear guidance to premium rate providers about how services should be marketed online and digitally. This guidance reminds PRS providers that they are responsible for all their digital promotions and, if they use marketing firms that mislead consumers through typosquatting, they will be in breach of the Code of Practice. The watchdog also issued a step-by-step guide for consumers about ‘typosquatting’ and what to look out for when they are searching online.

Paul Whiteing, PhonepayPlus’ Chief Executive, said:

“These judgements send a clear message to providers that they cannot play on the public’s trust in well-known websites to promote services. We want consumers to continue to have confidence in the digital market place and we will do everything we can to ensure that they do. Most providers support us in this area as they recognise that this market will only grow if consumers have such trust.”

Notes to editors

2. If you have any questions, please contact the PhonepayPlus Press Office on (020) 7940 7440 / 07912 774 339 / pressoffice@phonepayplus.org.uk

Emergency procedure investigation

Tue, 07 Feb 2012 14:02:00 Z

Some complainants have alleged that they received unsolicited text messages, both chargeable messages and free marketing messages, from the services. Other complainants acknowledged that service content was accessed/viewed on their handset, but stated that the terms and conditions were misleading and that pricing information was not stated or noticed by them.

Switchfire Ltd has been identified as the Level 2 provider responsible for the service operating on the shortcodes. A Tribunal will decide whether the service is in breach of the Code as soon as is reasonably possible after PhonepayPlus has received a response from the Level 2 provider to its Emergency procedure breach notice, which is to be sent to Switchfire Ltd in due course. The service has now been suspended pending conclusion of the investigation and a decision by the Tribunal.

Switchfire Ltd has applied for a review of the decision to use the Emergency procedure which will be considered by a Tribunal in accordance with the PhonepayPlus Code of Practice.

In the meantime, other providers are reminded that enabling this service, or any other services that operate in a similar way, may result in breaches being raised against them.

UK young people hungry to use mobiles for good

Mon, 23 Jan 2012 16:13:00 Z

The competition finalists will be converging on ITV’s London headquarters on 24th January to take part in a mobile giving ‘dragons’ den’, battling it out for awards of up to £1,500 to help turn their socially-minded ideas into reality. The nine groups of young people have been picked from schools and youth clubs nationwide. They will be pitching their ideas to a panel of judges (which includes representatives from companies such as BT, O2 and Three), in the hope of securing funding and ongoing business mentoring courtesy of Live UnLtd, the young social entrepreneurship support organisation.

The competition is part of the PhoneBrain youth education programme (www.phonebrain.org.uk), which was set up by PhonepayPlus (the UK regulator for premium rate telephone services). Now in its third year, PhoneBrain helps young people recognise the services on their phone that might cost them more, but also highlights the opportunities associated with these emerging technologies via the social enterprise competition which is open to 11-19 year olds. For the first time in 2011, the programme has been rolled out to youth clubs throughout the UK via the Clubs for Young People network, in addition to schools in England and Wales.

The enthusiasm shown by this year’s entrants to use their phones for good mirrors a recent report from nfpSynergy supported by the Charities Aid Foundation, which found that over 70% of charities see the potential of mobiles to engage with a younger generation of donors.

Ann Cook, ITV’s Director of Interactive & Managing Director of ITL, said:

“We are so excited to be hosting this event in partnership with PhonepayPlus. At ITV, we have recently seen the value of charitable text donation first-hand with our hugely successful ‘Text Santa’ appeal, which aimed to raise awareness and money for those most vulnerable during the festive period.

“To date, we have raised £4m for six different charities as a result of this programme, and it is really inspiring to see young people also recognising the potential of mobile as a tool to encourage giving. I can’t wait to meet all the finalists on the 24th.”

Many of the ideas are not just about giving money, but rather tackle how people can use their phones to donate and share time, assets, skills, knowledge and support. One of the proposals is for a mobile game linked with real-life charity and volunteering – for example, a young person who spent two hours volunteering in their community would be awarded the next level of the game as a result.

Another idea being showcased on the 24th is ‘e-Tips’, a concept developed by PhoneBrain finalist Siobhan Giles, 13, of Avonbourne School in Bournemouth. Siobhan is hoping to cross the generational tech divide with the service. Siobhan leads an after school club for older ‘Silver Surfers’ who want to engage with digital and mobile technology. e-Tips would allow older people to text any tricky questions they may have outside of the club to young advisors who would step in to offer advice and support via their mobiles.

Siobhan said:

“My idea, e-Tips, is a text service which our club members will be able use if they run into any problems following a session. For example, if they have a specific question about the internet or if something pops up on their phone that they’re unsure about. We’re really keen to support local elderly residents and ensure they do not have to fight digital exclusion alone – e-Tips will help us do that.”

PhonepayPlus’ Chief Executive, Paul Whiteing, commented:

“All of these innovative, socially useful ideas from young people point to charity text donation being the tip of the iceberg of what smartphones and micropayments, such as premium rate, can offer to volunteers, community groups, charities and social entrepreneurs. We are working hard with charities and the wider premium rate industry to ensure that this growth area of giving retains the confidence of potential donors and is a space where innovation can flourish.

“I am looking forward immensely to judging the competition and wish all the finalists the best of luck in their preparations.”

Mobile phones ring in good news for young people giving in 2012

Tue, 27 Dec 2011 10:23:00 Z

PhonepayPlus, the UK regulator of premium rate telephone services, saw a huge increase of interest in charity text donation in 2011 and this looks set to continue in 2012.

Over 200 charities registered with PhonepayPlus in 2011, enabling those charities to set up mobile shortcode numbers that allow donors to give up to £10 to the charity via their mobile phones. Latest end-of-year figures from nfpSynergy’s Charity Awareness Monitor show that the monthly average for people donating to charity using text donations increased by 40% from 2010 to 2011.

This confirms earlier figures in a report by nfpSynergy supported by the Charities Aid Foundation (CAF) that people likely to donate by text rose from 1 in 10 in 2010 to close to 1 in 4 in 2011. These early indications show that the estimate that text donations will be worth £96 million annually by 2014 is easily achievable.

In particular, over 70% of charities see the potential of mobile phones to engage with a younger generation of donors. While the ability for people to give money by mobile is welcomed by charities, this is not just about giving money. As CAF’s recent World Giving Index shows, although globally 1% fewer people have given money to charity this year, there has been an overall rise in people giving their time and volunteering.

Young people’s interest in using mobile technology to give in innovative ways is seen in competition entries to PhonepayPlus’ PhoneBrain competition being up by over 330% this year.

The PhoneBrain social enterprise competition challenges 11 – 19 year olds to come up with a service that has a community or social benefit. Finalists, from across the UK, will present their ideas in January to a panel of industry experts at ITV’s London headquarters. The finalists will battle it out for awards of up to £1,500 to help make their idea a reality, provided by the young social entrepreneurship support organisation, Live UnLtd.

One example of such innovation is the e-Tips service idea from PhoneBrain finalist Siobhan Giles, 13, of Avonbourne School in Bournemouth. Siobhan is hoping to cross the generational tech divide with her e-Tips service. Siobhan leads an after school club for older ‘Silver Surfers’ who want to engage with digital and mobile technology. Siobhan’s service would allow older people to text any tricky questions they may have outside of the club to young advisors who would step in to offer advice and support via their mobiles.

Siobhan said:

"My idea, e-Tips, is a text service which our club members will be able use if they run into any problems following a session. For example, if they have a specific question about the internet or if something pops up on their phone that they’re unsure about. We’re really keen to support local elderly residents and ensure they do not have to fight digital exclusion alone – e-Tips will help us do that."

Other examples of innovative ideas for services that the 'PhoneBrainers' have come up with include: iSport, a phone app that encourages young people to walk and cycle to school, as well as making donations to charity during their 'commute'; Safe Streets, an app that advises people on their local neighbourhoods and any areas that they should avoid, particularly at night; and a social network for 16-24 year olds that's focused on pointing young adults in the direction of jobs and getting them in to work.

PhonepayPlus’ Paul Whiteing said:

"All of these innovative, socially useful ideas from young people point to charity text donation being the tip of the iceberg of what smartphones and micropayments, such as premium rate, can offer to volunteers, community groups, charities and social entrepreneurs. We are working hard with charities and the wider premium rate industry to ensure that this growth area of giving retains the confidence of potential donors and is a space where innovation can flourish.

"I am looking forward immensely to judging the competition and wish all the finalists the best of luck in their preparations."

Notes to editors

1. PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk .

2. The nfpSynergy report in collaboration with the Charities Aid Foundation (CAF) Sending out an SMS: the potential of mobile phones for charities and non-profits is available at http://www.nfpsynergy.net/includes/documents/cm_docs/2011/n/nfpsynergy_sms_report_version_20_july_2011.pdf

3. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or 07912 774 339 or email pressoffice@phonepayplus.org.uk

Ex-director of SMS Digital Future Limited is disqualified from being a director of a UK company for 5 years following PhonepayPlus investigations

Thu, 22 Dec 2011 10:07:00 Z

At these hearings breaches were upheld and sanctions imposed against the companies involved. SMS Digital Future went into liquidation on 6 March 2009.

Since 2009 the Insolvency Service has conducted an investigation into SMS Digital Future Limited and its sole director, Mr Oistein Jakob Mathiesen. In 2010, PhonepayPlus was approached by the Insolvency Service for assistance with its investigation. The Executive assisted by giving information about the operation of premium rate auction services that sent charged text messages to consumers using various premium rate shortcodes in the period 2007-08, and about the subsequent investigations and adjudications associated with these services.

PhonepayPlus welcomes the action taken by the Insolvency Service. Mr Oistein Mathiesen acted as director of SMS Digital Future Limited which repeatedly breached the Code of Practice and, following the company’s liquidation, other providers within the industry were left to pay the fines associated with company’s services that were in breach of the Code. As a result of the Insolvency Service investigation, Mr Mathiesen has signed a Director Disqualification Undertaking banning him from being a director of a company for a period of 5 years. The period of disqualification commences today, on Thursday, 22 December 2011.

PhonepayPlus continues to work with a wide variety of enforcement agencies to ensure companies and associated individuals fully comply with our Code and offer protection to consumers of premium rate services.

PhonepayPlus issues call for inputs on regulation of 08xx numbers

Mon, 12 Dec 2011 09:26:00 Z

This document is the result of Ofcom’s consultation on ‘Simplifying Non-Geographic Numbers’ , which highlighted a number of issues around how the market for non-geographic numbers (namely 084x and 0870 numbers) currently operates. Central to this is poor consumer confidence in many of these number ranges and a lack of price transparency.

Ofcom’s review has raised the possibility of extending PhonepayPlus’ remit to these numbers. This document sets out how regulation by PhonepayPlus could address the transparency requirements and other consumer risks that have been identified. It also sets out how PhonepayPlus could apply a proportionate approach, recognising the lower pricing tariff, and responds to some potential concerns that 08xx revenue-sharing providers may have around being regulated as premium rate services.

The document seeks inputs on these issues from providers of 08xx revenue-sharing services and from consumers (and their representative bodies) to inform the next stage of Ofcom’s consultation. PhonepayPlus will provide all responses it receives directly to Ofcom. The closing date to submit evidence is Monday, 30 January 2012.

PhonepayPlus consults on Business Plan & Budget 2012/13

Fri, 02 Dec 2011 11:09:00 Z

Following the successful launch of the new Code of Practice (Twelfth Edition) and industry-wide Registration Scheme in 2011, PhonepayPlus’ priorities in 2012 include:

Effectively embedding the new Code and Registration Scheme to ensure that they deliver the expected benefits for both the UK PRS industry and consumers. This Code is marked change from all that have gone before and is a considerable undertaking;
Strengthening the collaborative and pre-emptive approach to regulation, working with industry to drive up compliance with the Code and increase consumer confidence in the UK PRS market; and
Keeping pace with technological and market development, creating a regulatory environment in which innovation can flourish whilst new consumer risks are effectively identified and dealt with. This includes new potential risks emerging from 'in-app' billing and mobile malware.

In line with PhonepayPlus’ objectives set out in its Three-Year Strategic Plan published earlier this year, PhonepayPlus aims to maintain its effectiveness as a regulator whilst continuing to drive down the costs of regulation. The core budget for 2012/13 reflects this continued drive for efficiencies. The proposed core budget of £3.74 million reflects a 1.5% cash reduction (6.5% decrease in real terms) compared with this year’s budget. Together with the 13.2% reduction in the regulator’s core budget this year, the 2012/13 proposed core budget equals an almost 20% real terms reduction in costs over two years.

The Registration Scheme budget is presented as a separate budget in the consultation published today and views are sought on the calculation of the Registration Fee in the coming financial year.

Sir Alistair Graham, Chairman of PhonepayPlus’ Board commented:

"The philosophy underpinning this budget is one of continuing to engage with and listen to both industry and consumers, to develop effective regulation, with our key characteristics of being an independent, non-statutory and industry-funded regulator. The budget ensures that we are able to maintain our capacity for responding to technological change in the market, so that we can support innovation whilst also tackling emerging consumer risks. Good examples are our recent and ongoing work on in-app billing, malware and micropayments."

The deadline for responses to the consultation is 20 January 2012. The full draft Business Plan & Budget for 2012/13 can be viewed here.

PhonepayPlus works with premium rate industry to combat infringing websites

Wed, 02 Nov 2011 09:19:00 Z

Under the arrangement, PhonepayPlus will be informed of named websites that are selling unlicensed music so it can inform the trade bodies representing phone paid services who will then distribute the details to their members. This ensures individual phone paid operators will be aware of the illegal nature of any unlicensed websites that may approach them to provide payment services. Where PhonepayPlus is asked directly by IFPI or CoLP to assist with their investigations or preventative activity in relation to pirated music downloads offered using PRS, PhonepayPlus will act on such requests to the full extent of their powers.

The details of these unlicensed services will be obtained by IFPI anti-piracy investigators who will supply the City of London Police's Economic Crime Directorate with evidence of illegal downloads made from infringing sites. The police will review this evidence and if a case is proven against a service they will notify PhonepayPlus of its details.

Police officers have passed on the details of 24 infringing websites to date and are currently investigating the details of a further 38 unlicensed services.

MasterCard, PayPal and Visa are already working with the City of London Police and IFPI to ensure their payment services are not used by websites whose operations are based on copyright infringement.

