ICSS thematic review

Rationale

ICSS are the most complained about phone-paid service. In the last financial year, PSA received 451 complaints from consumers about ICSS, out of a total of 2,025 received. While the number of complaints received by PSA about all phone-paid services has dropped significantly in recent years, ICSS complaints have remained stubbornly high.

We are concerned that there continues to be widespread consumer detriment and confusion in the market. PSA introduced new rules in the form of Special conditions in 2019 to ensure ICSS were marketed accurately, entirely clear that they were a third-party service and transparent about the costs involved. Despite this, data provided to us by parties under investigation suggests that the consumer experience of ICSS can still be poor and there may still be persistent consumer confusion. Significant numbers of callers in such instances either choose not to proceed with a call after hearing an IVR or are cut off mid call and often redial.

We believe ICSS may be the cause of disproportionate levels of consumer harm. The Annual Market Review (AMR), conducted for PSA by Analysys Mason, estimates that ICSS account for less than 5% of consumer spend in the phone-paid services market. Despite this, over 20% of the complaints received by PSA from consumers relate to ICSS. Analysis of our complaints suggests that the average financial detriment suffered by complainants is £88.

ICSS have featured prominently in our enforcement activity. In the last two financial years, 19 of the 44 cases allocated by PSA to enforcement activity have involved ICSS (excluding breach of sanctions and prohibition cases, i.e. secondary enforcement activities). This also suggests that non-compliance remains a major market issue.

Review scope

We are seeking to better understand the consumer experience and detriment in relation to ICSS and levels of non-compliance by providers in the market to assess whether further regulatory action is necessary.

In order to do this, we are seeking to:

• accurately size the ICSS market in terms of revenue and consumer engagement
• understand the consumer experience of services, including (but not limited to) user numbers, what organisations consumers are being connected to (or seeking to be connected to), the cost of calls and call duration and the information that is provided to consumers when engaging with these services
• assess complaints in the market.

As part of this, we will be seeking revenue, transactional, marketing, complaint and client list data from relevant parties. We consider relevant parties to be any market participant involved the provision of ICSS, whether merchant, intermediary or network.

Timings

Relevant parties will be contacted as part of this review in the coming weeks. Where we require information or data from providers, we will set out the reasoning for this, the Code basis for the request and the deadline for any submission. Failure to comply with a request may result in regulatory action.

We aim to publish summary findings, detailing any recommendations for regulatory actions should they be necessary, later in the calendar year.

Notes

1. What are thematic reviews?
A thematic review is a compliance monitoring activity, carried out  using compliance methods set out in the Code, to explore potential issues regarding compliance with the Code or consumer harm in the wider PRS market or sectors (as opposed to issues related to a particular provider or service). Thematic reviews are detailed at Sections 4.2 and 4.3 in the Code of Practice and from paragraph 95 to 98 of the Procedures.

2. What are ICSS?
Information, Connection and Sign-posting Services (ICSS) are third party services that connect consumers to other organisations contact or customer service number, which are often well-known. ICSS generally operate on non-geographic number ranges, be that 09, 087 or 084.

3. Regulatory action to date
PSA and Ofcom have introduced a range of regulatory policy and enforcement actions in relation to ICSS in recent years. In 2019, Ofcom broadened the scope of Controlled Premium Rate Services Condition to include all ICSS regardless of the number range they are operated on.

PSA introduced new Special conditions for ICSS in 2019, which strengthened the rules for such services. These rules were incorporated into the Code with the introduction of the latest version of the Code of Practice (15^th), which came into effect in April 2022.

In the last five financial years, the PSA Code Adjudication Panel has adjudicated against 8 ICSS providers, levying fines of £3.23m in total.

4. Relevant research
PSA has commissioned consumer research into ICSS in the past. In 2018, PSA published research conducted by the University of Nottingham into consumer behaviour and ICSS, which looked at how consumers responded to ICSS.

In 2012, PSA published quantitative and qualitative research from Jigsaw into consumer views of ICSS.

PSA’s Annual Market Review also contains quantitative analysis of consumer engagement with and attitudes towards all phone-paid services, including ICSS. The latest iteration of the AMR will be published in August of this year.

All research is available here.

5. Enquiries about the review should be directed to supervision@psauthority.org.uk.