Regulator cracks down on mobile companies charging consumers without consent
The PSA has issued fines totalling £750,000 to three different companies in separate cases – all for billing consumers’ phone bills without their consent.
Prime Platform Solutions Ltd, IT Zone Limited, and Web Data Ltd were each banned from the phone-paid services market for five years and ordered to pay refunds to all eligible consumers who request one. Each company was fined £250,000.
The three companies had operated services charging £4.50 per message on a subscription basis. This was in exchange for text message alerts about horoscopes, online shopping vouchers and Lotto number draws.
Many consumers reported that they had not signed up for the services or given consent to be charged. One consumer, who was subscribed to the StarSign Alerts service operated by IT Zone, said:
‘I have been charged £4.50 per month by the service ‘StarSign Alerts’ to access horoscopes. I have never subscribed or signed up for this service… I did not give this company permission to incur these charges as I haven’t directly given my number or details to them.’
Another consumer, who was subscribed to the Voucher SMS service operated by Prime Platform Solutions, said:
‘I have been receiving and being charged for texts from this service. I do not know what the service is and I have no knowledge of signing up for it… I have been charged £4.50 six times.’
The PSA Tribunal found, in separate cases, that the three companies had committed multiple breaches of the PSA Code of Practice. These included failures to secure clear and verifiable consent to the charges from consumers in all cases.
As well as enforcing against poor practice, the regulator is introducing new requirements which come into effect on the 1st of November 2019, in order to protect consumers from harm and establish higher standards for industry.
The new rules will mean that consumers should not be able to be charged unless they go through a two stage sign up process, for example by inputting a PIN number, or creating an account and password. The rules will also make the signup process clearer to consumers, by making it clear that they are in a purchase environment and providing receipts after every charge. This is in line with what consumers expect from other online payment methods, and is already used by the many good operators in the market, providing music streaming, games, apps and other services.
View the IT Zone adjudication in full here.
View the Prime Platform Solutions adjudication in full here.