Frances Moore, Chief Executive of IFPI, says: “PhonepayPlus is making a welcome proactive commitment to help us tackle digital piracy. Pirate websites hoping to use phone payment services as a replacement for the credit card facilities withdrawn from their sites will find they are unable to do so. These illegal business that rip-off artists, songwriters and record producers are finding it ever harder to continue to ply their lucrative trade.”

Paul Whiteing, Chief Executive of PhonepayPlus said “As a proactive regulator, we are pleased to be working with the IFPI to ensure that we stop before it starts copyright infringement using the PRS payment mechanism. Although we have not seen problems in the UK PRS market where copyright infringement is concerned, we want to pre-empt such problems before they start. We are working with PRS providers and the trade bodies who represent them to make sure a clear message goes out – there is no place in the UK PRS market for illegal content that infringes copyright.”

Det Supt Bob Wishart, City of London Police, says: “PhonepayPlus, the IFPI and the City of London Police are taking significant steps to clamp down on copyright infringement in the UK, a crime that continues to drain the lifeblood from the music industry. By working in close collaboration we are making sure that payment avenues previously open to fraudsters to facilitate digital piracy are being blocked even before they have had the chance to exploit them. This proactive approach also sends out a clear message that copyright infringement will not be tolerated in this country.”

PhonepayPlus has issued a Compliance Update on the ‘Provision of illegal music downloads using premium rate service billing’ . All PRS providers should read this update carefully.

For more information, contact:

Adrian Strain/Alex Jacob
IFPI
+44 (0)207 878 7939/40

PhonepayPlus
+44 (0) 207 940 7440
pressoffice@phonepayplus.org.uk

Notes to editors:

About IFPI
IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,400 major and independent companies in more than 66 countries. It also has affiliated industry national groups in 45 countries. IFPI’s mission is to promote the value of recorded music, safeguard the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate.

About PhonepayPlus
PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services in the UK – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk

PhonepayPlus registrations pass 3,000 mark

Mon, 24 Oct 2011 11:33:00 +0100

PhonepayPlus, the UK regulator of PRS, launched the Registration Scheme in April and registration became mandatory on 1 September 2011, when PhonepayPlus’ new Code of Practice came into force.

The Registration Scheme will provide details of all PRS providers in the UK, with benefits for both consumers and industry – helping PRS companies with their due diligence, while giving consumers better information about premium rate numbers and customer care lines. Importantly, the Registration Scheme will help the regulator to better target enforcement at the providers causing consumer harm.

Paul Whiteing, PhonepayPlus’ Chief Executive, commented:

“We are delighted to have over 3,000 providers registered with us. This is good news for the PRS industry, good news for consumers and good news for PhonepayPlus. As we look forward to working with industry to embed and enforce the new Code of Practice, it is reassuring to know that thousands of PRS providers are registered with us. This helps us to target enforcement which, in turn, helps build consumer confidence in PRS and prevent damage to the PRS market.

“We will pursue non-registered PRS providers, who will be in breach of the new Code. Any providers contracted with non-registered providers will also be in breach of the new Code, even if they are registered themselves. So we urge any stragglers – who are now very much in the minority – to register as soon as possible. All providers should check that their clients are registered.

“From the very start – when the Registration Scheme was only an idea – we have worked hard to consult with the PRS industry and to carefully consider and act on its input. That does not stop here. We continue to work with industry to improve the Registration Scheme and build consumer confidence. We will shortly undertake an evaluation of the Registration Scheme and we look forward to wide-ranging input, from all PRS providers in an increasingly diverse market.”

Postal scam chain email 2011 – PhonepayPlus’ statement

Wed, 19 Oct 2011 11:31:00 +0100

PhonepayPlus, the UK premium rate telephone services regulator, is aware that a chain email about an alleged postal scam is being circulated on the internet. The email refers to the Royal Mail, Trading Standards and ICSTIS (PhonepayPlus' former name).

PhonepayPlus appreciates that recipients of the email may want to find out more information about the alleged scam and has therefore issued the following statement:

The chain email refers to a service (operating on 0906 661 1911) that was shut down by PhonepayPlus (then ICSTIS) in December 2005. PhonepayPlus subsequently fined the company that was operating the service, Studio Telecom (based in Belize), £10,000.
The service is NO LONGER running and has NOT been running since December 2005.
You do NOT need to contact PhonepayPlus, or the Royal Mail, about this service as it was stopped almost six years ago.
If you receive a copy of the email warning you about the alleged scam, please do NOT forward it to others. Instead, please forward this statement from PhonepayPlus.
If you receive a delivery card through your letterbox which you do not believe is genuine and which asks you to dial a premium rate number, you can contact PhonepayPlus on 0800 500 212 (Mon-Fri, 9am-5pm) for further guidance.
Please go to our FAQs for useful information about how to recognise premium rate services and understand what they cost, and some simple tips to help you use services with confidence.
For more detailed information about PhonepayPlus’ work, please visit www.phonepayplus.org.uk.

Save the date: PhonepayPlus' 25th Anniversary Forum and Reception on 22 November 2011

Mon, 10 Oct 2011 14:38:00 +0100

The theme of the Forum is: The next 25 years? Looking ahead to what the future holds for PRS, m-commerce and digital content

Forum attendees will be very welcome to join us at the 25th anniversary reception that will take place in the same venue after the Forum has finished.

PhonepayPlus’ new Code of Practice and industry-wide Registration Scheme came into force on 1 September. The Registration Scheme now has over 3,000 registrants, who we extend this invitation to. Therefore, spaces will be extremely limited for the Forum and reception.

Due to popular demand, we cannot guarantee places at this free event, but you are able to pre-register your interest by sending your name, organisation name and email address to rsvp@phonepayplus.org.uk. Please try to keep pre-registrations to a maximum of two representatives per organisation.

We will inform you in due course if you have a place at the Forum and reception.

If you have any questions, please contact Sarwar Khan on 020 7940 7408.

Ofcom extends premium rate services consultation deadline

Thu, 06 Oct 2011 09:57:00 +0100

The Review of Premium Rate Services consultation looks at whether certain types of premium rate services require specific PRS regulation. In particular, PRS bought using the payment mechanism, Payforit, as well as fixed and mobile portal content services charged to the customers’ phone bill.

The revised deadline for responses is 5pm on Friday 14 October 2011.

PhonepayPlus appoints Patrick Guthrie as Director of Strategy and Communications

Thu, 06 Oct 2011 08:51:00 +0100

Patrick joins the regulator after ten years at Her Majesty’s Treasury, where he worked on EU policy issues, led a comprehensive review of gambling taxation in light of technological and regulatory changes, and spent the last four years as the senior civil servant in charge of the Treasury’s Asset Freezing Unit. Patrick brings extensive experience of developing strategy and policy at the centre of Government and he has a strong track record of working collaboratively with industry to deliver effective outcomes. As Head of the Asset Freezing Unit, he worked closely with the financial sector to strengthen the UK’s terrorist asset freezing regime and also to ensure effective implementation of international financial sanctions against countries like Iran and Libya.

PhonepayPlus’ Chief Executive, Paul Whiteing, commented: “Patrick joins us at an exciting time, just over a month after the implementation of our new Code of Practice and industry-wide Registration Scheme. Although we are pleased with the progress so far – we now have nearly 3,000 organisations fully registered – there is still a great deal of work to do in terms of bedding-in the new regulations. I believe that Patrick, with his wealth of experience as a senior civil servant working with industry to achieve positive results, will be integral in helping us do that.”

Patrick Guthrie said: “I am delighted to be joining PhonepayPlus at this important time, with the opportunity to build on the recent successful launch of the new Code and the Registration Scheme. I look forward to working closely with Paul, Joanne (Prowse) and the rest of the team at PhonepayPlus and also with the industry, consumer groups, Government and other partners, to deliver our vision of premium rate services that consumers can have total confidence in.”

PhonepayPlus publishes 10-week public consultation on app-based mobile payments

Mon, 26 Sep 2011 08:31:00 +0100

PhonepayPlus has been following developments in the applications ('apps') market for some time. There can be no doubt that apps are revolutionising the way digital content is consumed and paid for in the UK. Apps have the ability to enrich the lives of millions of consumers and are a growing and important part of the UK’s digital economy. However, just as with any technological development, they can have their downsides. PhonepayPlus is working closely with many industry providers to understand developments in the apps market – both the opportunities and the threats.

Our aim with this proposed Guidance is to intervene early to ensure that those downside risks do not have a detrimental impact on consumers, children or, indeed, the many legitimate providers of innovative new digital services.

PhonepayPlus' new outcomes-based Code of Practice, which came into force on 1 September, is accompanied by Guidance that sets out our likely interpretation of Code rules. Guidance does not form part of the Code and is non-binding on the decisions of PhonepayPlus Tribunals in the event of an investigation which requires them to adjudicate. However, it is likely that providers who have not followed any Guidance relevant to the service under investigation will be invited to explain how they have complied with the Code by other means.

The Code was published in March with 22 pieces of Guidance, and the new Code allows PhonepayPlus to change or add Guidance from time to time, subject to reasonable notice and appropriate consultation. The proposed General Guidance Note on 'Applications-based payments' is intended to join the suite of Guidance.

The 10-week consultation closes on 5 December 2011 and details of how to respond are included in the consultation document. We are particularly eager to receive feedback to these proposals from those providers who are likely to be regarded as Level 2 providers (i.e. information providers who are the final link in the premium rate delivery-chain) in an investigation under the new Code. Based on our proposals, it is these providers who are likely to have to adapt their current business processes to ensure compliance.

New premium rate Registration Scheme reveals ‘one of the most vibrant’ PRS industries in the world

Thu, 01 Sep 2011 08:59:00 +0100

The Registration Scheme is mandatory for all PRS providers operating in the UK market under the UK regulator’s, PhonepayPlus’ new Code of Practice, which came into force today.

The UK PRS market was worth £816 million in 2010 and the PhonepayPlus Registration Scheme has received wide industry support. There have been nearly 2,500 organisation registrations, with just over 10% of those (over 250) being companies registered overseas. Over 70 public limited companies have registered, with a strong showing from creative industries, including publishers, broadcasters and games developers. Over 120 charities have registered, following the successful introduction of charitable text donation.

PhonepayPlus’ Chief Executive, Paul Whiteing, thanked the industry for their support and said:

“What we are seeing in the diversity and dynamism of companies and organisations registering with us confirms what our own market research has suggested in recent years.

“The UK PRS market is an innovative sector of the UK economy and has significant potential for growth. The number of overseas companies on our database indicates that international businesses see real benefit in the UK PRS market.

“As micropayments continue to gain traction with UK consumers and grow in importance for the UK digital and creative economies, the Registration Scheme will give us the best overview of the PRS market and help us and the PRS industry provide the best environment for both consumers and business.

“I would like to take this opportunity to thank all of those who have registered and shown their support for the new Code. I would also urge all PRS providers operating in the UK market who have not yet registered with us to do so as a matter of priority.”

Rory Maguire, Head of Payment Services at mobile network, Three, commented:

“The premium rate industry in the UK is one of the most vibrant in the world and is the most successful micropayment facility for UK consumers. The PhonepayPlus Registration Scheme allows for growth in this industry by providing disincentives for rogue players and improving confidence to consumers.”

NOTES TO EDITORS:

1.     PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk
2.     To view quotes from various stakeholders in support of the new Registration Scheme, go to: www.phonepayplus.org.uk/For-Business/Registration-Scheme-Quotes.aspx
3.     If PRS providers have any questions about the need to register or about their responsibilities under the new Code, please contact PhonepayPlus’ Industry Services Team on 0845 026 1060*, or via email (compliance@phonepayplus.org.uk)
4.      For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

*Calls provided by BT will be charged at up to 5p per minute. Mobile and other providers' charges may vary and are likely to cost more.

Notice to Industry: Corrections to Guidance in support of the new 12th Edition of the PhonepayPlus Code of Practice

Fri, 26 Aug 2011 10:00:00 +0100

Background

To assist those involved in providing premium rate services (PRS) to comply with their responsibilities, PhonepayPlus has provided Guidance that sets out how it is likely to interpret the rules and requirements contained within the 12th Edition of the PhonepayPlus Code of Practice (‘the Code’) – both generally and in relation to specific service types.

Paragraphs 1.5.1 to 1.5.4 of the Code set out the status of Guidance and advice in relation to the Code. Guidance does not form part of the Code and is non-binding on the decisions of PhonepayPlus Tribunals in the event of an investigation which requires them to adjudicate. However, it is likely that providers who have not followed Guidance relevant to the service under investigation will be invited to explain how they have complied with the Code by other means.

Paragraph 1.5.3 of the Code states that Guidance may be amended from time to time on reasonable notice and following appropriate consultation. However, in this context, “amended” would refer to any substantive change made to existing Guidance and those which place different expectations upon providers.

Corrections to Guidance

22 separate pieces of Guidance were launched along with the Code in March 2011. Since this launch, we have identified a number of specific paragraphs within the body of Guidance which require minor corrections. In addition, due to a change to legislation around the conduct of employment agencies and businesses, there is a need for us required to alter information previously provided in the Service-Specific Guidance on ‘Employment, employment information and business opportunity services’ to ensure the advice it gives is consistent with the current law.

We do not propose to consult on the changes to the Guidance on ‘Employment, employment information and business opportunity services’ as they simply reflect the changes to the law. We also do not propose to consult on the other corrections as they do not substantively alter the Guidance or our expectations, and do not place any additional expectation or burden on those involved in providing PRS.

