NOTICE TO INDUSTRY – PUBLICATION AND IMPLEMENTATION OF THE 12TH EDITION OF THE PHONEPAYPLUS CODE OF PRACTICE
30 March 2011
FOR THE ATTENTION OF ALL THOSE INVOLVED IN PROVIDING PREMIUM RATE SERVICES FOR THE PURPOSES OF SECTION 120 OF THE COMMUNICATIONS ACT 2003
This Notice is being issued to inform all those who provide premium rate services for the purposes of section 120 of the Communications Act 2003, that the 12th Edition of the PhonepayPlus Code of Practice (‘the 12th Code’) has been published and approved by Ofcom on 30 March 2011, and will come into force on 1 September 2011.
Those involved in providing premium rate services should familiarise themselves with the 12th Code before 1 September 2011, and make all preparations necessary to ensure that the provisions of the 12th Code are not breached from 1 September 2011 onwards. In particular, we would draw attention to the following requirements of the 12th Code, for which we will expect providers to have all necessary arrangements in place to meet by 1 September 2011.
Requirement to register with PhonepayPlus
The following paragraphs of the 12th Code relate to a requirement to register with PhonepayPlus:
3.4.1 Before providing any premium rate service all Network operators, Level 1 and Level 2 providers must register with PhonepayPlus subject only to paragraph 3.4.3 below.
3.4.2 PhonepayPlus may identify particular categories of premium rate services in respect of which registration will not be required (‘exempt services’). PhonepayPlus will provide public notice of any such exempt service and will publish a full list of exempt services from time to time.
3.4.3 Network operators, Level 1 and Level 2 providers who provide only exempt services are not required to register with PhonepayPlus.
For the avoidance of doubt, Network operators, Level 1 providers and Level 2 providers are defined by the 12th Code as follows:
5.3.4 [...], ‘Network operator’ means, for the purposes of this Code in respect of any premium rate service, a person who falls within Section 120(10) or Section 120(11) of the Act and:
(a) who is a lead network; or
(b) has a direct network connection and has direct billing arrangements in respect of that connection with the lead network; or
(c) through arrangements made with a lead network, provides electronic communication services to the public and bills the public directly, and can perform or can require the performance of all the obligations that are set out in Section 3 of the Code; or
(d) if no-one falls within (a), (b) or (c) above, the Network operator shall be the person who falls within Section 120(10) or (11) and, in respect of the premium rate service or services in question, provides or has, in the reasonable opinion of PhonepayPlus, the closest or most substantial connection with the provision of the communications network used for the provision of the premium rate service.
A direct network connection exists when a person provides switching equipment (to currently accepted industry standards), which by interconnection arrangements made between that person and the lead network, enables the conveyance of signals between the lead network and that person.
5.3.7 Any person who falls within Section 120(9)(a)-(d) or Section 120(10) or (11) of the Act who is engaged in the provision of a Premium rate service (‘the relevant premium rate service’) and who is not a Network operator in respect of that service may be a Level 1 and/or Level 2 provider.
5.3.8 (a) A Level 1 provider is a person who provides a platform which, through arrangements made with a Network operator or another Level 1 provider, enables the relevant premium rate service to be accessed by a consumer or provides any other technical service which facilitates the provision of the relevant premium rate service.
(b) A Level 2 provider is the person who controls or is responsible for the operation, content and promotion of the relevant premium rate service and/or the use of a facility within the premium rate service.
All parties who fall into the definition of Network operator, Level 1 provider or Level 2 provider in respect of any role they play in the provision of a premium rate service must register with PhonepayPlus by 1 September, subject to the exemptions set out below. Registration can be performed through the PhonepayPlus website from a date in April, to be confirmed. There is a fee for registration which is £100 plus VAT for the financial year 2011/12, payable by credit/debit card upon registration through the website.
Exemptions to registration are as follows:
- Those involved in providing a premium rate service who fall outside the definitions at paragraphs 5.3.4, 5.3.7 and 5.3.8(a) & (b) of the 12th Code;
- Those who would otherwise have to register, but who only provide premium rate services on the 087 number range.
Those who will be required to register, but will not have to pay a fee for doing so, are as follows:
- Charities registered with the relevant body for England, Northern Ireland, Scotland or Wales;
- Those whose total annual premium rate services revenue is £5,000 per annum or less.
Requirement to ensure clients are registered with PhonepayPlus, where necessary, before contracting with them
The following paragraphs of the 12th Code relate to a requirement to contract only with other registered parties, where that party performs a role that would require that they register:
3.3.2 In connection with the provision of premium rate services which are not exempt services (see paragraph 3.4.2 below), Network operators, Level 1 and Level 2 providers must only contract with other Network operators, Level 1 or Level 2 providers which are registered with PhonepayPlus.
3.3.3 Such contracts must include provisions that:
(a) each party is bound to comply with the Code and any directions made by PhonepayPlus in accordance with it; and
(b) pursuant to section 1 of the Contracts (Rights of Third Parties) Act 1999, PhonepayPlus may directly enforce the relevant term(s) of that contract.
