What consumers expect when asking for a refund for a phone-paid service

29 August 2019, Simon Towler, Director of Policy and External Relations

At the PSA, we hear from consumers every week about their experiences with phone-paid services. Many report confusion or disappointment about the way their request for a refund has been handled. 

We have clear requirements in our Code of Practice for industry, and in our Guidance, about how phone-paid service providers should handle requests for refunds. But we’re always listening to consumers and people working in the industry about how this can improve.  

That’s why we commissioned market research agency Futuresight to examine consumer attitudes to refunds, both for phone-paid services, and for other service types. They came back with some significant findings.  

First, consumers’ experience of seeking a refund is particularly poor if they did not realise they had made a purchase or where they report that they had not interacted with the service at all. They often aren’t aware of who to contact directly and why (or even how) they have been charged. They can end up speaking to multiple people, including their mobile network, the payment platform provider, and the regulator, before establishing who has charged them and why. 

This is a significant issue within the phone-paid services market, which the PSA has conducted separate work to address. We’re introducing new regulatory requirements for phone-paid subscription services, making it harder to sign up to a service inadvertently. And we’ve also worked with the mobile networks and independent security experts to ensure that platform security standards remain high.  

However, there is also clearly scope for improved standards that are more in line with consumer expectations on refunds, and clearer information from service providers to make the process of seeking a refund better.  

Futuresight also found that consumers had lower expectations of receiving a refund from companies they were not aware of before being charged than for known purchases. This might seem obvious – an unexpected charge is likely to be from an unfamiliar company.  

This, in turn, makes it harder to seek a refund, as consumers are unsure who to contact in the first instance, or even wary of contacting a company they don’t know or even suspect of malpractice.  

By comparison, non-phone-paid service users who are aware they have made a purchase feel confident in requesting a refund and protected during the process of seeking one. When a charge for a phone-paid service is known and expected, phone-paid service users have broadly similar confidence and expectations. 

Finally, consumers expected more choice in their method of refund.  

Our Code of Practice says that refunds must be provided promptly and in an easily accessible manner when they are being issued. In light of these findings from Futuresight, we will be reviewing how our regulations and guidance can better support consumers in seeking and obtaining refunds from phone-paid service providers.  

As always, we welcome hearing your views on this. Whether you’re a consumer or someone working in the phone-paid service industry, feel free to get in touch. 

View the Futuresight research in full here.