The Guidance which is being corrected, and a summary of the corrections, is as follows:

Guidance	Corrections
General Guidance Note – The appropriate use of number ranges	Paragraph 2.6, 1st bullet (referring to 0870x/0845x/0843x/0844x/0871/2/3) – at b) after “it is a chatline service” add “(i.e. a multi-party chat service)”
General Guidance Note – The conduct of live services	Introduction, 5th bullet – change “All live services” to “All live sexual entertainment services” Introduction – add new bullet for clarity to read “All live services (unless they are exempt categories) must have prior permission, and may be subject to spending caps as part of the conditions of any permission granted.” (NB this is not an additional expectation, but merely confirms an existing requirement) Paragraph 3.1 - change “All live services” to “All live sexual entertainment services” Paragraph 3.2 - change “where a service is operating” to “where a live sexual entertainment service is operating” Paragraph 3.3 - change “Any providers wishing to operate services” to “Any providers wishing to operate live sexual entertainment services”
Service-Specific Guidance Note – Directory enquiry services	Remove paragraph 3.3 (NB Professional indemnity insurance is not required in relation to directory enquiry providers enacting connection to other premium rate services – this paragraph was inadvertently included in the original Guidance Note)
Service-Specific Guidance Note – Employment, employment information and business opportunity services	Paragraph 1.1, 4th bullet – a in italicised heading change “(e.g. photographic and fashion models)” to (“except photographic and fashion models)”. Change non-italicised text to read as follows: “These services can charge for their services to work-seekers in respect of the occupations listed in Schedule 3 to the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010)) (“the Regulations”), subject to various limitations and requirements set out in the Regulations. Providers should note that the use of PRS is likely to breach the Regulations where it takes the form of ‘up-front’ costs, unless the PRS charges relate directly to the entry of work-seekers into in a job seeker or job search publication and various other requirements are satisfied, including the provision of a cooling off period. Providers are strongly advised to the Regulations for further information, and seek legal advice accordingly.”

Providers of PRS should note that these corrections have been made to Guidance available on the Code and Guidance area of the PhonepayPlus website, and take immediate effect as of today’s date, 26 August.

Notice to Industry: Changes to prior permissions from 1 September 2011

Tue, 23 Aug 2011 09:28:00 +0100

PhonepayPlus has, in the last few editions of its Code of Practice, required providers of certain categories of premium rate service, which are deemed to carry a higher than normal risk to consumers, to seek prior permission from PhonepayPlus before they operate.

Under the Eleventh Edition of the Code, such permission was sought and granted to the ‘Service provider’. However, because the new Code of Practice distributes responsibility throughout the premium rate value-chain, it has become necessary for the focus of the current prior permission regime to change.

The change affects:

Those providers that currently hold prior permission certificates prior to 1 September 2011;
Those providers that may need to seek permission after this date; and
Those providers who have failed to commence operation of their services within six months of the issue of their prior permission certificate, as these providers will need to re-apply for permission.

The Notice sets out in more detail which services require permission, as well as the party (or parties) in the value-chain that will need to obtain permission – whether a party will have to obtain prior permission is based on whether they fulfil one or more of the key conditions attached to the service which requires permission.

Although PhonepayPlus urges all providers to review their prior permission requirements as a matter of priority, it is worth noting that providers have six months (from 1 September) to update their certificates in line with the new Code. Additionally, during this period, existing services may continue to operate.

PhonepayPlus’ Industry Services Team will be on-hand to assist providers during the six-month transition period, and providers who are unsure about whether they need to seek prior permission should contact us on 0845 026 1060*.

*Calls provided by BT will be charged at up to 5p per minute. Mobile and other providers' charges may vary and are likely to cost more.

10 day countdown to regulatory changes for PRS industry

Mon, 22 Aug 2011 09:30:00 +0100

PhonepayPlus’ call to action comes 10 days ahead of the enforcement date of 1 September 2011 for the new Code of Practice and Registration Scheme. Registration is mandatory under the new Code of Practice and failure to register could incur sanctions, including fines.

Over a thousand providers have already registered on the first ever industry-wide Registration Scheme, with the regulator working with providers and trade bodies to encourage registration throughout the value-chain.

Paul Whiteing, PhonepayPlus’ Chief Executive said:

“We are delighted with the co-operation shown by the PRS industry in getting on-board and supporting the Registration Scheme. The level of registrations and engagement so far demonstrates that this is regulation enjoying wide industry support.

“From the outset, we knew that an effective Registration Scheme would need to capture the whole value-chain.

“The requirement to register – only 0871, 0872 and 0873 providers are exempt – means that a provider cannot do business with any other provider who is not registered. We know some providers have made it clear that they will no longer contract with clients after 1 September 2011 if they are not registered with us. We are therefore continuing to work hard with our industry partners in the countdown to the enforcement date to ensure that there is business continuity as we move to the new Code.

“We join with the PRS industry in asking any stragglers who have not yet registered with us, and who want to continue to do business in the UK PRS market, to register with us as a priority.”

To help all providers, the PhonepayPlus website also has ample guidance on all aspects of registration, including ‘How to Guides’ and Registration FAQs, all available at www.phonepayplus.org.uk

NOTES TO EDITORS:

3. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

Notice to Industry: Administrative charges from 1 September 2011

Wed, 17 Aug 2011 09:33:00 +0100

The administrative charge system was introduced in September 1992 to ensure that service providers found to be in breach of the ICSTIS (as PhonepayPlus was formerly known) Code of Practice made a proportionate contribution towards the costs incurred in bringing their cases to a conclusion. This principle continues in the Code at paragraph 4.10:

4.10 Administrative charge

4.10.1 A relevant party found to be in breach of the Code may be invoiced for the administrative and legal costs of work undertaken by PhonepayPlus (‘the administrative charge’).

4.10.2 Non-payment of the administrative charge within the period specified by PhonepayPlus will be considered a breach of the Code and may result in further sanctions and/or legal action.

4.10.3 PhonepayPlus may instruct a relevant Network operator or Level 1 provider to retain revenue, and/or not to provide further numbers, until the administrative charge is paid.

4.10.4 PhonepayPlus may direct the relevant Network operator or Level 1 provider to pass any previously retained funds to it up to the value of the administrative charge owed.

PhonepayPlus retains the right to review charges as, and when, required, and the new administrative charges mark the conclusion of PhonepayPlus’ most recent review.

The new charges
The new administrative charges reflect the current PhonepayPlus budget and associated new team structures. In particular, the change in charges is a result of a reduced Investigations Team and the implementation of the Complaints Resolution Team that deals with low-level consumer harm informally. These changes mean that cases coming before the Code Compliance Panel (‘CCP’) Tribunals are likely to involve more serious consumer harm and are likely to be more complex in nature. This increased complexity is reflected in the CCP rate.
The calculations of the hourly charge rates include the direct cost of personnel involved in bringing each case to a conclusion. They also include a proportion of overheads (such as rates, rent and electricity) that can be fairly attributed to those personnel.

All methodology, which remains the same for the new administrative charges, has been previously checked by PhonepayPlus’ auditors, Mazars LLP, to ensure that they are appropriate and reasonable.

The hourly charge rates were calculated using our 2011/12 budget and will apply to all
investigations that begin from 1 September 2011:

Charge Rates

Code Compliance Panel Tribunals	Pounds Sterling
Per Adjudication Tribunal case	2,322
Per Oral Hearing Tribunal half-day	2,840
Per Oral Hearing Tribunal full-day	5,680
Per Emergency procedure consideration	220
Per application for a review	300
Per Case Management Direction	220

Staff (charges per hour)	Pounds Sterling
Administrator	101
Investigations Executive	85
Head of Investigations	122
Director of Operations	268
Chief Executive Officer	374
In-house Lawyer	117
Head of Legal	219
Head of Industry Support	140

Case charges
Per secondary cases	20
Informal representations (per 1/2 hr)	162

Please note that all charges are exclusive of VAT.

How the administrative charge is calculated
The administrative charge is calculated by adding the CCP Tribunal case/matter costs to the staff costs per hour detailed above.

A simple illustration of how the costs could be calculated is as follows.

	Hours charged
Investigations Executive	5 hours @ £85 = £425
Head of Investigations	1 hour @ £122 = £122
CCP Adjudication Tribunal case	Per case = £2,322
Total administrative	£2,869

Charges for the CCP Tribunals include only the direct costs associated with members’ time and costs in preparation for and attending Tribunals.

The total administrative charge, which is referred to the Tribunal for a recommendation, will be determined by the complexity of the case and the hours spent by PhonepayPlus personnel in bringing the case to a close, as well as the cost of all secondary cases received.

At the time of raising breaches with a provider, PhonepayPlus will continue to instruct
the provider’s Network operator to withhold an estimated administrative charge from revenue generated. This estimate will take into account all secondary cases received to date.
All disbursements relating specifically to a case will also be charged to the provider (including external legal costs and, where appropriate, counsel’s fees).

In addition, where expert reports have been obtained, PhonepayPlus will seek to recover these costs, subject to the Tribunal’s recommendation as above.

Informal representations and oral hearings
As outlined above, informal representation and oral hearings incur set charges plus any other direct costs incurred by PhonepayPlus. Should a request for an informal representation or an oral hearing be subsequently cancelled by the provider, the provider will be charged for all costs incurred by PhonepayPlus up to the time of cancellation. In addition, an hourly charge will be applied for the time which had been allocated or set aside by PhonepayPlus for the informal representation or oral hearing prior to its cancellation.

The administrative charge process

The letter of adjudication sent to any Network operator or provider found to be in breach of the Code will include an administrative charge invoice. Where we are awaiting notification of external legal costs, the administrative charge invoice will be forwarded under separate cover.
Payment terms are 10 days.
VAT will be applied to all charges.
Payment by installment is not permitted.
Non-payment of the administrative charge is usually considered to be a serious breach of the Code of Practice and may result in the imposition of further sanctions.
If the administrative charge remains unpaid by a provider, the Network operator will be directed to pass over withheld funds to meet the outstanding debt to PhonepayPlus. If the full debt is not satisfied, access will be barred to all of the provider’s lines until such time as full payment is made.
If a relevant party considers that an administrative charge invoiced to it is excessive, paragraph 4.10.5 of the Code allows that party to challenge the level of the administrative charge by requesting a review in accordance with the process set out under paragraph 4.7 of the Code.

Date of application of the new charges

The new hourly rate charges will apply from 1 September 2011.

For the avoidance of doubt:

Cases opened up to, and including, 31 August 2011 will have current administrative charges applied.
Cases opened on, or after, 1 September 2011 will have the new administrative charges detailed in this Notice applied.

The critical date for determining which administrative charge regime applies is the date on which an investigation is formally opened by PhonepayPlus.

Revision
The hourly charge rates will be updated annually on 1 April, based on the then current year’s budget, unless otherwise determined by PhonepayPlus.

77 per cent decline in PRS complaints prepares way for new regulations

Mon, 08 Aug 2011 14:21:00 +0100

Other good news statistics for consumers and industry were a 74% decrease in fines to industry for serious breaches of PhonepayPlus’ Code of Practice in the last financial year, while the market grew from £810 million to £816 million in 2010.

As the UK PRS industry gears up for changes to regulation that come into force on 1 September, the news of growing consumer confidence in PRS was welcomed by the regulator, consumers and industry. PhonepayPlus’ Annual Report 2010/11 highlights the effectiveness of the collaborative regulatory model where the regulator works with the PRS industry to pre-empt consumer harm before it happens, allowing innovation that benefits both consumers and the market while acting swiftly and effectively to clamp down on services and providers that cause problems.

One consumer quoted in the Annual Report comments: ‘In my experience it is unusual to deal with a regulator who is so effective in carrying out their mandate. If they are going to promote ethical behaviour in this area of the service industry then they are doing an exceptionally important job.’ Which?’s Ceri Stanaway applauds PhonepayPlus’ no-nonsense approach to getting redress for consumers as quickly as possible, saying: ‘The rigmarole of a full complaints procedure can put many people off going through it, especially if the harm is relatively small. It’s great that PhonepayPlus has identified a way to help these people out, and make sure that relatively small harm doesn’t go unreported and unresolved.’

Consumer enthusiasm for PhonepayPlus is echoed by PRS providers who work with the regulator. Michael Newsome, Individual Giving Director for UNICEF UK, praises PhonepayPlus’ work in helping UNICEF, the world’s leading children’s charity, set up a text donations service: ‘PhonepayPlus moved heaven and earth … to make this happen. They really pushed the boat out, so now we’re able to go to supporters in a way that we’ve never been able to before … We are hugely grateful.’

PhonepayPlus’ new Code of Practice and first ever industry-wide Registration Scheme aim to build on these successes, ensuring that innovation in the PRS market – for example around apps – maintains good compliance. Joanne Prowse, PhonepayPlus’ Director of Operations said:

‘We are delighted that our work with industry to prevent consumer harm and build consumer confidence from the ground up is paying off. The new Code will give us flexible, outcomes-focused regulation that keeps pace with a fast-moving, technically innovative market and ensures consumer confidence is retained. The Registration Scheme will give both the regulator and industry a clearer view of the market throughout the value-chain and provide more accurate information for consumers via our Number Checker service. We are working hard with industry to ensure that all providers have registered their organisation and services with us by 1 September 2011. We urge any providers who have not already done so to register.’

Notes to editors

1. PhonepayPlus’ online interactive Annual Report 2010/11 can be read via this link http://www.phonepayplus.org.uk/About-PhonepayPlus/Annual-Report-2010-11.aspx

2. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

Notice to Industry: Changes to PhonepayPlus' process used to obtain revenue data during an investigation

Mon, 01 Aug 2011 09:53:00 +0100

The Code Compliance Panel (“CCP”), which makes up PhonepayPlus Tribunals, has raised issues, including concerns around potentially inaccurate service revenue as a result of revenue figures being non-verifiable by parties further up the value-chain to the party being investigated. This issue specifically affected services under investigation where multiple services were being operated on a shared shortcode.

As a result of these issues, the Investigations Team has implemented a change to the current process used to gather revenue data, with the overall objective being to ensure that the CCP is presented with accurate and independently verifiable revenue figures for any service being adjudicated. Throughout the project period, the Executive has met with a number of industry stakeholders to gain an understanding of the technical capabilities and limitations of billing systems used by various parties within the premium rate value-chain.

As part of the new service verification process, the Executive is likely to request revenue figures at the preliminary stage of a formal investigation, and before questions are asked about the promotion and operation of the service. Examples of requests may include:

Revenue generated on each individual service operating on a shared shortcode;
A breakdown in relation to the revenue generated for each Mobile Network Operator;
Call logs or message logs to support revenue data supplied; and
Invoices and copy bank statements.

The Executive is likely to request revenue data from one or more parties in the value-chain, not just the party under investigation. We may also use any other available means to independently verify service revenue.

Although the level of information we may request is likely to be more than we typically requested in the past, we will only make requests which we believe are reasonable and proportionate to an investigation. It is important that all parties under investigation co-operate fully in respect of these requests for information. In supplying information, we expect all parties to be accurate and, where we discover evidence that revenue has been falsified or deliberately omitted, we may raise a breach of the PhonepayPlus Code of Practice.