3.3.4 Any breach of these provisions concerning the obligations of Network operators and Level 1 and Level 2 providers in respect of contracts will be regarded as very serious Code breaches.
All those subject to this Notice must ensure that any parties with whom they intend to contract on or after 1 September to provide premium rate services, and who are not exempt from a requirement to register, are registered with PhonepayPlus. Checks can be performed on the PhonepayPlus Registration Scheme from July 2011.
Requirement to register premium rate services
The following paragraphs of 12th Code relate to a need for all Level 2 providers to register details of their services with PhonepayPlus:
(a) Level 2 providers must provide to PhonepayPlus relevant details (including any relevant access or other codes) to identify services to consumers and must provide the identity of any Level 1 providers concerned with the provision of the service.
(b) PhonepayPlus will include all such details on the PhonepayPlus Register and those details will be available to be checked directly by consumers.
(c) Whenever the information provided under sub-paragraph 3.4.12(a) above changes, the updated information must be provided to PhonepayPlus within two working days of the change.
All those who would be defined as Level 2 providers under the 12th Code, and who are providing premium rate services from 1 September 2011, must register those services with PhonepayPlus before 1 September 2011. Registration of services can be performed through the PhonepayPlus website from a date in April, to be confirmed.
Requirement to perform due diligence on clients, and to have systems in place to comply with the Code and assess the risk posed by clients
The following paragraphs of the 12th Code relate to a need for all Network operators, Level 1 and Level 2 providers (in respect of Code paragraphs 3.1.1 and 3.1.3) to ensure they have such systems in place as to effectively comply with the Code, assess the ability of their clients to do so on an ongoing basis and have an ongoing plan to control any risk presented by clients. Network operators and Level 1 providers (in respect of paragraph 3.3.1) are also required to perform due diligence on their prospective clients:
All Network operators, Level 1 and Level 2 providers must:
3.1.1 ensure that PhonepayPlus regulation is satisfactorily maintained by;
(a) taking all reasonable steps in the context of their roles, including the adoption and maintenance of internal arrangements to ensure that the rules set out in Part Two are complied with and the outcomes achieved in respect of all premium rate services with which they are concerned, and
(b) carrying out their own obligations under the Code promptly and effectively, and
(c) taking all reasonable steps to prevent the evasion of, and not to undermine, the regulation of premium rate services, and
(d) taking all reasonable steps to ensure that consumer complaints are resolved quickly and fairly and that any redress is provided quickly and easily;
3.1.3 assess the potential risks posed by any party with which they contract in respect of:
(a) the provision of premium rate services, and
(b) the promotion, marketing and content of the premium rate services which they provide or facilitate,
and take and maintain reasonable continuing steps to control those risks;
3.3.1 All Network operators and Level 1 providers must perform thorough due diligence on any party with which they contract in connection with the provision of premium rate services and must retain all relevant documentation obtained during that process for a period that is reasonable in the circumstances
All those to whom these rules apply must ensure that they have such systems in place, or that due diligence is performed on all clients, by 1 September 2011. Guidance on how to comply with these rules (the General Guidance Note on ‘Due diligence and risk assessment and control on clients’) can be found on the PhonepayPlus website.
Transitional arrangements for the investigation of consumer complaints and PhonepayPlus monitoring
PhonepayPlus is informing all those to whom this Notice applies that the following transitional arrangements will apply to the conduct of investigations relating to any facts or matters occurring around the time of commencement of the 12th Code which form the subject of consumer complaints, and/or PhonepayPlus monitoring:
1) Where the facts and matters of a complaint and/or monitoring have occurred prior to 1 September 2011 which give rise to breaches of the 11th Edition of the Code (‘11th Code’), they will be investigated and adjudicated under the relevant definitions, processes and sanctions of the 11th Code
2) Where the facts and matters of complaints and/or monitoring occur both prior to and after 1 September in respect of the same service, then the facts and matters occuring after 1 September will be investigated by PhonepayPlus and adjudicated under the relevant definitions, processes and sanctions of the 12th Edition of the Code, unless PhonepayPlus determines that it is in all the circumstances more appropriate for the facts and matters occuring before 1 September to be investigated, in which case the investigation will continue under the 11th Code. In an appropriate case, PhonepayPlus may decide to investigate breaches of both the 11th Code and 12th Code in relation to facts and matters occuring before and after 1 September respectively. PhonepayPlus will publish, within the Tribunal decision for the relevant case, its reasons for proceeding under either the 12th Code or the 11th Code, or both.
3) Where facts and matters of a complaint have occurred after 1 September 2011, then they will be investigated and adjudicated under the relevant definitions, processes and sanctions of the 12th Code.
PhonepayPlus will continue to monitor premium rate services, and perform other such checks as are necessary, to ensure that the 12th Code is complied with.