These frequently asked questions are designed to give industry members a summary of the key changes and what you need to do to prepare. Links to more detailed information and related documents are at the bottom of this page.
What is the Code of Practice?
The Code of Practice is used by the Phone-paid Services Authority to regulate phone-paid services. This means anything beyond standard-rate phone calls or text messages that are charged to consumers’ communications bills or deducted from pre-paid mobile credit. There are a broad range of services that use phone-paid services as a payment mechanism, including TV voting, chatlines, gambling services and charity donations by text message. The Code of Practice sets out rules for providers of phone-paid services, including pricing, advertising and promotions with the aim that compliance with the Code will mean consumers can use PRS with confidence in a healthy and innovate market.
The main changes to the new Code relate to Part Four and specifically the investigations, adjudications and appeals procedures, which support a more streamlined and less complex process. Key changes include:
- Creation of a Code Adjudication Panel, which removes the Phone-paid Services Authority board members from adjudicatory decisions
- The Code provides more transparency on the factors the Phone-paid Services Authority consider when allocating a case to an investigations track
- Interim measures may be imposed at an early stage of an investigation, but only if approved by a Tribunal
- Provision for senior oversight of certain key stages of investigation work, before cases are put before a Tribunal
- Replacing breach letters with Warning Notices, which give providers an opportunity both to respond to alleged Code breaches, and to confirm whether they agree with the recommended sanctions
- Replacement of the previous post-adjudication appeals stages with a single limited review procedure
Further details on the changes, including a copy of the new Code and new Supporting Procedures, can be found here
. A summary of our investigation and enforcement process can also be found here
. An FAQ which explains what happens if you receive a Warning Notice can be found on this page below.
Who does it apply to?
Anyone involved in providing phone-paid services. In practice, this is most likely to mean terminating Network operators, providers who have an interconnect with a Network operator or who operate a technical platform which facilitates PRS or those who act as merchants, controlling the promotion and sale of content. However, in the event of evidence of consumer harm occurring, we will look at each party’s role in providing a service so that responsibility can be appropriately apportioned and the right party (or parties) investigated.
What is the outcomes-based approach to regulation as established in the previous Code (12th edition)?
The outcomes-based approach to regulations is designed to frame the key obligations placed on businesses within key outcomes. They are:
- Transparency and pricing;
- Avoidance of harm;
- Complaint handling.
There are a range of benefits to framing regulations in this way. It makes understanding the key expectations of consumers easy, highlighting the purpose behind individual rules set out in the Code. It also clarifies what compliance is aiming to achieve, for example, by presenting written pricing information in a legible way providers comply with rule 2.2.7, but they also achieve a higher standard of transparency relating to this key information.
It also has the effect of establishing better measurements for assessing compliance with the Code. For example, the means to provide consent for charges to be initiated may be technically in place and functioning normally, but rule 2.3.3 sits within the outcome of fairness – therefore, where the charges are levied in a way which fails to treat the consumer fairly and equitably, the service may still not be compliant with the Code. By assessing fair and equitable treatment flowing out of the user experience both the provider and the regulator can test whether the charging mechanic is fit for purpose.
Finally, consumers benefit greatly from this approach as the outcomes are focussed on them getting high quality products and services, a strong payment mechanism, clarity in the terms of the transaction and increased confidence in their ability to get help when things go wrong. Compliance with the outcomes-based regulations put in place by the Phone-paid Services Authority will assist businesses to give consumers what they want, increasing confidence in a healthy, innovative market.
What are 'Special conditions' associated with the Code?
‘Special conditions’ is the name given to a new type of provision of the Code which may be imposed for high risk services where it is judged that the standard Code provisions would not provide sufficient protection to consumers. These are being introduced where they are considered necessary, based on new developments in the market leading to higher risks associated with a specified category of service.