The process will be reviewed on an ongoing basis and we would welcome feedback during our dealings with providers and Network Operators in respect of any investigations.

PhonepayPlus Quarterly Operations Report 2011/12 Q1

Fri, 29 Jul 2011 10:00:00 +0100

The report details the number and type of complaints PhonepayPlus received, as well as other information relating to the way the regulator interacts with consumers and businesses.

This information was distributed to the PhonepayPlus Industry Liaison Panel on 28 July 2011.

Click here to view the Quarterly Operations Report 2011/12 Q1.

PhonepayPlus’ £50 (+ VAT) Registration Scheme rate ends on 31 July – Register and pay the cheaper rate NOW

Thu, 28 Jul 2011 15:16:00 +0100

From 1 August 2011, all premium rate providers required to register under the PhonepayPlus Registration Scheme will be charged £80 + VAT (unless they can claim an exemption). From the enforcement date of 1 September 2011, the fee rises to the full rate of £100 + VAT.

If you have not yet registered or verified your pre-registration details, you still have time to take advantage of the £50 + VAT rate. You need only register your organisation and pay the fee on, or before, 31 July to benefit, although you must also register your services for Number Checker and carry out due diligence on your clients to be fully compliant with the new Code of Practice before 1 September 2011.

To register NOW and take advantage of the earlybird rate, please click here.

PhonepayPlus publishes online, interactive 2010/11 Annual Report

Tue, 26 Jul 2011 12:41:00 +0100

The online report documents a momentous year for both the regulator and for the UK PRS market, with the launch of a fundamentally new Code of Practice and industry-wide Registration Scheme (both of which come into force on 1 September).

In addition to the new regulatory framework, the UK PRS market grew to £816 million in 2010 (up from £810 million in 2009) and PhonepayPlus saw a 52% fall in consumer complaints in 2010/11, the same decline as in 2009/10, marking a 77% decline over two years.

PhonepayPlus’ Chief Executive, Paul Whiteing, welcomed the report by saying:

"The last year has seen us not only publish a new edition of our Code, but significantly change how the UK PRS industry is to be regulated. We are no longer relying on a rules-based approach, but focusing on positive outcomes for consumers that will remain relevant no matter what market and technological developments arise.

"I would not only like to thank all of my colleagues at PhonepayPlus for their hard work, but also our industry colleagues, particularly those who have taken part in consultations, workshops and the testing of our Registration Scheme. As September approaches, let us take stock of these achievements and prepare for our first year within the new framework, where I am confident we will continue to improve compliance with our Code of Practice industry-wide."

Designed primarily as an online document (in order to minimise costs), the 2010/11 Annual Report contains short videos from industry and consumer stakeholders, as well as other interactive content.

In addition, PhonepayPlus’ Annual Report 2010/11 will be available shortly in a PDF format to download and print.

PhonepayPlus Registration Scheme: Mandatory Number Checker and Due Diligence functionalities now available

Mon, 18 Jul 2011 13:02:00 +0100

It is mandatory under the new Code of Practice that comes into force on 1 September 2011 for PRS providers to register the numbers their services operate on for PhonepayPlus’ Number Checker and to carry due diligence checks on their clients.

To carry out Number Checker registration of services and to produce Due Diligence Reports on clients, providers must first register their organisation.

Following the registration of an organisation, the Number Checker services registration can be accessed once the provider has logged in using their registration details, as can the Due Diligence Report functionality.

The ‘How to’ information sheet for Number Checker registration can be downloaded here.

The ‘How to’ information sheet for producing Due Diligence Reports can be downloaded here.

E-flyers that providers can use to alert their clients to the need to register their services for Number Checker and to carry out due diligence checks can be downloaded here.

If you have not yet registered your organisation, please click here to register.

NOTES TO EDITORS:

1. PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk .

2. Ofcom has responsibility and accountability for the regulation of premium rate services under the terms of the Communications Act 2003. However, Ofcom has appointed PhonepayPlus to deliver the day-to-day regulation of the market, granting it formal powers to protect consumers on its behalf by approving its Code of Practice.

3. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk .

Revised Notice to Industry: Launch of the Registration Scheme in support of the 12th Edition of the PhonepayPlus Code of Practice

Mon, 18 Jul 2011 12:08:00 +0100

The Notice was originally published on 27 April 2011 and was reissued on 8 June. It has now been updated further to reflect the fact that organisations that are registered on the Registration Scheme are, from today, able to use the Scheme to generate Due Diligence Reports on companies that they contract with, as well as to register their premium rate numbers/services for the population of PhonepayPlus’ Number Checker.

The details of these enhanced functionalities are outlined in the revised Notice, particularly in the sections titled ‘Due diligence and risk assessment checks using the Registration Scheme’ and ‘Registration of services’.

Click here to view the revised Notice to Industry .

PhonepayPlus publishes Independent Appeals Body decision on Transact Group (Holdings) Ltd appeal

Mon, 04 Jul 2011 09:30:00 +0100

The case was originally adjudicated on 29 October 2009 and concerned unsolicited text messages received by consumers between January and October 2009. Consumers had received SMS or WAP-push messages containing a link for virtual text chat. A number of consumers had complained to PhonepayPlus that they had never opted-in to receive these messages and were being charged for receipt of them. The original Tribunal upheld several breaches, found the case to be very serious and imposed a fine of £250,000 in addition to a Formal Reprimand and a requirement for Transact to pay refunds to complainants. Transact then requested an oral hearing which was heard on 16 July 2010.

The Oral Hearing Tribunal found that the Code of Practice had been breached in several ways and that those breaches were very serious. The Oral Hearing Tribunal imposed a fine of £167,959, together with a prohibition for six months from being involved in or contracting for any premium rate text chat services (with or without a dating element), an ordered to seek compliance advice and a bar from operating any premium rate service on four shortcodes, suspended for three months pending compliance advice being sought and acted on by the company to the satisfaction of the PhonepayPlus Executive. Transact then appealed to the IAB on the ground that the Oral Hearing Tribunal had erred in law in reaching its decision.

The IAB heard the appeal on 19 May 2011 and found that the Oral Hearing Tribunal had not erred in law in reaching its findings and decisions, except for its decision on the fine sanction which had been based on the revenue it found to have been generated by the services. The IAB decided to impose only a fine of £220,000 noting that the other earlier sanctions had already been carried out. The IAB also awarded PhonepayPlus its costs up to a set maximum.

A summary of the IAB decision can be read here.

The full IAB decision can be read here.

Premium Rate Services Industry and Regulator call for Government to review micropayments sector

Thu, 30 Jun 2011 09:18:00 +0100

The letter is in response to a call for inputs to the Government’s wide-ranging review of the regulatory regime for the UK communications sector, to ensure the regulatory framework in place is fit for the digital age. PhonepayPlus’ letter is counter-signed by telecommunications and PRS industry trade bodies, AIME, MEF and UKCTA.

With micropayments for digital content, such as media, games and virtual gifts, set to boom in coming years, PhonepayPlus and leading PRS industry trade bodies urge the Government to consider whether current regulatory approaches can keep pace with the market and achieve positive outcomes for consumers.

A research report by Analysys Mason for PhonepayPlus, The marketplace for and regulation of micropayment services in the UK (published today), outlines the opportunities and challenges for both consumers and industry in this emerging area, which mark a convergence between the financial and telecommunications sectors. Among the report’s key recommendations is the establishment of a Code of Practice to regulate the provision of, and payment for, low-value digital goods and services, which applies across multiple platforms.

The letter to the Secretary of State also raises the desire for clarity on the regulation of micropayments to encourage investment and innovation by industry in the digital content sector – a key aim of the Government’s review. A further study published today by Analysys Mason for PhonepayPlus, Premium Rate Services: International Markets and Regulation, provides a comparative analysis of premium rate service markets and regulation in twenty benchmark countries around the world.

Paul Whiteing, PhonepayPlus’ Chief Executive, said:

“As a regulator, we seek to work in partnership with the industry we regulate to achieve positive outcomes for consumers of premium rate services. It is a regulatory model that has served consumers and the market well, with complaints about PRS falling 77% over two years.

“With our research showing that the market and consumers are increasingly making use of micropayments to access content, we believe this Government review is timely. The current legislation is almost ten years old – a lifetime in terms of developments in the communications market – and PRS now has to compete with a myriad of other micropayment mechanisms, with different rules and regulations governing each.

“Both industry and regulator therefore urge the Government to take this opportunity to review the legislative and regulatory framework for micropayments, to both encourage innovation and investment and maintain and build consumer confidence in the market.”

Click here to view the joint letter to the Secretary of State.

Click here to view the research report The marketplace for and regulation of micropayment services in the UK.

Click here to view the research report Premium Rate Services: International Markets and Regulation.

NOTES TO EDITORS:

2. Ofcom has responsibility and accountability for the regulation of premium rate services under the terms of the Communications Act 2003. However, Ofcom has appointed PhonepayPlus to deliver the day-to-day regulation of the market, granting it formal powers to protect consumers on its behalf by approving its Code of Practice.

3. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

Independent Appeals Body appoints new Chair

Tue, 28 Jun 2011 09:36:00 +0100

Mr Callender Smith replaces His Honour Judge Derek Holden, who has been in the post since 2001 and has come to the end of his term.

The role of the IAB is to hear and determine appeals from Network operators, premium rate service and content providers, and associated individuals who have exhausted PhonepayPlus' internal review processes and remain dissatisfied, being of the view that the decision reached was wrong in law, based on an error of fact, or was the product of an incorrect exercise of the IAB Tribunal’s decision. This may be in respect of a finding made by a PhonepayPlus Tribunal and/or a sanction imposed by it; the refusal of an application for prior permission; or the imposition of conditions on the permission granted.

The IAB currently comprises three lay members and a legally qualified Chair; all four are completely independent of PhonepayPlus.

Mr Callender Smith brings with him a wealth of experience – he completed his final bar examinations in 1974, was a corporate lawyer in the 1980s, a Principal Crown Prosecutor in the 1990s and has since taken on various ongoing judicial appointments, including a part-time position as an Information Rights Judge.

PhonepayPlus publishes Strategic Plan for the next three years

Thu, 16 Jun 2011 10:59:00 +0100

The regulator’s Strategic Plan for the next three years builds on the successful delivery of objectives set in the Strategic Plan 2008/11. It aims to consolidate the shift to more proactive regulation that pre-empts and prevents consumer problems and encourages compliance.

The new Strategic Plan for 2011/14 has the successful implementation of the new Code of Practice and industry-wide Registration Scheme as a key objective. The Plan also identifies the strategic use of monitoring and intelligence gathering, and working with the industry to pre-empt and prevent consumer harm through greater compliance with the Code of Practice, as critical over the next period of development in regulation.

Paul Whiteing, PhonepayPlus’ Chief Executive, said:

“We have worked hard over the last three years to achieve the challenging objectives we set ourselves in the Strategic Plan 2008/10. I am proud to say that we delivered on those objectives, providing effective and proportionate regulation to the PRS industry that has seen consumer complaints fall by 77% over two years.

“However, we do not intend to rest on our laurels and the Strategic Plan 2011/14 sets equally, if not more, challenging objectives for us, driving us to provide the most effective, best value-for-money regulation for both consumers and industry in a rapidly evolving UK digital economy.”

Click here to view the Strategic Plan for 2011/14 .

Revised Notice to Industry: Launch of the Registration Scheme in support of the 12th Edition of the PhonepayPlus Code of Practice

Wed, 08 Jun 2011 09:36:00 +0100

The Notice was originally published on 27 April 2011. It has now been updated to reflect the fact that the Registration Scheme now includes the facility for all organisations, regardless of their status (e.g. plc, trust, sole trader), to register all ‘responsible persons’ (e.g. Directors, partners, trustees) during the initial registration process.

The details of this enhanced functionality are outlined in the revised Notice in the section titled ‘Information required from those who register’. Organisations that have already registered on the Scheme are able to log in and update their responsible persons on the ‘Responsible Persons’ tab.

Click here to view the revised Notice to Industry.

'Are you in?' Pre-registration now open

Tue, 31 May 2011 15:00:00 +0100

This service, offered free by the regulator, is designed to assist providers with a large client base in encouraging them to register, ensuring they will be compliant with the new rules coming into force on 1 September.

The Registration Scheme, for the first time, will see providers throughout the PRS value-chain registered with the regulator. Together with a new Code of Practice, the Registration Scheme ushers in a new regulatory framework for PRS in the UK, with more flexible, outcomes-based consumer protection coupled with greater transparency of industry participants and their behaviour.

Providers who would like to use the bulk submission service to pre-register clients should read the information sheet on ‘How to pre-register your clients on the PhonepayPlus Registration Scheme using the bulk upload template’. The information sheet can be downloaded here

Once providers know their clients have been pre-registered with PhonepayPlus, the regulator encourages these providers to use the free-to-download earlybird e-flyer to let their clients know they are pre-registered and that they need to verify the pre-registration. The earlybird e-flyer is available to download from here

To further help providers throughout the PRS industry and to encourage early registration, the earlybird registration rate of £50 + VAT has been extended an extra month until the end of July. This rises to £80 + VAT in August and the full £100 + VAT from 1 September.

Notes to editors

1. PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk .

2. Ofcom has responsibility and accountability for the regulation of premium rate services under the terms of the Communications Act 2003. However, Ofcom has appointed PhonepayPlus to deliver the day-to-day regulation of the market, granting it formal powers to protect consumers on its behalf by approving its Code of Practice.

3. For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

Ofcom publishes consultation on amending the PRS Condition

Wed, 11 May 2011 10:25:00 +0100

Ofcom considers that such an amendment is necessary for the successful implementation of PhonepayPlus’ new Code of Practice. The consultation is open from today, 11 May 2011, and closes for responses on 22 June 2011.

Click here to view the Ofcom consultation.

Notice to Industry: ‘Underage Fantasy Stories’ sexual entertainment services

Mon, 09 May 2011 09:44:00 +0100

‘Underage Fantasy Stories’ services are defined as those which make any reference or implication to the involvement of persons under the age of 18 in a sexual context, regardless of whether anyone involved in the provision of the service is, in fact, under the age of 18. All subject matter which can be categorised as such, if provided through premium rate services, is highly likely to constitute a breach of Code provisions.

