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APPLICATION FOR AN EXEMPTION FROM PARAGRAPH 7.12.5 OF THE PHONEPAYPLUS CODE OF PRACTICE IN RELATION TO CHARTIABLE DONATIONS USING A MONTHLY SUBSCRIPTION MECHANIC

(11th EDITION, AMENDED APRIL 2008)

The Applicant applied for an exemption (under Code paragraphs 5.1.2a) of paragraph 7.12.5 of the Code in respect of a subscription-based charitable donation service.

Paragraph 5.1.2a allows organisations to apply for written prior permission from PhonepayPlus (which may be given subject to conditions for a particular service) to be provided by means other than strict adherence to the Code provisions. Such permission may be withdrawn or varied by PhonepayPlus subject to the giving of reasonable advice.

In this case, the Applicant applied for an exemption from strict adherence to Code provision 7.12.5, for a trial period of six months, varying the subscription mechanic by incorporating the use of a ‘SKIP’ function. This variation was designed to enable consumers to temporarily ‘suspend’ their monthly donation payments for one month (i.e. no charge would be incurred for that particular month). After the suspended month, the subscription charges would resume until, and unless, the ‘STOP’ command is sent, or the ‘SKIP’ function activated in another month. Where the ‘SKIP’ function is not activated, the end user would be charged as normal for their monthly donation.

This innovation means that the Applicant need not explicitly state the ‘STOP’ command in every monthly reminder message being sent and as is required under Paragraph 7.12.5;

7.12.5 ‘Once a month, or every time a user has spent £20 if that occurs in less than a month, the information required under paragraph 7.12.4 above must be sent free to subscribers.

The primary objective is to allow consumers to suspend their donation payment as opposed to having to opt-out of the service in its entirety once the user has subscribed to the service.

The consumer would still be informed of the ‘STOP’ command throughout the duration of the service by the following means; the promotional material, information given at the point of entry and by receipt of a subscription initiation message. Furthermore, the ‘STOP’ reminder would be contained in each three-monthly spend reminder message. The two spend reminder messages sent in between the messages containing the ‘STOP’ reminders would provide the ‘SKIP’ function.

The Tribunal has temporarily granted the application for an exemption under Code paragraph 5.1.2a from paragraph 7.12.5 to take effect on 10 January 2010 for a pilot period of six months, subject to the following specific conditions:

  • For the ‘STOP’ command to be made available and fully functional throughout the duration of the service with consumers being reminded of the existence of the ‘STOP’ command every three months.
  • That the use of the ‘SKIP’ function remains the instruction command (throughout the lifetime of the permission certificate) which consumers must activate to ‘suspend’ payment of their monthly contribution.
  • That all free service messages being sent should start with the wording ‘FreeMsg’ or equivalent at the outset of the message.
  • That all promotional material is to be submitted for copy advice prior to the launch of the service.
  • That the exemption is granted on the basis of a trial, subject for review in six months, from the date stipulated in the permission certificate. Any policy consideration will remain with the PhonepayPlus Board.