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Adequacy of information provided to consumers prior to entering a contract or obligation to pay

2 June 2015

We have recently seen a significant increase in the number of complaints from consumers who claim to have been unaware that they have entered into a service that incurs charges to their telephone account whilst browsing on the web and clicking on active buttons using their handsets or other devices. This is particularly an issue with, but not limited to, mobile internet-based services which charge per page or item viewed, and subscription-based competitions.

We are issuing this compliance update in the view that more consistent standards will benefit both consumers and the PRS market as PRS continues to converge with other payment options in respect of them being offered for the same products and services. This compliance update is relevant to all providers of premium rate services (PRS), but particular attention is required from providers of services sold across the internet and using direct operator billing, premium SMS and the Payforit (PFI) scheme to charge.

PhonepayPlus is also mindful of the Consumer Contracts (Information Cancellation and Additional Charges) Regulations 2013 which came into force on 13th June 2014. Amongst other things, the Consumer Contracts (Information Cancellation and Additional Charges) Regulations 2013 place responsibilities on providers to ensure clarity and consumer understanding before the consumer enters into a financially binding contract with the provider, and subsequent to the contract being concluded. In these respects the Consumer Contracts (Information Cancellation and Additional Charges) Regulations 2013 are generally consistent with existing requirements in the Code.

To read the full compliance update, please click here.

Compliance advice:   

The PhonepayPlus Executive provides a compliance advice service which is available to providers free of charge. Providers can seek compliance advice by contacting us at compliance@phonepayplus.org.uk. Please note that advice from the PhonepayPlus Executive is not binding on the PhonepayPlus Code Compliance Panel Tribunals although a record of advice is maintained and taken into account should a service later be found to be in breach of the Code.