How ‘Underage Fantasy Stories’ services are regulated by the 11th edition of the Code of Practice

The current Code of Practice (11th edition, amended April 2008) (the ‘Code’) is clear that sexual entertainment services and associated promotions must not contain references which suggest or imply the involvement of persons under 18 years of age; this is stated in paragraph 7.11.2 of the Code:

7.11.2 Sexual entertainment services, and promotions for them, must not contain references which suggest or imply the involvement of persons under 18 years of age.

PhonepayPlus reminds all providers of the existence of rule 7.11.2 of the Code, and hereby gives notice that any premium rate sexual entertainment services which contain content, scenarios or fantasy elements which imply, suggest or allude to the involvement of minors – i.e. ‘underage fantasy’ content – will be highly likely to breach this rule.

How ‘Underage Fantasy Stories’ services are likely to be regulated under the new edition of the Code of Practice

The new edition of the PhonepayPlus Code of Practice, due to take effect on 1 September 2011, does not contain a specific rule around the involvement, or implied involvement, of persons under 18 years of age in premium rate sexual entertainment services. However, Rule 2.5.1 of the new edition of the Code states the following:

2.5.1 Premium rate services must not cause or be likely to cause harm or unreasonable offence to consumers or to the general public.

PhonepayPlus hereby gives notice that any premium rate sexual entertainment services which contain content, scenarios or fantasy elements which imply, suggest or allude to the involvement of minors – i.e. ‘underage fantasy’ content – will be highly likely to breach Rule 2.5.1 of the new edition of the Code on the grounds of causing unreasonable offence to the general public.

PhonepayPlus also hereby gives notice that any premium rate services which provide ‘underage fantasy’ content will be subject to a formal investigation under either the 11th or new edition of the Code, depending on which Code is in force at the time the potential breach occurred. Where appropriate, PhonepayPlus will also pass details of services which provide ‘underage fantasy’ content to appropriate child protection bodies or enforcement authorities.

Should any PRS provider have suspicions or reservations about any content, they are advised to err on the side of caution and contact PhonepayPlus before the content is made publicly available.

For further assistance, please contact the Industry Affairs Team via:

Email compliance@phonepayplus.org.uk
Call 0845 026 1060*
Writing to Industry Affairs Team, Clove Building, 4 Maguire Street, London SE1 2NQ

*Calls provided by BT will be charged at up to 5p per minute. Mobile and other providers’ charges may vary and are likely to cost more.

PhonepayPlus Registration Scheme opens

Wed, 27 Apr 2011 10:16:00 +0100

The new PhonepayPlus Code of Practice was published on 30 March and comes into force on 1 September 2011. The Code requires that all Network operators and providers operating PRS in the UK are registered with PhonepayPlus. Details of how the Code rules on registration are being implemented can be found in this Notice to Industry.

PhonepayPlus has opened registration now in order to give all providers and their clients enough time to register their organisations before the Code of Practice and Registration Scheme come into force. Advice on who is required to register and what information needs to be submitted can be found here.

Network operators and providers who meet certain criteria and who wish to assist their clients with the registration process will be able to take advantage of a bulk upload service for pre-registering 50 or more organisations. Although these clients must still complete their registrations themselves, bulk uploads will help by significantly reducing the amount of time clients will need to take to complete registration.

PhonepayPlus will be launching this bulk upload service shortly, with further details outlined in the Notice to Industry. We will announce the process for submitting bulk upload requests in due course.

Further functionality of the Registration Scheme, including the registration of premium rate services to populate the Number Checker information service and the ability to carry out due diligence checks on existing and prospective business partners, will be released in the coming months, with relevant advice and information published at that time.

The registration fee for the first year of the Scheme (commencing 1 September 2011) is set at £100 +VAT. Registration is renewable on an annual basis from the date the registration fee is paid. However, no extra cost will be incurred by organisations who wish to register early, with the following discounted rates in place during the pre-enforcement period:

£50 (+VAT) for registrations in April, May and June;
£80 (+VAT) for registrations in July and August.

The following exemptions apply for the first year of operation (from 1 September 2011):

Exemption from the requirement to register: Network operators and provider who only operate premium rate services on the 0871/2/3 number ranges;
Required to register but exemption from the requirement to pay a registration fee: charities registered in the UK;
Required to register but exemption from the requirement to pay a registration fee: providers of PRS whose total PRS revenue from outpayments is less than £5,000 in the current year.

Organisations are obliged to ensure that information relating to their registration remains complete and accurate. It will be a breach of the Code of Practice to provide incomplete or inaccurate information on the Registration Scheme.

To assist the industry, there is further advice and information available during the registration process as well as on the PhonepayPlus website. There is also a Registration Helpdesk available on 0844 264 1222*.

*Calls provided by BT will be charged at up to 2p per minute. Mobile and other providers’ charges may vary and are likely to cost more.

Notice to Industry: Launch of the Registration Scheme in support of the 12th Edition of the PhonepayPlus Code of Practice

Wed, 27 Apr 2011 09:32:00 +0100

NOTICE TO INDUSTRY – LAUNCH OF THE REGISTRATION SCHEME IN SUPPORT OF THE 12TH EDITION OF THE PHONEPAYPLUS CODE OF PRACTICE

Issued on 27 April 2011

FOR THE ATTENTION OF ALL THOSE INVOLVED IN PROVIDING PREMIUM RATE SERVICES FOR THE PURPOSES OF SECTION 120 OF THE COMMUNICATIONS ACT 2003

Background

A Notice was issued by PhonepayPlus on 30 March 2011 to inform all those who provide premium rate services for the purposes of section 120 of the Communications Act 2003, that the 12th Edition of the PhonepayPlus Code of Practice (“12th Code”) had been published and approved by Ofcom on 30 March 2011, and would come into force on 1 September 2011.

The Notice of 30 March 2011 drew particular attention to certain requirements of the new Code, including the requirements to register organisations and premium rate services with PhonepayPlus and a requirement not to contract with other Network operators, Level 1 and Level 2 providers unless they are registered with PhonepayPlus.

About this Notice

This Notice is to inform all those who provide premium rate services (PRS) for the purposes of section 120 of the Communications Act 2003, that the Registration Scheme which providers must use to register, and which they can use to perform checks on other registered parties, has been launched on 27 April 2011 to allow for registration ahead of the 12th Code of Practice coming in to force. In addition, this Notice is to draw attention to the provisions of the 12th Code relating to registration, and how PhonepayPlus will interpret those provisions.

Requirement to register

This is a requirement by virtue of paragraph 3.4.1 of the 12th Code which provides that:

3.4.1 – Before providing any premium rate service all Network operators, Level 1 and Level 2 providers must register with PhonepayPlus subject only to paragraph 3.4.3 below [exempt services]

For the avoidance of doubt, all Network operators, Level 1 and Level 2 providers who intend to provide premium rate services from 1 September 2011 onwards must register with PhonepayPlus by that date. This is with the exception of those who provide “exempt services”, as set out later in this Notice.

In any corporate group structure, any and all companies within the group which are themselves Network operators, Level 1 providers or Level 2 providers, as defined by the Code, will be required to register.

The definitions of Network operator, Level 1 provider and Level 2 provider are at paragraphs 5.3.4, 5.3.8(a) and 5.3.8(b) of the 12th Code respectively. PhonepayPlus has also published a General Guidance Note on the ‘Definitions of those involved in providing PRS’ which can be viewed on its website.

Notice of registration fee for 2011/12

Payment of a registration charge is a requirement of paragraph 3.4.7 of the 12th Code which provides that:

3.4.7 PhonepayPlus will make a reasonable charge for such registration and for annual renewal of registration. PhonepayPlus will set the amount of the charge, giving reasonable notice to interested parties. All Network operators, Level 1 and Level 2 providers who wish to register must pay the charge

In order to register during the financial year 2011/12, registrants are required to pay a fee of £100+VAT. In future years, this fee may vary up or down, according to numbers of registrants and other relevant factors. PhonepayPlus will issue notice of any future changes to the fee as appropriate. The accepted methods of payment are UK credit and debit cards.

Exemptions from a requirement to register

Paragraphs 3.4.2 and 3.4.3 of the Code state:

3.4.2 PhonepayPlus may identify particular categories of premium rate services in respect of which registration will not be required (‘exempt services’). PhonepayPlus will provide public notice of any such exempt services and will publish a full list of exempt services from time to time

3.4.3 Network operators, Level 1 and Level 2 providers who provide only exempt services are not required to register with PhonepayPlus

PhonepayPlus hereby draws attention to the following services and providers who are exempt from the requirement to register with PhonepayPlus:

Exempt services

Services provided on the 0871/2/3 number range

Exempt Network operators, Level 1 and Level 2 providers

Those who provide services only on the 0871/2/3 number range

This exemption is initially for a 12-month period from 1 September 2011.

In addition, the following types of organisation will be required to register, but will not be required to pay a registration fee:

Charities engaged in PRS activity, which are registered as charities in England, Wales, Northern Ireland or Scotland. Charities registered as being such only in foreign jurisdictions will not be exempt from a requirement to pay the registration fee;
Organisations who earn less than £5,000 in total revenue from premium rate services.

For the avoidance of doubt, “organisations who earn less than £5,000 in total revenue from premium rate services” relates to Level 2 organisations whose gross outpayments received from one or more Level 1 providers to whom they are contracted is £5,000 or less during the annual period from the date of their registration to the due date of renewal of their registration.

To qualify for exemption, a provider must provide the registration number(s) of one or several registered premium rate providers from whom they receive outpayments, so that PhonepayPlus can verify the claim for exemption from the requirement to pay a registration fee.

Providers whose premium rate revenue exceeds £5,000 during the year they are registered will be required to update their registration status from “exempt” to “payable” by contacting PhonepayPlus in the first instance. Upon receiving contact from a provider, PhonepayPlus will update their registration and request payment of the fee from the date the organisation declared itself to be earning revenue over £5,000. The registration will then be valid for 12 months from this new date.

These exemptions from the requirement to pay a registration fee are initially for a 12-month period from 1 September 2011.

Information required from those who register

Paragraph 3.4.4 of the 12th Code provides that:

3.4.4 Registration will require the provision of such information as PhonepayPlus may from time to time require for the purpose of efficient and effective regulation of premium rate services

It will be the responsibility of all organisations who register to:

Complete registration fully and provide all mandatory information;
Pay the registration fee (with the exception of those who are exempt from payment).

Information which is mandatory for those registering is as follows:

Private limited companies (including those with charitable status), public limited companies, foreign companies (i.e. those who are registered outside the UK):

Organisation name;
Organisation address;
Full name, email address and date of birth of all Directors;
Companies House number (if applicable);
Registered charity number (if applicable);
Trading name(s);
Address for receiving instructions and regulatory contact number and email address.

Partnerships and foreign partnerships (normal or limited liability):

Organisation name;
Organisation address;
Full name, email address and date of birth of all partners or members (the names of partners will not be required during the initial registration process, but registrants will need to provide this information once registered, by accessing the ‘Directors’ tab within their registration account);
Trading name(s);
Address for receiving instructions and regulatory contact number and email address.

Trusts:

Organisation name;
Organisation address;
Full name, email address and date of birth of all trustees (the names of trustees will not be required during the initial registration process, but registrants will need to provide this information once registered, by accessing the ‘Directors’ tab within their registration account);
Trading name(s);
Address for receiving instructions and regulatory contact number and email address.

Sole traders:

Sole trader full name and date of birth;
Organisation address;
Trading name(s);
Address for receiving giving instructions and regulatory contact number and email address.

Public/’Third” sector organisations (including bodies, agencies and authorities):

Organisation name;
Organisation address;
Full name, email address and date of birth of all non-executive directors (the names of non-executive directors will not be required during the initial registration process, but registrants will need to provide this information once registered, by accessing the ‘Directors’ tab within their registration account);
Trading name(s);
Address for receiving instructions and regulatory contact number and email address.

Pre-registration by one organisation on behalf of another

Any party within a premium rate value-chain, in the period leading up to the 1 September when the 12th Code comes into force, may pre-register organisational information about other organisations subject to the following conditions:

The party who is pre-registering another party must themselves be registered as an organisation on the Registration Scheme;
Data must be provided in the prescribed spreadsheet as provided by PhonepayPlus;
The party pre-registering other organisations must be registering more than 50 organisations;
Spreadsheets containing errors will be rejected. PhonepayPlus will endeavour to identify the causes to enable you to resubmit.

It remains the responsibility of organisations who have been pre-registered by other organisations to validate the information provided, ensure the registration contains all mandatory information and make payment where required to do so.

Updating of information

This is a requirement of paragraph 3.4.5 of the 12th Code which provides that:

3.4.5 Information provided to PhonepayPlus for the purposes of registration must be updated as soon as is practicable

Organisations are obliged to ensure that information relating to their registration remains complete and accurate. PhonepayPlus will not validate every entry on the database due to the operational costs of doing so, but may monitor the completeness of registration data. Non-compliance with the requirements of registration may result in informal or formal procedures, as appropriate, being initiated.

It will be a breach of the Code to provide incomplete or inaccurate information on the Registration Scheme. In the event of any investigation into the registration status of an organisation, PhonepayPlus will consider the extent to which registration details are complete and accurate.

Where registered parties perform due diligence checks on other registered parties using the database, it is their responsibility to ensure that the information on which they are relying is complete and accurate.

Renewal of registration

This is a requirement of paragraph 3.4.6 of the 12th Code which provides that:

3.4.6 Registration must be renewed annually or at intervals determined by PhonepayPlus

Registration renewal notices will be sent to the regulatory contact stored on the Registration Scheme in advance of the renewal date. Renewal of registration and payment of the annual fee, where appropriate, must be made without delay. For the period 2011/2012, eligible organisations must register by 1 September 2011.

De-registration

Paragraph 3.4.10 of the 12th Code which provides that:

3.4.10 A registered party which is not providing any premium rate service or is providing only exempt services may de-register at any time but their details will continue to be held by PhonepayPlus for a reasonable period

PhonepayPlus hereby gives notice that organisations that de-register will not be offered a full or partial refund of any registration fees paid.

