We're seeking your input on our review of our regulatory strategy

27 February 2020, Gavin Daykin, Programme Director

Last month we announced that we’re carrying out a comprehensive review of our regulatory strategy. We are working towards a new Code of Practice that meets consumers’ expectations, is easy for industry to comply with and is supported by effective enforcement procedures.

This is the most comprehensive review of our regulation in ten years. The last time we did this kind of review was when Code 12 was developed. That review introduced the outcomes-based regulation that we’ve been using since then.

A lot has changed in the phone-paid services market in the last few years, let alone the past  ten years, and we are undertaking a review now as we think our Code needs updating to meet the needs of a changing market and consumer base.

Regulation must reflect the market and consumer expectations
With the huge rise in smartphone use over recent years and increased smartphone capability, more and more consumers are making purchases online using digital payment methods, including phone-paid services. Consumers expect phone payment to operate in the same way as these other methods.

Major brands are now offering their customers the option of paying for services through their phone bills and the phone-paid services market is now worth more than £630m, the majority of which is consumer spend through online channels, including things like games, music streaming, and charity donations.

We want to raise standards across the market
Our current Code, Code 14, is outcomes-based. We have a range of additional, more prescriptive rules in place to support compliance and ensure consumer protection.

While effective in many ways, outcomes-based regulation has its limitations too, and can start to get complicated when additional and more prescriptive requirements have to be introduced to prevent consumer harm or respond to harm that’s already occurring.

We see this review as an opportunity to ensure regulation is more effective. We want a new Code that is easy for providers to understand and implement, provides greater regulatory clarity and certainty, and is supported by effective enforcement procedures.

Above all, we want to ensure consumers can have confidence when purchasing phone-paid services they value. We’re committed to protecting consumers when things do go wrong, but we want to be more proactive to ensure consumer harm doesn’t happen in the first place.

Developing the Code together
Today we published a discussion document which provides a clear outline of the review, including its scope and objectives, along with our proposed assessment framework and our early thinking on what our future regulatory strategy might look like.

We’re looking forward to engaging with you and getting your feedback to help us develop our thinking and proposals for a new Code, over the next 12 to 18 months.

This is the first stage of engagement, and the input received here will help us to develop proposals for change, which we plan to consult on in Autumn this year.

The discussion document and details on how to respond to it can be found here.

We welcome all views and will carefully consider all responses.

You can continue to share your views with us informally until we publish a full consultation document, which is planned for Autumn this year, and will mark the beginning of our formal consultation stage.