A new approach to regulation: Code 15

08 April 2021, Jo Prowse, PSA Chief Executive

At the PSA, we are constantly looking to how we can improve the way we do things to protect consumers of phone-paid services. I’m therefore delighted that we have published a draft Code for consultation, which has been a year in development. The team has delivered this ambitious Code against a backdrop of very unique challenges.

The context

We have been operating an outcomes-based approach to regulation for more than a decade. Outcomes-based regulation worked well while during a period of market transition. 

Outcomes have been flexible but also allowed for issues to arise before they could be addressed. And as a result, we have had to rely on enforcement as well as introducing additional regulation, adding complexity and burden in the form of special conditions. 

In that time, consumer expectations have also changed significantly in line with experiences in other digital markets. Much of the market have kept pace with consumer expectations, but some have not. 

The objective

With this in mind, our view is that it is time for a new approach to regulation. We set ourselves the task of developing a new Code that aims to:

raise expectations in the market by introducing regulatory standards in place of outcomes
focus on the prevention of harm rather than cure
be simpler to implement and comply with.

We were also conscious that a new Code must be underpinned by an effective and efficient enforcement regime.

The new Code

We are today consulting on a new Code (Code 15). We believe the proposed new Code delivers against these objectives. The Code we are consulting on will enable us to regulate differently in the consumer interest, shifting our focus to preventing harm through verification, supervision and engagement. We aim to build trust in services and work flexibly with industry to identify and address risks before they materialise. And if issues do arise, Code 15 will enable us to act quickly and efficiently. We think this is in the interest of all of us: consumers, industry and the PSA. 

We are now seeking your views. The consultation runs until 5 July 2021. We are also running a number of stakeholder events for consumers and industry to hear from you directly. Please don’t hesitate to get in touch if you wish to get involved.