Due diligence and risk assessment checks using the Registration Scheme

Paragraphs 3.3.2 and 3.4.8 of the 12th Code provides that:

3.3.2 In connection with the provisions of premium rate services which are not exempt services (see paragraph 3.4.2 below), Network operators, Level 1 and Level 2 providers must only contract with other Network operators, Level 1 or Level 2 providers which are registered with PhonepayPlus

3.4.8 All breaches and sanctions imposed under this Code (this edition and any previous editions) on any Network operator, Level 1 or Level 2 provider will be linked to that Network or provider’s registered details together with any relevant information arising from adjudications concerning associated individuals or any other relevant information which is publically held

Once the database has been populated, and before commencement of the requirement to register on 1 September 2011, registered providers will be able to search the information provided by other registered providers on the database. It is the obligation of the organisation using the database to undertake sufficient checks to be satisfied that the information on which they are relying is complete and accurate.

Should there be an investigation into a breach of paragraph 3.1.3 of the 12th Code in relation to a failure to assess and control the risk which a client had presented, a record of any check performed, or otherwise, will be used as evidence.

What a due diligence or risk assessment check will display

In addition to information about a registered party and its director(s), the database will also make available to anyone who performs a check any breaches that an organisation has had on record over the previous three years (for breaches regarded as “serious” by a PhonepayPlus Tribunal) or five years (for breaches regarded as “very serious”).

As organisations register with PhonepayPlus, any relevant breaches will be matched against their record on the database. Organisations that have not registered, but which have breaches against them in the relevant period, will show up on the database where a due diligence check is performed.

PhonepayPlus will also match information of individuals who are associated with previous breaches of the Code to their current and new organisation’s record, so that future potential business partners are fully aware of the individual’s track record and can then undertake effective risk assessment before doing business with them.

PhonepayPlus will also match directors and owners who register as being responsible for more than one provider, so that when that director’s or owner’s organisation is in breach of the Code, this information will be shared on the database. Before such information sharing takes place, PhonepayPlus will offer individuals the chance to validate the connection before it takes an evidence-based decision.

Trial period during which information about ongoing investigations will be displayed on the database

For an initial six-month trial, commencing from 1 September 2011, any checks will also display ongoing investigations into the party against whom the check is being performed. An “ongoing investigation” would, for this purpose, be characterised as follows:

An investigation proceeding under the Track 2 or Emergency Procedure (as defined in the 12th Code) and for which either a formal request for information or a breach letter has been issued, whichever is the sooner, until such time as the investigation is completed.

Registration of services

Paragraph 3.4.12 of the 12th Code provides that:

3.4.12 Numbers

(a) Level 2 providers must provide to PhonepayPlus relevant details (including any relevant access or other codes) to identify services to consumers and must provide the identity of any Level 1 providers concerned with the provision of the service

(b) PhonepayPlus will include all such details on the PhonepayPlus Register and those details will be available to be checked directly by consumers

(c) Whenever the information provided under sub-paragraph 3.4.12(a) above changes, the updated information must be provided to PhonepayPlus within two working days of the change

It is the responsibility of the Level 2 provider to ensure each of their services is registered on the database by 1 September 2011. This is to ensure that consumers can immediately check the identity of any service by entering a search on the database against the number or other access code, and obtain a customer care number in respect of the service.

The facility that relates to searches against numbers or other access codes, known as the Number Checker, will be introduced during the period of pre-enforcement to allow for the registration of services by 1 September 2011. The date that the Registration Scheme will be open for the registration of services to populate the Number Checker will be notified in due course.

Each organisation in the value-chain for a premium rate service, (excluding affiliates who would not be defined as a Network operator, Level 1 or Level 2 provider), must register as a provider before any service is provided to consumers.

Providers must register a service within two working days of it being provided to consumers.

Mandatory information when registering services

The mandatory information required for the registration of each service is:

The PRS access number or code;
The ID of the next contracted party in the value-chain (a Level 1 provider under the Code);
The customer care telephone number;
The ID of the company providing customer care.

In addition, the facility will exist to allow providers to populate further information on a voluntary basis in order to assist their consumers. This includes:

Service name;
Service type;
Email address;
Customer care information.

Any party associated with the delivery of a service can register that service and can assign themselves data ownership – i.e. the ability to amend or supply additional data. In effect, this allows Level 1 providers to register services on behalf of their Level 2 clients. For the avoidance of doubt, the Level 2 provider retains primary responsibility for ensuring services registered by another party comply with Part Two of the 12th Code.

Customer care numbers do not necessarily have to be operated by a Level 2 provider, provided there is a mechanism for receiving and considering consumer complaints as set out at Rule 2.6 of the 12th Code. The Level 2 provider will remain responsible for the operation of its customer care arrangements in compliance with the Code.

Where a service operates on a shared mobile shortcode, the Level 1 provider may choose to designate themselves as the customer care provider. The Level 2 provider retains responsibility for ensuring customer complaints and enquiries are handled in compliance with the Code, but the Level 1 provider will be responsible for ensuring that these complaints are quickly passed on to the Level 2 provider.

Enforcement

PhonepayPlus will continue to monitor premium rate services, and perform other such checks as are necessary, to ensure that the 12th Code is complied with. This will include monitoring of the Registration Scheme to ensure that it is being used in compliance with the Code of Practice.

Phone romance up by a third, as mobile flirts splash out on virtual gifts

Thu, 21 Apr 2011 10:00:00 +0100

Spending on flirt and dating services charged to mobile phones increased by 36% in 2010, a recent report shows.

The Current and Emerging Trends in the UK Premium Rate Services report, published by the UK premium rate telephone services (PRS) regulator, PhonepayPlus, shows spending on flirt and chat services was up by 36%, from £25.5 million in 2009 to £34.7 million in 2010.

The report highlights the attraction for the mobile generation of ‘flirting-on-the-go’, fuelled by virtual gifts for phone flirts’ romantic interests. For example, one mobile and online flirting service reported ‘explosive sales’ of virtual gifts over Christmas 2009, selling 28,000 gifts – such as virtual Christmas stockings – in the five days between Boxing Day and New Year’s Eve, equating to 233 gifts an hour.

Paul Whiteing, PhonepayPlus’ Chief Executive, commented:

“As a regulator, we welcome innovation in the market and very much want consumers to enjoy fun new services with the reassurance that there is a regulator working with industry to prevent consumer harm.

“All romantics, Royal or not, can be reassured that if they choose to mobile flirt using PRS as a micropayment PhonepayPlus and the PRS industry are working together to give them the best protection. Every consumer, whatever service they use and whatever micropayment mechanism they pay by, deserves such protection.”

Men are far more likely to phone flirt, with 63.2% of users being male compared to 36.7% female users. 18-34 year olds are the highest users of mobile flirting and dating, with 11.8% of 18-24 year olds and 14.4% of 25-34 year olds using a flirt, chat or dating PRS in the last six months, compared with an average across all adults of 5.6%.

PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk.
Ofcom has responsibility and accountability for the regulation of premium rate services under the terms of the Communications Act 2003. However, Ofcom has appointed PhonepayPlus to deliver the day-to-day regulation of the market, granting it formal powers to protect consumers on its behalf by approving its Code of Practice.
This research was primarily conducted between October and December 2010, and comprised an online consumer survey (14,062 respondents aged 11 upwards) and 17 in-depth telephone interviews with industry stakeholders from across the in telecoms value chain. In addition, desk research, data from PhonepayPlus and data from Analysys Mason contributed to the market analysis.
The sale of 28,000 virtual gifts in the five days between Boxing Day and New Year’s Eve in 2009 was recorded by mobile and online flirting service Flirtomatic.
For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

PhonepayPlus Quarterly Operations Report 2010 11 Q4

Wed, 20 Apr 2011 10:00:00 +0100

This information was presented to the PhonepayPlus Industry Liaison Panel on 19 April 2011.

Click here to view the Quarterly Operations Report 2010/11 Q4.

Notice to Industry: Administrative charges from 1 April 2011

Fri, 01 Apr 2011 10:00:00 +0100

The administrative charges are applied to service providers and information providers (where a case has proceeded against an information provider) (‘providers') found in breach of the Code. The charges also apply to network operators (‘networks') that are found to be in breach of the Code.

The review of administrative charges will take place over the next few months and will include discussions with industry stakeholders on the methodology employed to calculate the charges. The administrative charges system is evidence of PhonepayPlus' ongoing commitment to provide effective and proportionate regulation to the industry based on the ‘polluter pays' principle.

Background

An administrative charge system was first introduced in September 1992 and was substantially altered in January 2008 from a fixed charge for a category of case (whether simple, standard or complex) to an hourly rate for investigations that more properly reflected the time and expense incurred by PhonepayPlus personnel in bringing cases to a conclusion. The fixed charges for adjudication panels and oral hearings remained in operation.

Code provisions

The relevant provisions of the eleventh edition of the Code dealing with administrative charges are to be found at paragraphs 8.12 and 9.2.6

8.12 "All service providers found to be in breach of the Code may be invoiced for the administrative and legal costs of the work undertaken by PhonepayPlus. Non-payment within the period laid down by PhonepayPlus will also be a breach of the Code and may result in further sanctions being imposed. PhonepayPlus may direct that the relevant network operator withholds and passes to PhonepayPlus the sum(s) due from the payments outstanding under the contract between the network operator and the service provider."

9.2.6 "All network operators on whom a sanction is imposed may be invoiced for the administrative and legal costs of the work undertaken by PhonepayPlus. Non-payment within the period laid down by PhonepayPlus will be a failure by the network operator to comply with its obligations under the Code and may result in the imposition of a further sanction direction."

These provisions are replicated in the Twelfth Edition of the Code in section 4.10, as below:

4.10 Administrative charge

4.10.1 “A relevant party found to be in breach of the Code may be invoiced for the administrative and legal costs of work undertaken by PhonepayPlus (‘the administrative charge’).”

4.10.2 “Non-payment of the administrative charge within the period specified by PhonepayPlus will be considered a breach of the Code and may result in further sanctions and/or legal action.”

4.10.3 “PhonepayPlus may instruct a relevant Network operator or Level 1 provider to retain revenue, and/or not to provide further numbers, until the administrative charge is paid.”

4.10.4 “PhonepayPlus may direct the relevant Network operator or Level 1 provider to pass any previously retained funds to it up to the value of the administrative charge owed.”

4.10.5 “If a relevant party considers that an administrative charge invoiced to it is excessive it may challenge the level of the administrative charge by requesting a review in accordance with the process set out at paragraph 4.7 above.”

Administrative charge rates

Hourly rate charges for investigations

Personnel

Hourly Charge (£)
2011/12

Administrator 71

Investigations Executive 84

Head of Investigations 139

Head of Industry Support 127

Director of Strategy & Communications
239

Chief Executive 337

Head of Legal 165

In-house Lawyer 106

Fixed rate charges for Tribunals

Per Adjudication Case

1,467

Oral hearing - per half day
3,060

Emergency procedure decision 240

Application to review an adjudication
320

Secondary case charges (per case) 20

Informal representations (per half hour)
165

NB All charges are exclusive of VAT

Notes on administrative charges

Charges for Tribunals include only the direct costs associated with Code Compliance Panel (CCP) members' time and costs in preparing for and attending the panels.
The total administrative charge, which is subject to the CCP’s recommendations to the PhonepayPlus Executive, will be determined by the hours spent by PhonepayPlus personnel in bringing the case to a close, as well as the cost of all secondary cases received.
All disbursements relating specifically to a case will also be charged to the provider (including external legal costs and, where appropriate, counsel's fees). It should be noted that:
- The Administrator's costs of preparing papers for a Tribunal are included in the fixed charge for the Tribunal;
- There is a separate Administrator's and photocopying charge in connection with the papers prepared for an Oral Hearing, as these are invariably substantial and cannot be estimated in advance; and
- An Oral Hearing is clerked by a junior barrister appointed by the CCP whose fees are separately charged as a disbursement.
Informal representations to a Tribunal can be requested by a network or a provider for a period of half an hour, or an hour.
The CCP has clarified that it requires the Head of Investigations, PhonepayPlus’ In-house Lawyer and the Investigations Executive responsible for the case at informal representations. The attendance of these members of the PhonepayPlus Executive at informal hearings is reflected in the revised half hour charge.
The fee of £320 for an application to review an adjudication is payable on submission of the application. If the application is granted, the review itself will be charged on the ‘per adjudication case' basis, if the network or provider is found on review to be in breach of the Code.
The charge for secondary cases reflects the cost of receiving and logging a complaint as evidence for an investigation, the cost of keeping the complainant informed of the progress and outcome ofthe complaint, and the arrangements for a call charge refund when sanctioned.
At the time of raising breaches with a provider, PhonepayPlus will continue to instruct the provider's network operator to withhold an estimated administrative charge from revenue generated. This estimate will take into account all secondary cases received to date.

Cancellations

As outlined above, there is a charge for an oral hearing of £3,060 per half day. Should a request for an oral hearing be subsequently cancelled by the network or provider, the network or provider will be charged for all costs incurred by PhonepayPlus up to the time of cancellation. If the cancellation is made less than five working days before the hearing, the fixed charges for the hearing will apply.

The administrative charge process

The letter of adjudication sent to any network or provider found to be in breach of the Code will include an administration charge invoice. Where we are awaiting notification of external legal costs, the administration charge invoice will be forwarded under separate cover.
Payment terms are ten days.
VAT will be applied to all charges.
Non-payment of the administration charge is considered to be a serious breach of the Code, and
may result in the imposition of further sanctions by a Tribunal.
If the administrative charge remains unpaid by a provider, the network operator will be directed to
pass over withheld funds to meet the outstanding debt to PhonepayPlus. If the full debt is not
satisfied, access will be barred to all of the provider's lines until such time as full payment is made.

Date of application

The above rates for all fixed charges applied from 1 April 2010, irrespective of the date the investigation commenced.

PhonepayPlus publishes new ‘fit for the future’ Code of Practice

Wed, 30 Mar 2011 10:00:00 +0100

The new Code of Practice is built around very clearly defined consumer outcomes, such as pricing transparency, good customer service and respecting consumers’ privacy, especially important in the online age. For the first time, PhonepayPlus will directly regulate every part of the PRS value-chain, ensuring that all providers share responsibility for delivering good consumer outcomes, while allowing the regulator to better target that minority of providers who cause consumer harm. The new Code also helps support innovation in the market by allowing providers flexibility in how they comply with the Code, so that they might adapt their services to take full advantage of digital technology, including social networking and smartphone apps.