Paragraph 3.11 of the Code sets out the power to impose such provisions, with sub-paragraph 3.11.5 making it clear that once these provisions are introduced, they will be enforced as a provision of the Code in the same way as the Phone-paid Services Authority enforces other rules and obligations found in Parts 2, 3 and 4 of the Code.
Following consultation, a number of Special conditions which carry over protections from Code 12’s prior permissions arrangements are being put in place now. Any future Special conditions requirements will be subject to full consultation before they are introduced. Special conditions can only be established in conjunction with the matters listed in the Code Annex 2. New provisions will be published in Notices, made available on our website.
[Spending/Purchase] Caps are not set out in the Code, so where do I find the actions and thresholds that can be imposed under paragraph 3.12 of the Code?
Paragraph 3.12 of the Code replaces the various individual [spending/purchase] caps and actions that providers needed to comply with under Code 12. We will publish a Notice listing all relevant actions and thresholds on its website.
Any caps or other actions deemed required, such as requirements to provide consumers with a reminder of charges incurred, would be introduced following full consultation in accordance with paragraph 3.12 of the Code.
What are the penalties for breaching the Code?
The Code provides the Phone-paid Services Authority’s independent Tribunal – which adjudicates on any alleged breaches of the Code – with a range of sanctions.The sanctions will be less or more serious depending on the nature and seriousness of the harm and/or detriment caused to consumers, but the most serious harm can attract a fine of £250,000 for each breach upheld. Furthermore, the Phone-paid Services Authority has the power to block certain service types or in certain circumstances to prohibit providers and individuals from operating PRS.
It is important to note though that where providers have unwittingly caused consumer harm and acted responsibly in redressing any issues or where the consumer harm is not significant, the Phone-paid Services Authority will look to resolve matters informally with the provider(s) concerned.
As a provider, what should I consider when developing a phone-paid service?
The Phone-paid Services Authority regulates a whole range of services where the providers have chosen to use phone-paid services facilities to allow consumers to pay for those services directly through their phone account. Having decided to offer this payment method to consumers, providers should ensure they understand the obligations of the Phone-paid Services Authority Code of Practice and register with us. There is more information on registration further down this page.
Providers need to consider the type of service that they are operating and register those services as well as the organisation itself. Some services are considered higher risk and there are Special conditions that apply to reduce any potential risks. Providers should consider any particular Notices of Special conditions that may apply to their services. Any such Notices will be published on our website.
What is “due diligence, risk assessment and control”?
The Phone-paid Services Authority has produced specific guidance on this topic. We recognise it is an important obligation found in Part 3 of the Code of Practice and that industry are keen to support the regulation of the market through establishing strong due diligence, risk assessment and control procedures.
The key thing to remember is that this is a process which involves various steps, including:
- Know your client
- Properly identify the risks
- Taking action to control the risks
- Responding to incidents
It is important to have a clear understanding of this process and to take a consistent approach.
As the final step indicates, things can and do go wrong regardless of the risk assessment and planning put in place to identify what might happen. However, having effective procedures and well trained personnel to undertake these activities will help businesses respond calmly, proactively and effectively. Having identified the risks and created an action plan to reduce the likelihood of incidents occurring, providers ought to be ready to act in response when things do go wrong. This will reduce the impact on consumers and has the potential to raise confidence regardless of the incident itself.
Who needs to register?
Anyone involved in providing phone-paid services [directly] to consumers at any point in a value-chain. The Code requires all Network Operators, Level 1 and Level 2 providers to register. In practice, this means terminating Network operators, providers who have an interconnect with a Network operator or who operate a technical platform which facilitates PRS or those who act as merchants, controlling the promotion and sale of content. You are not required to register if you have been subcontracted to solely provide content (i.e. the provider does not sell it themselves), affiliate marketing or some kind of technical service beyond the platform to provide PRS.
We will publish from time to time details of any exemptions to the requirement to register.
Anyone who isn’t sure whether they should register should contact the Compliance Team at (email@example.com
) for further advice.
What do I need to register?
