Supporting vulnerable consumers in the phone-paid services market
26 August 2020, Emma Bailey, Policy Manager
Many regulators have been wrestling with how we can support vulnerable consumers to use the goods and services that we regulate. Few, if any, regulators will claim to have the perfect solution. Vulnerability and what makes consumers vulnerable is nuanced and complex. Equally, many markets have developed rapidly in recent years. The phone-paid services market is no different; the market we regulate has continued its transition from fixed to mobile, with a number of digital content platforms using phone payment as one of several payment options.
Given these changes, and the changes to our strategic purpose and regulatory framework, we commissioned a review to help us better understand vulnerability and our approach to it. The aim of this review was to assess best practice across some of the UK’s key regulators in relation to vulnerability, and to see how our approach compares to ensure we are working in the best interests of consumers. Ultimately, we want all consumers to be able to use phone-paid services with confidence.
Vulnerability in the phone-paid services market
Vulnerability is a broad concept, and it’s not always easy to identify vulnerable consumers. The research tell us that there’s no single ‘type’ of vulnerable consumer, and any approach to vulnerability needs to consider both an individual’s characteristics, needs and circumstances (such as age, disability, income, etc) as well as the nature of the market and the players that operate in it.
In relation to the phone-paid services market, the research suggests that its structure and the behaviour of some of the players in it may create vulnerabilities for some consumers. It finds that the very benefits that phone-payment offers, like ease and convenience, can also create risks for some consumers. For example, consumers who may not be aware that you can use your mobile phone bill to pay for things or who might be rushing and potentially vulnerable to being caught out.
What else can be done to support vulnerable consumers?
The report suggests that we, as a regulator, and providers in the market can do more to ensure that the phone-paid services market can serve all consumers well, including those who may be vulnerable or at risk.
The recommendations suggest that we should make sure we have good information and processes for identifying vulnerable consumers, when we engage with them (both online and on the phones). The report also recommends that we work with other regulators and consumer bodies who are also grappling with these kinds of issues, to share information and stay on top of best practice.
As part of this work, we’ll also be thinking about what requirements we place on providers to ensure they too are thinking about vulnerable consumers in the promotion and delivery of phone-paid services.
We know that many of the providers offering phone-paid services already do a lot to ensure that consumers can engage positively with phone-paid services. Through our review of vulnerability, we want to build on that and make sure that all providers can deliver a positive experience for consumers, including those who may be vulnerable.
The report recommends that to do this, we should consider what more we can do with providers to:
• make sure staff have the capability and training to deal sensitively with vulnerable consumers and manage complaints and problems appropriately
• ensure all providers give clear information to consumers, including clear opt in/opt out processes and terms & conditions
• identify groups of consumers who are missing out on phone-paid services who may benefit from them.
Our next steps
Building on the recommendations of this report, we have developed a work programme around vulnerability.
As part of this, we’re going to be reviewing the effectiveness of our own processes and procedures in identifying and responding to consumers who may be vulnerable or at risk, including how we communicate with consumers who contact us. We will also seek opportunities to work with government and other regulators, as well as consumer bodies and industry stakeholders. This will include both sharing good news stories, providing clear advice to protect consumers who may be vulnerable or at risk and working with industry to influence behaviour.
Alongside this work, we are currently reviewing our regulatory framework, our Code of Practice, to ensure our regulation remains fit for purpose and best serves the interests of phone-paid service consumers. This review – the biggest we’ve undertaken in a decade – provides us with a valuable opportunity to put clear standards and expectations in place that ensure any specific needs of consumers who may be vulnerable or at risk are able to be met.
Through Code 15, we will be developing and consulting on policy proposals around vulnerability as well as in relation to customer care and refunds. We’ll also be developing policy options for better information sharing between us and market players to give us a clear and early understanding of potential issues and risks, and considering how our Code 15 proposals can incentivise providers and give us good knowledge of what’s happening across the industry to protect vulnerable or at-risk consumers and prevent harm before it occurs.