PhonepayPlus’ Chief Executive, Paul Whiteing, commented:

“The result of over two years’ development, including in-depth consultation with industry and consumer stakeholders, our new Code of Practice is designed to be fit for the future. We are in a fast-moving age for communications, where we are seeing more and more innovative use of micropayments, including PRS, in the digital arena. 2010 saw an explosion in virtual goods, with the market driven by social networking sites expanding by over 400%. We are seeing more and more innovations in the PRS market, from virtual jukeboxes in bars and clubs to charity badges for phones.

“As the market for PRS and other micropayments expands, our new Code of Practice, with its clear focus on what matters to consumers, will be flexible enough to deal with innovations in the digital and micropayment worlds as they happen. We are proud of the new Code of Practice and look forward to working with the PRS industry to build and sustain consumer confidence in these exciting new markets.”

Click here to view the new Code of Practice, which will come into effect on 1 September 2011.

Click here to view the Notice of Implementation, which sets the out the requirements under the new (12th edition) Code of Practice for which PRS providers need to have made all necessary arrangements by 1 September.

Click here to view the 22 pieces of Guidance that support PhonepayPlus’ new Code of Practice.

Click here to view an interactive version of the new Code and accompanying Guidance.

Click here to view PhonepayPlus’ Investigations & Sanctions Procedure and the revised schematic, which will accompany the new Code of Practice and Guidance when they come into effect on 1 September.

Click here to view PhonepayPlus’ final statement following its public consultations on the new Code of Practice and supporting Guidance.

NOTICE TO INDUSTRY – PUBLICATION AND IMPLEMENTATION OF THE 12TH EDITION OF THE PHONEPAYPLUS CODE OF PRACTICE

Wed, 30 Mar 2011 10:00:00 +0100

This Notice is being issued to inform all those who provide premium rate services for the purposes of section 120 of the Communications Act 2003, that the 12th Edition of the PhonepayPlus Code of Practice (‘the 12th Code’) has been published and approved by Ofcom on 30 March 2011, and will come into force on 1 September 2011.

Those involved in providing premium rate services should familiarise themselves with the 12th Code before 1 September 2011, and make all preparations necessary to ensure that the provisions of the 12th Code are not breached from 1 September 2011 onwards. In particular, we would draw attention to the following requirements of the 12th Code, for which we will expect providers to have all necessary arrangements in place to meet by 1 September 2011.

Requirement to register with PhonepayPlus

The following paragraphs of the 12th Code relate to a requirement to register with PhonepayPlus:

3.4.1 Before providing any premium rate service all Network operators, Level 1 and Level 2 providers must register with PhonepayPlus subject only to paragraph 3.4.3 below.

3.4.2 PhonepayPlus may identify particular categories of premium rate services in respect of which registration will not be required (‘exempt services’). PhonepayPlus will provide public notice of any such exempt service and will publish a full list of exempt services from time to time.

3.4.3 Network operators, Level 1 and Level 2 providers who provide only exempt services are not required to register with PhonepayPlus.

For the avoidance of doubt, Network operators, Level 1 providers and Level 2 providers are defined by the 12th Code as follows:

5.3.4 [...], ‘Network operator’ means, for the purposes of this Code in respect of any premium rate service, a person who falls within Section 120(10) or Section 120(11) of the Act and:

(a) who is a lead network; or

(b) has a direct network connection and has direct billing arrangements in respect of that connection with the lead network; or

(c) through arrangements made with a lead network, provides electronic communication services to the public and bills the public directly, and can perform or can require the performance of all the obligations that are set out in Section 3 of the Code; or

(d) if no-one falls within (a), (b) or (c) above, the Network operator shall be the person who falls within Section 120(10) or (11) and, in respect of the premium rate service or services in question, provides or has, in the reasonable opinion of PhonepayPlus, the closest or most substantial connection with the provision of the communications network used for the provision of the premium rate service.

A direct network connection exists when a person provides switching equipment (to currently accepted industry standards), which by interconnection arrangements made between that person and the lead network, enables the conveyance of signals between the lead network and that person.

5.3.7 Any person who falls within Section 120(9)(a)-(d) or Section 120(10) or (11) of the Act who is engaged in the provision of a Premium rate service (‘the relevant premium rate service’) and who is not a Network operator in respect of that service may be a Level 1 and/or Level 2 provider.

5.3.8 (a) A Level 1 provider is a person who provides a platform which, through arrangements made with a Network operator or another Level 1 provider, enables the relevant premium rate service to be accessed by a consumer or provides any other technical service which facilitates the provision of the relevant premium rate service.

(b) A Level 2 provider is the person who controls or is responsible for the operation, content and promotion of the relevant premium rate service and/or the use of a facility within the premium rate service.

All parties who fall into the definition of Network operator, Level 1 provider or Level 2 provider in respect of any role they play in the provision of a premium rate service must register with PhonepayPlus by 1 September, subject to the exemptions set out below. Registration can be performed through the PhonepayPlus website from a date in April, to be confirmed. There is a fee for registration which is £100 plus VAT for the financial year 2011/12, payable by credit/debit card upon registration through the website.

Exemptions to registration are as follows:

Those involved in providing a premium rate service who fall outside the definitions at paragraphs 5.3.4, 5.3.7 and 5.3.8(a) & (b) of the 12th Code;
Those who would otherwise have to register, but who only provide premium rate services on the 087 number range.

Those who will be required to register, but will not have to pay a fee for doing so, are as follows:

Charities registered with the relevant body for England, Northern Ireland, Scotland or Wales;
Those whose total annual premium rate services revenue is £5,000 per annum or less.

Requirement to ensure clients are registered with PhonepayPlus, where necessary, before contracting with them

The following paragraphs of the 12th Code relate to a requirement to contract only with other registered parties, where that party performs a role that would require that they register:

3.3.2 In connection with the provision of premium rate services which are not exempt services (see paragraph 3.4.2 below), Network operators, Level 1 and Level 2 providers must only contract with other Network operators, Level 1 or Level 2 providers which are registered with PhonepayPlus.

3.3.3 Such contracts must include provisions that:

(a) each party is bound to comply with the Code and any directions made by PhonepayPlus in accordance with it; and

(b) pursuant to section 1 of the Contracts (Rights of Third Parties) Act 1999, PhonepayPlus may directly enforce the relevant term(s) of that contract.

3.3.4 Any breach of these provisions concerning the obligations of Network operators and Level 1 and Level 2 providers in respect of contracts will be regarded as very serious Code breaches.

All those subject to this Notice must ensure that any parties with whom they intend to contract on or after 1 September to provide premium rate services, and who are not exempt from a requirement to register, are registered with PhonepayPlus. Checks can be performed on the PhonepayPlus Registration Scheme from July 2011.

Requirement to register premium rate services

The following paragraphs of 12th Code relate to a need for all Level 2 providers to register details of their services with PhonepayPlus:

3.4.12 Numbers

(a) Level 2 providers must provide to PhonepayPlus relevant details (including any relevant access or other codes) to identify services to consumers and must provide the identity of any Level 1 providers concerned with the provision of the service.

(b) PhonepayPlus will include all such details on the PhonepayPlus Register and those details will be available to be checked directly by consumers.

(c) Whenever the information provided under sub-paragraph 3.4.12(a) above changes, the updated information must be provided to PhonepayPlus within two working days of the change.

All those who would be defined as Level 2 providers under the 12th Code, and who are providing premium rate services from 1 September 2011, must register those services with PhonepayPlus before 1 September 2011. Registration of services can be performed through the PhonepayPlus website from a date in April, to be confirmed.

Requirement to perform due diligence on clients, and to have systems in place to comply with the Code and assess the risk posed by clients

The following paragraphs of the 12th Code relate to a need for all Network operators, Level 1 and Level 2 providers (in respect of Code paragraphs 3.1.1 and 3.1.3) to ensure they have such systems in place as to effectively comply with the Code, assess the ability of their clients to do so on an ongoing basis and have an ongoing plan to control any risk presented by clients. Network operators and Level 1 providers (in respect of paragraph 3.3.1) are also required to perform due diligence on their prospective clients:

All Network operators, Level 1 and Level 2 providers must:

3.1.1 ensure that PhonepayPlus regulation is satisfactorily maintained by;

(a) taking all reasonable steps in the context of their roles, including the adoption and maintenance of internal arrangements to ensure that the rules set out in Part Two are complied with and the outcomes achieved in respect of all premium rate services with which they are concerned, and

(b) carrying out their own obligations under the Code promptly and effectively, and

(c) taking all reasonable steps to prevent the evasion of, and not to undermine, the regulation of premium rate services, and

(d) taking all reasonable steps to ensure that consumer complaints are resolved quickly and fairly and that any redress is provided quickly and easily;

3.1.3 assess the potential risks posed by any party with which they contract in respect of:

(a) the provision of premium rate services, and

(b) the promotion, marketing and content of the premium rate services which they provide or facilitate,

and take and maintain reasonable continuing steps to control those risks;

3.3.1 All Network operators and Level 1 providers must perform thorough due diligence on any party with which they contract in connection with the provision of premium rate services and must retain all relevant documentation obtained during that process for a period that is reasonable in the circumstances

All those to whom these rules apply must ensure that they have such systems in place, or that due diligence is performed on all clients, by 1 September 2011. Guidance on how to comply with these rules (the General Guidance Note on ‘Due diligence and risk assessment and control on clients’) can be found on the PhonepayPlus website.

Transitional arrangements for the investigation of consumer complaints and PhonepayPlus monitoring

PhonepayPlus is informing all those to whom this Notice applies that the following transitional arrangements will apply to the conduct of investigations relating to any facts or matters occurring around the time of commencement of the 12th Code which form the subject of consumer complaints, and/or PhonepayPlus monitoring:

1) Where the facts and matters of a complaint and/or monitoring have occurred prior to 1 September 2011 which give rise to breaches of the 11th Edition of the Code (‘11th Code’), they will be investigated and adjudicated under the relevant definitions, processes and sanctions of the 11th Code

2) Where the facts and matters of complaints and/or monitoring occur both prior to and after 1 September in respect of the same service, then the facts and matters occuring after 1 September will be investigated by PhonepayPlus and adjudicated under the relevant definitions, processes and sanctions of the 12th Edition of the Code, unless PhonepayPlus determines that it is in all the circumstances more appropriate for the facts and matters occuring before 1 September to be investigated, in which case the investigation will continue under the 11th Code. In an appropriate case, PhonepayPlus may decide to investigate breaches of both the 11th Code and 12th Code in relation to facts and matters occuring before and after 1 September respectively. PhonepayPlus will publish, within the Tribunal decision for the relevant case, its reasons for proceeding under either the 12th Code or the 11th Code, or both.

3) Where facts and matters of a complaint have occurred after 1 September 2011, then they will be investigated and adjudicated under the relevant definitions, processes and sanctions of the 12th Code.

Enforcement

PhonepayPlus will continue to monitor premium rate services, and perform other such checks as are necessary, to ensure that the 12th Code is complied with.

400% increase in virtual goods on mobiles, new report shows

Tue, 29 Mar 2011 10:00:00 +0100

Virtual goods include virtual currency to spend in games on social networking sites, ‘virtual gifts’ such as virtual birthday cakes and, more recently, virtual charity badges with a donation going towards the consumer’s good cause of choice.

The Current and Emerging Trends in the UK Premium Rate Services report, published today by the UK premium rate telephone services (PRS) regulator, PhonepayPlus, links the massive growth in virtual goods paid for by PRS to the rise of social networking. The report by Analysys Mason states:

“The rapid rise in the adoption of virtual goods and gifts by consumers suggests that there is value associated with inexpensive virtual objects, particularly when they are gifts to other people. The idea is relatively simple and taps into the core of social networks: the relationships that exist between members… Social networks are the most important players in the virtual gifts markets.”

The link between the rise of virtual goods and social networking is reflected in the report’s statistics:

8.5% of consumers have bought a virtual gift or object related to a social networking site using a phone-paid mechanism
19.4% of 25-34 year olds and 16.5% of 18-24 year olds have bought a virtual gift using PRS in the last six months
97% of PRS users aged 16-17 use social networking sites
The average micropayment per transaction for virtual goods is £2.41

While virtual goods are enjoyed by consumers and present a welcome emerging market for the technology and telecoms industries, consumer confidence in this market is not guaranteed, as PhonepayPlus’ Director of Strategy and Communications, Bradley Brady, explains:

“Virtual goods are undoubtedly fun for consumers and represent a real opportunity for industry to innovate new services and products. However, we cannot be complacent. How services and virtual goods – whether using PRS or other micropayment methods – are promoted on social networking sites is fast-moving and complex and presents challenges to consumers, the regulator and industry. For example, our report shows that out of the very small number of consumers (5.8%) who said they were put off using PRS by bad publicity, most cited virtual goods bought on social networking sites as the cause of this concern.

“We are working with industry to look at sensible guidance for the use of PRS on social networking sites, to make sure consumers are fully protected and that a fun, innovative and emerging market retains consumer confidence.”

Please click here to view the Current and Emerging Trends in the UK Premium Rate Services Market report.

NOTES TO EDITORS

PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk.
This research was primarily conducted between October and December 2010, and comprised an online consumer survey (14,062 respondents aged 11 upwards) and 17 in-depth telephone interviews with industry stakeholders from across the in telecoms value chain. In addition, desk research, data from PhonepayPlus and data from Analysys Mason contributed to the market analysis.
For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

PhonepayPlus publishes 2011/12 business plan and new market report

Tue, 29 Mar 2011 10:00:00 +0100

PhonepayPlus’ annual market report, Current and Emerging Trends in the UK Premium Rate Services Market, shows growth in the PRS market, with revenues in 2010 totalling £816.2 million, a 0.8% increase compared to the 2009. The Business Plan and market report are published in the week that PhonepayPlus launches its new Code of Practice for the PRS industry.

The proposed PhonepayPlus budget for levy-funded activity in 2011/12 is £3,799,743, a real terms decrease of 13.2% on 2010/11. The adjusted industry levy for 2011/12 will be 0.35%, and applies to all outpayments payable by network operators to service providers in respect of revenue generated by premium rate services.

Please click here to view PhonepayPlus’ final statement on its 2011/12 Business Plan & Budget.