Any Network operator, organisation or provider involved in delivering a PRS to consumers needs to register their details, including information about their business and their responsible persons such as Directors or Trustees.
We also require that individual services are registered with us by the party responsible for customer service. This information will feed the #NumberChecker
service that allows consumers to get in touch with the relevant providers for each PRS, so it is important this is accurate and kept up-to-date. There is no charge for registering services, but they must be linked to a registered organisation or provider.
What is the Number Checker?
service is the Phone-paid Services Authority’s online database for people to check the details of a PRS. Type in a PRS number and it will show the information the Phone-paid Services Authority holds on the service’s type, price and contact details for the company that runs it.
How do I register?
is available through the Phone-paid Services Authority’s website and is a simple process.
What does it mean to register – will I have to abide by any further rules once registered?
Yes, you will need to abide by the Phone-paid Services Authority Code of Practice. The Code requires those involved in running PRS to:
- Achieve positive consumer outcomes if you are responsible for the content, operation and promotion of services;
- Perform due diligence, and an appropriate degree of risk assessment and control, on other registered parties with whom you contract.
How much will registration cost me?
There is a charge for registration, which cover the costs of maintaining the database. The fee is currently set at £155 + VAT per registering Network operator or provider.
While there is a charge for registering your company, there isn’t any charge for registering your services, no matter how many you have.
You don’t have to pay the registration fee if:
- you’re a charity registered with the Charity Commission for England and Wales or the equivalent in Northern Ireland or Scotland; or
- it's your first year of registration and your projected annual gross outpayment is less than £10,000 per year.
Where do I go if I need more information?
Enquiries can be directed in the first instance to the Compliance Team at firstname.lastname@example.org
Why was I sent a 'Warning Notice'?
This is a formal notification that the Phone-paid Services Authority Executive (“the Executive”) has conducted a formal (“Track 2”) investigation into one or more of your services or with regard to your general responsibilities under the Code of Practice, (“the Code”). This is sent because there are grounds to believe that the service (including its content, promotion, marketing and technical matters) may be in breach of one or a number of the rules and outcomes in Part 2 of the Code, or an organisation may have failed to comply with its general responsibilities under Part 3 or Part 4 of the Code.
What happens if a PRS provider ignores a ‘warning notice’?
The Phone-paid Services AuthoritypayPlus doesn’t recommend this response from a PRS provider as it is not in their best interests.
The consequences could be very serious. In due course, a case will be presented to an Adjudication Tribunal (“the Tribunal”), made up of members of the Code Adjudication Panel (“the CAP”). The decision making process is independent of the Phone-paid Services Authority. The Tribunal will decide, on the basis of the arguments and evidence submitted by both the Executive and the responding organisation whether the Code has been breached. If the Tribunal decides that it has, it will also determine which sanctions, if any, to impose on the organisation.
A Tribunal could fine an organisation – with fines possible up to £250k per breach – and require you to pay refunds. You may also be required to pay an administration charge, which may total several thousand pounds. The Warning Notice sent out contains details specific to the case that is underway, including details of any potential fine levels, so check the letter and consider the severity of the matter based on its contents.
If a PRS provider does not respond to the Executive, the provider’s explanation of events cannot be included within the papers put to the Tribunal. The case will therefore proceed without that input that this opportunity presents to the responding organisation.
What should a PRS provider do on receipt of a ‘warning notice’?
A provider should write back in response to the Executive by deadline set in the letter. If it disputes that the Code has been breached, it must give as much evidence as possible regarding each of the alleged breaches that the Executive has raised. The provider should supply this evidence within the specified section(s) of the document. The responses included in those sections will be copied into a case report, which is compiled for the Tribunal. Please note that only information which provider’s write in those sections will be presented in the case report itself.
All other information provided outside of those sections will be included in an annex to the report. Responding parties may want to include copies of relevant letters or email exchanges with other people, or you may want to provide copies of other documents such as the promotional material for the service. The evidence included within a response to a “warning notice” is up to the responding party, but it should be relevant to the alleged breaches themselves.
If, after assessing the position, a provider accepts that some breaches may have occurred, that can be stated in the response. Providers should also respond to the Aggravating and Mitigating Factors section of the Warning Notice and state whether there is anything the Tribunal should take into account to deal with the matter appropriately, for example, that the problem occurred without your knowledge, or that you have already remedied the potential breaches. Lastly, a provider should indicate whether or not it agrees with the proposed sanctions, and if not, why not.
In a response to the “warning notice”, the provider should also indicate whether it prefers to have a paper hearing (and whether it wishes to make oral representations as part of the paper hearing process) or a formal oral hearing.
Providers can seek further assistance by contacting the Investigations Executive as soon as possible after receiving the letter. They will be happy to explain the process in more detail.
What if a PRS provider is likely to miss the deadline set in the letter?
Providers should immediately contact the member of the Executive who sent out the letter. It is a requirement under paragraph 4.5.4 . of the Code that a response is received within ten working days and only in exceptional circumstances will an extension be granted, (which will be no longer than ten further working days).
A provider seeking an extension must supply sufficient details and supporting evidence of the exceptional circumstances when requesting an extension. Delays caused by a party’s own failure to act promptly (for instance, in seeking information or professional advice), or unavailability of a particular individual during a response period, will not ordinarily justify an extension. To justify an extension, the circumstances should be such that, due to circumstances beyond the reasonable control of the parties, a provider cannot have been expected to respond before the original deadline.
Don’t just ignore the deadline. If a provider doesn’t reply and doesn’t let the Executive know more time is needed, the Executive will assume that the provider doesn’t want to submit any response or evidence. The case will then be submitted to an Adjudication Tribunal without further input from the provider. That can be avoided by communicating clearly with the Executive.
Can sanctions be agreed without requiring a hearing?
In a response to a “warning notice”, providers can accept the breaches and recommended sanctions. The advantages of doing so are likely to include an earlier resolution and avoidance of additional administrative costs relating to contested hearings.
Alternatively, a provider may make representations that different sanctions are appropriate. Where a responding party makes representations that different breaches and/or sanctions are appropriate, the Investigations Team may respond to any representations made, and ask further questions if appropriate. We may then agree to a reasonable settlement proposal that is put forward, but only if the proposals are sufficient to address our concerns, and secure a satisfactory regulatory outcome.
If providers wish to make settlement proposals, they are encouraged do so at an early stage, prior to papers being sent to the Tribunal, and on a well-reasoned basis. Where settlement discussions take place over a period of time, we will require its increased administrative and legal costs to be paid as a condition of any settlement.
Where we reach agreement on the breaches to be upheld and sanctions and administrative charges to be imposed, we will place the details of the matter and the agreement reached before Tribunal for approval, in a paper-based administrative process.
Where providers do not reach full agreement with us on each breach and the appropriate sanctions, the entirety of the breaches alleged in the Warning Notice and sanctions recommended will be put to the Tribunal for adjudication. If they uphold breaches of the Code, the Tribunal is not bound by the recommendations and may choose to impose different sanctions, or sanctions at a higher or lower level than those recommended in the Warning Notice.
What if a PRS provider wants to present evidence in person?
It is very important that providers give a clear written response to the “warning notice”. But they can also ask to appear in person before the Tribunal – this is called an Oral Representation. Responding parties can either contact the member of the Executive who sent out the letter to request this, or they can include a request to make an Oral Representation in its written response. The Executive will then let the provider know when the case is scheduled to be heard and what time attendance is required. Tribunals are held on Thursday (on a fortnightly basis at Phonepaid Services Authority’s office). Oral Representations are heard by a Tribunal immediately before it makes its decision on the alleged breaches and any appropriate sanctions required.
What is an oral representation?