Please click here to view the Current and Emerging Trends in the UK Premium Rate Services Market report.

Social networking drives growth as new Code of Practice is published

Tue, 29 Mar 2011 10:00:00 +0100

The market report identifies social networking and the mobile internet as potential growth areas for PRS, with an increase of over 400% in the market for virtual goods bought using PRS on social networking sites, up from £1.5 million in 2009 to £8.1 million in 2010.

The Current and Emerging Trends in the UK Premium Rate Services annual market report is released as PhonepayPlus prepares to publish the new Code of Practice for the PRS industry tomorrow.

The new Code of Practice moves from a rules-based to an outcomes-focused approach to the regulation of the PRS industry. The result of this outcomes-focused approach is a Code of Practice that is flexible and nimble enough to ensure effective regulation of a fast-moving, innovative industry, protecting the PRS market as it develops and helping to sustain and build consumer confidence.

The good news for consumer confidence is that only 3% of phone-paid service users cited “lack of trust of the companies offering these services” as the reason they weren’t interested in using additional types of phone-paid services. A decrease in income and disinterest in the services offered were the most common reasons for consumers not to use more services.

Regulation has also helped consumer confidence and market growth in the 087 number ranges, with 087 revenues up from £78.2 million when regulation began in 2009 to £96.7 million in 2010.

The importance of the new Code of Practice in helping to build consumer confidence is clear in consumers’ attitudes to PRS. The single most important factor that would increase trust in PRS is accurate pricing, cited by almost 74% of PRS users.

Paul Whiteing, PhonepayPlus’ Chief Executive, said:

“Reading through this comprehensive report about the PRS market on the day we publish our new Code of Practice is a welcome reminder of how PhonepayPlus works as a regulator. We can see why effective, smart, integrated regulation that works with industry and not against it matters not just for business but – more than anything – for the consumer.

“The landscape for PRS is changing fast. We need regulation that allows industry to take full advantage of the opportunities that such innovation throws up while always keeping in full view the need to pre-empt and prevent consumer harm.

“I believe our new Code of Practice is exactly what we need in the years ahead to help us and industry meet the challenges and fulfil the opportunities outlined in this annual market report today.”

Please click here to view the Current and Emerging Trends in the UK Premium Rate Services Market report.

NOTES TO EDITORS

PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at www.phonepayplus.org.uk.
This research was primarily conducted between October and December 2010, and comprised an online consumer survey (14,062 respondents aged 11 upwards) and 17 in-depth telephone interviews with industry stakeholders from across the in telecoms value chain. In addition, desk research, data from PhonepayPlus and data from Analysys Mason contributed to the market analysis.
For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

PhonepayPlus Registration Scheme March Update

Thu, 17 Mar 2011 10:12:00 Z

The update aims to answer the majority of questions that stakeholders might have about progress on delivering the Registration Scheme, including when the new Code and Scheme will come into force, which PRS providers need to register and which providers are exempt, and details on the cost and process of registration.

To view the Registration Scheme update, please click here.

To receive further updates on the launch of the new Code of Practice and Registration Scheme, please click here.

Watchdog issues stringent fines and warns consumers to beware of the search engine climbers

Mon, 14 Mar 2011 16:31:00 Z

A number of websites have emerged that offer numbers for information services ranging from government helplines to customer service lines for high street retailers. The numbers provided, however, are premium rate numbers, which cost consumers up to £1.53 a minute, for information that is generally available for free elsewhere. Using search engine marketing (SEM), these websites can climb to a very high position in sponsored links, being amongst the first sites returned when consumers search for specific contact numbers.

PhonepayPlus issued the warning following an adjudication in which two companies, AT Telecom Ltd and Customer Service Helplines (UK) Ltd, were fined £50,000 each for misleading consumers and failing to make the price of calling the premium rate numbers clear to consumers. The full adjudication is published today on the PhonepayPlus website.

Paul Whiteing, Chief Executive of PhonepayPlus said:

“These fines show that we are serious about clamping down on such websites that can mislead consumers. We are aware that the people behind such sites have become adept at using SEM to push these sites to the top of the pile when a consumer uses search engines to find numbers. We have already worked with Directgov to forward a number of sites to Google and Bing when these sites use premium rate numbers for information available for free from the government, and we continue to look for ways to work with search engine providers to stop activity that causes consumer harm.

“Before calling any number, consumers should look carefully at the numbers that any websites provide and remember that premium rate numbers generally begin with 09 prefix.”

CONSUMER ADVICE

Consumers looking for contact numbers online should take these three easy steps to protect themselves:

1. Know the URL – check the URL of the site offering numbers? Does it look plausible? If you are looking for government information, government websites should end in .gov.uk. If the website offering numbers has a different URL, check again and see if the information is available for free on a government website. If you are looking for information in relation to a retailer’s or other’s customer service line, does the URL correspond with the main URL for the company you want to contact?

2. Know your numbers – does the number begin with 09? If so, this is a premium rate number.

3. Know what it costs – if there is small print on the website, read it very carefully and understand exactly how much you will be charged and for what before you dial.

NOTES TO EDITORS

1.     PhonepayPlus is the organisation (previously known as ICSTIS) that regulates phone-paid services - the goods and services that you can buy by charging the cost to your phone bills and mobile pre-pay accounts. Further details of its work can be found at www.phonepayplus.org.uk.
2.     Ofcom has responsibility and accountability for the regulation of premium rate services under the terms of the Communications Act 2003. However, Ofcom has appointed PhonepayPlus to deliver the day-to-day regulation of the market, granting it formal powers to protect consumers on its behalf by approving its Code of Practice
3.     For more information, contact the PhonepayPlus Press Office on (020) 7940 7440 or email pressoffice@phonepayplus.org.uk

PhonepayPlus responds to Ofcom’s ‘Simplifying Non-Geographic Numbers’ consultation

Mon, 14 Mar 2011 10:00:00 Z

PhonepayPlus’ response focuses on those areas that directly impact its work, including options for improving pricing transparency, potential regulatory safeguards for higher rate fixed-line tariffs and an appropriate regulatory regime for lower-cost services, should they come under PhonepayPlus regulation.

Please click here to view PhonepayPlus’ response to the ‘Simplifying Non-Geographic Numbers’ consultation.

Ground-breaking education programme targets mobile entrepreneurs in youth clubs

Fri, 11 Mar 2011 10:03:00 Z

Running for the past two years in UK schools, the PhoneBrain programme was put together by PhonepayPlus, the UK national regulator for premium rate telephone services (PRS), with input from the PRS industry and teachers. PhoneBrain helps young people to understand and use PRS, particularly on their mobiles, safely and wisely, identifying what responsible, compliant services look like and what to be aware of when accessing services. In two years, PhoneBrain has reached 20% of schools nationwide with thousands of students taking part. In 2011, the programme aims to break new ground with ambitious plans to expand.

In 2011, PhonepayPlus is joining forces with the young social entrepreneurship support organisation, Live UnLtd, to offer a number of funding awards together with mentoring to help the best business ideas that have social and community benefits to get up and running. For the first time, the programme is also being rolled out to youth clubs throughout the UK via the Clubs for Young People network.

The PRS market in the UK is worth £810 million annually and is an area ripe for business and social entrepreneurship. Recent innovations such as charity text donations are breaking new ground and opening up models that benefit both business and the community.

Paul Whiteing, Chief Executive of PhonepayPlus, said:

“We’re really pleased to be working with Clubs for Young People and Live UnLtd for the first time and feel that their involvement clearly focuses the objective of this year’s programme – showing how technology, a topic young people are passionate about, can be used for good community and business ends. The message from the regulator and from the PRS industry in general is that ‘Responsible business is good business’ and we look forward to judging the entries to the entrepreneurship challenge.”

Helen Marshall, Chief Operating Officer at Clubs for Young People, praised the expansion of the project to thousands of more young people via youth clubs across the country:

“Clubs for Young People is proud to be a part of PhoneBrain 2011 and to be launching the programme in one of our flagship youth centres – the Green Towers Hinckley Club 4 Young People in Leicestershire. PhoneBrain reached 850 secondary schools last year and Clubs for Young People is excited to be involved in delivering the programme to the 3,000 youth clubs and projects in our network – reaching thousands more young people.”

Backing the combination of social entrepreneurship and new technology, Josie Emberton, Head of Live UnLtd, said:

“Live UnLtd are pleased to be working alongside this year’s PhoneBrain initiative. Live UnLtd believes passionately that young people hold the answers to many of the social issues facing the UK and we provide the funding and support needed to put their ideas into action. We're always looking for new ways of encouraging young people to change the world around them for the better and PhoneBrain is a great way of showing how young people can use mobile technology to create something completely new and different that also has a wider community or social benefit.”

Notes to editors:

Additionally, teens that have an interest in ICT (Information and Communication Technology) can create their own, personalised mobile ringtone using imagery provided by Habbo, the virtual world and social networking site for teens, and music provided by independent music label Moshi Moshi Records. The finished ringtones can then be uploaded to the PhoneBrain website to be judged for the chance to win tickets to see the X Factor live – courtesy of ITV.
For more information on the PhoneBrain project and how you can get involved, visit ww.phonebrain.org.uk, or call the PhonepayPlus Press Office on 020 7940 7440.
The winners of the PhoneBrain ICT and Enterprise challenges will be announced in late June/early July.
PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate (or phone-paid) services – the goods and services that you can buy by charging the cost to your phone bills and mobile pre-pay accounts. Further details of its work can be found at www.phonepayplus.org.uk.
Live UnLtd is a support organisation coordinated by UnLtd, the world’s largest network of support for social entrepreneurs. Led by a team of passionate young people, Live UnLtd provides funding awards of up to £5,000 to young people aged 11-21 who have an idea which could make a positive impact on the world around them. For further information on Live UnLtd visit www.liveunltd.com

Complaints fall by 75% but mobile generation still vulnerable, says regulator

Fri, 11 Mar 2011 09:59:00 Z

These latest figures are announced as PhonepayPlus’ launches its award-winning youth education programme, PhoneBrain 2011. Running for the past two years in UK schools, the PhoneBrain programme was put together by PhonepayPlus, the UK national regulator for premium rate telephone services (PRS), with input from the PRS industry and teachers. PhoneBrain helps young people to understand and use PRS, particularly on their mobiles, safely and wisely, identifying what responsible, compliant services look like and what to be aware of when accessing services. In two years, PhoneBrain has reached 20% of schools nationwide with thousands of students taking part. In 2011, the programme aims to break new ground with ambitious plans to expand.

This year’s programme will encourage potential young business leaders in low-income areas to come up with business models that use mobiles for the benefit of the local community. In 2011, PhonepayPlus is joining forces with the young social entrepreneurship support organisation, Live UnLtd, to offer a number of funding awards together with mentoring to help the best business ideas that have social and community benefits to get up and running. For the first time, the programme is also being rolled out to youth clubs throughout the UK via the Clubs for Young People network.

Paul Whiteing, Chief Executive of PhonepayPlus, said:

“We’re really pleased to be working with Clubs for Young People and Live UnLtd for the first time and feel that their involvement clearly focuses the objective of this year’s programme – showing how technology, a topic young people are passionate about, can be used for good community and business ends. The message from the regulator and from the PRS industry in general is that ‘Responsible business is good business’ and we look forward to judging the entries to the entrepreneurship challenge.”

Helen Marshall, Chief Operating Officer at Clubs for Young People, praised the expansion of the project to thousands of more young people via youth clubs across the country:

“Clubs for Young People is proud to be a part of PhoneBrain 2011 and to be launching the programme in one of our flagship youth centres – the Green Towers Hinckley Club 4 Young People in Leicestershire. PhoneBrain reached 850 secondary schools last year and Clubs for Young People is excited to be involved in delivering the programme to the 3,000 youth clubs and projects in our network – reaching thousands more young people.”

Backing the combination of social entrepreneurship and new technology, Josie Emberton, Head of Live UnLtd, said:

“Live UnLtd are pleased to be working alongside this year’s PhoneBrain initiative. Live UnLtd believes passionately that young people hold the answers to many of the social issues facing the UK and we provide the funding and support needed to put their ideas into action. We're always looking for new ways of encouraging young people to change the world around them for the better and PhoneBrain is a great way of showing how young people can use mobile technology to create something completely new and different that also has a wider community or social benefit.”

Notes to editors:

Additionally, teens that have an interest in ICT (Information and Communication Technology) can create their own, personalised mobile ringtone using imagery provided by Habbo, the virtual world and social networking site for teens, and music provided by independent music label Moshi Moshi Records. The finished ringtones can then be uploaded to the PhoneBrain website to be judged for the chance to win tickets to see the X Factor live – courtesy of ITV.
For more information on the PhoneBrain project and how you can get involved, visit www.phonebrain.org.uk, or call the PhonepayPlus Press Office on 020 7940 7440.
The winners of the PhoneBrain ICT and Enterprise challenges will be announced in late June/early July.
PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate (or phone-paid) services – the goods and services that you can buy by charging the cost to your phone bills and mobile pre-pay accounts. Further details of its work can be found at www.phonepayplus.org.uk.
Live UnLtd is a support organisation coordinated by UnLtd, the world’s largest network of support for social entrepreneurs. Led by a team of passionate young people, Live UnLtd provides funding awards of up to £5,000 to young people aged 11-21 who have an idea which could make a positive impact on the world around them. For further information on Live UnLtd visit www.liveunltd.com

PhonepayPlus sanctions review – a presentation from the Chief Executive

Wed, 09 Mar 2011 16:00:00 Z

Paul Whiteing, Chief Executive of PhonepayPlus, and David Cockburn, Chairman of the Code Compliance Panel, gave a presentation about these changes to the Association for Interactive Media & Entertainment (AIME) at its General Meeting on 9 March in London.

Please click here to view a copy of the presentation slides, which highlight the key changes that will be published imminently along with the new Code of Practice.

Personnel	Hourly Charge (£) 2011/12
Administrator	71
Investigations Executive	84
Head of Investigations	139
Head of Industry Support	127
Director of Strategy & Communications	239
Chief Executive	337
Head of Legal	165
In-house Lawyer	106

Per Adjudication Case	1,467
Oral hearing - per half day	3,060
Emergency procedure decision	240
Application to review an adjudication	320
Secondary case charges (per case)	20
Informal representations (per half hour)	165
NB All charges are exclusive of VAT