It is a chance to clarify the facts of the case that you have submitted within the papers to the Tribunal in person and in an informal setting. As such, the Tribunal will not allow any lawyers to make legal representations on your behalf as it will not be considering any legal arguments at this time. Apart from being a chance for you to clarify your case to the Tribunal, it is also the Tribunal’s opportunity to explore and ask questions to gain a fuller understanding of the issues involved.
Tribunals often find it most helpful to be able to clarify matters with the people who were actually involved in the operation of the service, so you should consider this when deciding who you want to attend to make informal representations on behalf of your organisation. Any questions from the Tribunal will usually be asked in the presence of the Investigations Executive. The Tribunal may also have questions to ask the Investigations Executive to seek clarification of the Executive’s case, and should a party choose to attend to make Oral Representations, such questioning will usually take place in the presence of the person making Oral Representations.
Please note that as an Oral Representation is primarily intended to clarify the facts that you have submitted within the papers to the Tribunal, new evidence or submissions are not usually permitted to be put forward at this stage.
In addition to this, should your Oral Representation contain a visual presentation that you wish to display at the hearing then it is recommended that you submit this to the Executive prior to the hearing taking place so that it can ensure that it displays correctly on its audio visual system.
The Oral Representation will not normally exceed 30 minutes. Where the relevant party requires a longer period, the request should be made in writing, setting out the reasons for the extension sought. This request will then be put to the Chair of the Tribunal for consideration.
Oral representations and date setting
If dates of unavailability are provided, they will be taken into account so far as is possible when a date and time is appointed for the hearing. However, providers should ensure that they or a representative are generally available in the period 4 - 7 weeks from the date of this letter, as we cannot guarantee that the hearing will be listed on any given date.
If you wish to make Oral Representations but no suitable representative is able to attend in this period, you should inform the Phone-paid Services Authority as soon as possible.
Tribunal hearings will not normally be adjourned. Any application for an adjournment of the hearing should be made in writing as soon as possible and in any event by no later than two weeks prior to the date that the Tribunal is scheduled to consider the case. Any such application must set out the specific grounds on which the adjournment application is being made and must include any relevant evidence to support the reason why it is said the hearing should be adjourned. (for example, evidence of an emergency which has arisen such as an emergency medical appointment for the sole representative of the relevant party). In addition, the adjournment application must include confirmation of any times and dates when no representative would be able to attend the hearing on your behalf. in the next five weeks
Is an oral representation the only way a case can be put in person?
No. The Code gives responding parties the right to an “Oral Hearing” instead of a standard Tribunal.
In an Oral Hearing providers can present their own case in person or, if considered necessary, they can appoint a legal representative to present the case. Providers can request an Oral Hearing at any stage after receipt of a “warning notice”, although we recommend that such a request is done as soon as possible.
What is an Oral Hearing?
This is a formal forum in which both parties appear in person.
The Executive can raise new breaches of the Code in addition to those it raised in the original case, or choose to withdraw breaches of the Code originally raised. Both sides may submit further evidence.
There is a pre-hearing process in which the Chairman will give such directions as he considers necessary for the fair and speedy hearing of the oral hearing. Such directions may include, for example, directions for:
• the exchange of statements of case,
• the admission of facts before the hearing,
• the disclosure of documents,
• the provision of expert reports,
• the exchange of witness statements,
• the preparation of agreed bundles of documents,
• the submission and exchange of outline arguments,
• the provision of security for the administrative charges of the Phone-paid Services Authority.
At the hearing, evidence will be presented by both parties. Witnesses in person (which may include your personnel) may be cross-examined.
Once a decision is made following an Oral Hearing, you will receive a copy of the Oral Hearing Tribunal’s decision.
If the Tribunal decides that the breach(es) have occurred, you may be liable for the administrative and legal costs incurred in the oral hearing process. Given the nature of the Oral Hearing process, these are likely to be substantially more than for a standard Tribunal.
Please note that an Oral Hearing is an alternative to the standard form of Tribunal, and cannot be requested as a form of appeal after a Tribunal has already adjudicated.
What happens after a response to the Warning Notice is sent to the regulator?
Whether or not a provider requests the chance to make representations before the Tribunal, the Executive will submit a report of its investigation to the Tribunal, which will include the “warning notice” and all the material the responding party has provided.
What happens at the Tribunal hearing?
The Tribunal will decide whether any breaches of the Code have occurred and, if the Tribunal decides that breaches have occurred, it will also determine which sanctions to impose on your organisation, setting these decisions out in its adjudication. The Executive will send you the Tribunal’s decision 13 days after the hearing of your case, together with a covering letter. This letter will also advise you of our administrative charge (if imposed) that you must pay in addition to any sanctions the Tribunal may have imposed.
What sanctions can the Tribunal impose?
These are listed in paragraph 4.8.3 of the Code.
How can a PRS provider appeal if it disagrees with an adjudication?
In some circumstances, providers can request a Review of the Tribunal’s decision on the breach(es) it upheld and/or the sanction(s) it imposed.
If you want a Review of the Tribunal’s decision, the application must demonstrate one or a combination of the following factors:
(i) the relevant decision was based on a material error of fact; or
(ii) the relevant decision was wrong in law; or
(iii) the Tribunal reached its decision having failed to properly observe any relevant decision-making procedure set out in the Code and/or Procedures published by the Phone-paid Services Authority from time to time; or
(iv) the Tribunal came to a decision that no reasonable Tribunal could have reached.
If you wish your case to be reviewed, you will need to complete an application form which can be obtained from the Executive, so you can set out your request for a Review in writing
An application for a Review must normally be made within 10 working days of the publication of the original Tribunal’s decision. You may be able to request a Review at a later date if new information comes to light that was not reasonably available at the time of the original determination, but only in highly exceptional circumstances will an application be accepted after more than 30 days.
After receipt of your application, the CAP Chair (or other legally qualified CAP member) will decide whether the Review request is merited and, if so, will grant the request and instruct the Executive to immediately proceed with submitting the case to the nearest available Tribunal hearing for a Review.
The Review Tribunal will look at the material you provided to the Executive in your Review application, The Review Tribunal will not re-examine evidence which was considered by the original Tribunal, unless it is relevant to the grounds for Review. The Review Tribunal will then decide, on the basis of all the evidence submitted, whether to confirm or vary the original findings on the breaches or the sanctions imposed. It may decide to uphold fewer or more of the breaches raised by the Executive, and may increase or reduce the sanctions originally imposed.
Separately, you can also request a review of any administrative charges that have been invoiced to your organisation as a result of the Tribunal hearing.
Is there any charge for adjudications and further hearings?
If your organisation is not found to have breached any provisions of the Code, there is no charge at all and any monies already paid to the Phone-paid Services Authority will be refunded.
If the Tribunal decides that a breach has occurred, an administrative charge will usually be imposed to cover legal and other costs incurred by the Phone-paid Services Authority in dealing with the case. The amount of the administrative charge to be imposed will depend on the stage the case has reached in the adjudication process. The administrative (and other) charges can be imposed after any of the following:
• Oral Hearings
For Oral Hearings and Reviews, you will be advised (prior to the commencement of the Hearing) of the type of charges applicable for the case and you will be required to confirm in writing that you understand the type of charges that would apply.
There is also a fixed charge applicable for an Informal Representation. For more information please refer to the Administrative charge information sheet or see this page
What is an administrative charge?
This follows the “polluter pays” principle to recoup the costs of investigation and any subsequent work created by dealing with requests for further hearings. An administrative charge is not levied if none of the breaches are upheld and there is a sliding scale depending on the amount of work carried out by the Phone-paid Services Authority, as well as the number of complaints received in relation to the case.
Is there anybody else I can contact?
If, after contacting PhonepayPlus, you wish to seek assistance from another organisation, the following trade associations may be able to assist you:
• Association for Interactive Media & Entertainment
• Mobile Ecosystem Forum