“The only thing needed for evil to triumph is that good men do nothing” – Edmund Burke
63336 has become one of the most successful and widely used 5 digit short-codes in the country. Yet we work in an industry that is associated with bad consumer experiences. From expensive ring tone downloads, to telephone voting rip offs, to plain old spamming. All of these abuses have severely dented the public trust in the premium rate industry. At 63336 we have chosen to behave well and it is exasperating to see the abuses that go on in the industry and the sometimes feeble efforts to stop them.
So why is the premium rate industry a good place to be?
Premium rate mobile phone services offer a route to market for lots of innovative companies who can prosper because of the highly successful micropayment mechanism. Consumers can purchase small value items using their mobile phone. No need for credit card details every time you purchase; no need to remember your mother’s maiden name and the date of your daughter’s birthday every time you spend 25p; it is all done for you on the phone.
However, with such a simple and easily accessible payment mechanism there is always a risk of abuse since a company can simply charge your bill just by sending a text to your number. To reduce this risk we rely on regulation. The regulator has an important role in protecting the consumer and policing the system.
You can normally judge the success of the regulator by the trust the consumer has in the system and in some key areas this trust is missing.
So what are regulators doing?
The key player in the regulation of mobile services is PhonePayPlus. This is an offshoot of Ofcom dedicated to regulating the premium rate goods and services that you can buy by charging the cost to your phone bill and pre-pay account. That means they regulate us at 63336 and they also regulate the television voting lines, directory enquiries and various subscription and chat services.
First it is worth making clear that PhonePayPlus has started to tackle the problems. The year 2008/09 was a wake-up call. Their annual report for that year shows that they received 21,401 mobile related complaints, a huge number. This prompted them to undertake strategic actions set out in the PhonePayPlus Mobile Review which reported in July 2009. There were many good things in this document with new measures covering subscription services and promotional texts. PhonePayPlus can also point to a dramatic fall in complaints in Q1 of this year compared to last year, although how much of that can be linked to falling usage of premium rate services as a whole due to the recession is not clear. Yet is all this enough? PhonePayPlus reported that there were still 3,119 complaints in the mobile sector in the 3 months to 30 June 2009.
I would like to look at just one area of ongoing weak regulation in order to highlight the problem. Over the coming months we will highlight others but today I want to focus on spam.
Spamming
Spam on your mobile is tantamount to an invasion of your personal space. We all know what spam is and that feeling of anger when we receive a spam. It is an unsolicited message sent to your phone. It comes out of the blue. You never ticked a box saying text me. It is spam.
There are government laws covering spam. Under Section 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003, “it is an offence to send unsolicited promotions using electronic mail (including text messages) for direct marketing purposes, either where the recipient has not specifically consented to receiving such promotions, or where the recipient’s details were not obtained whilst purchasing a similar or related product or service to that being promoted. Even where such consent or details have been obtained, recipients must be given the opportunity, within each promotion, to opt out (without charge) of using their details for such promotions”.
That seems pretty conclusive. Indeed, the regulator of the Mobile Industry, PhonePayPlus, has its own code of practice and supporting fact sheet, “Unsolicited Promotions” which states “service providers should note that senders of automated direct text messages must have the prior consent of the recipient before the message is sent”. PhonePayPlus
So if you get a message out of the blue, perhaps from a company you used a few months ago, complain and PhonePayPlus will take appropriate action perhaps fining the service or even stopping it…….
Er, well no.
You see, PhonePayPlus has a different take on this. They have come up with concept of an “implied opt-in”. Somehow by texting a service, providing the terms and conditions of that service say somewhere that you have agreed to receive marketing text, you have implicitly opted in. The fact those T&Cs are on the web somewhere and were not visible when you made your purchase of a service on the phone is deemed irrelevant.
I’m not a lawyer but I don’t see any implied opt-in. When you go to a sweet shop and buy a chocolate bar you don’t implicitly tell the sweet shop owner to bombard you with marketing literature offering great deals on sweets. Yet in the mobile world because your personal phone details are captured at the point of purchase you have somehow miraculously agreed to be spammed.
It is wrong and an example of where lax regulation allows ongoing abuses of the rules.
Good behaviour is good for us and good for our customers
At 63336 we have chosen to behave well. This doesn’t mean we will never make a mistake or that we won’t ever interpret the industry code of conduct incorrectly. However, it does mean that we are genuinely trying to do the right thing for the consumers and our customers. This goes beyond the letter of the law. It means interpreting the laws from the perspective of the consumer. We believe you can succeed by doing the right thing and that customers will ultimately reward those companies that do so. However, we also need to ensure that the “premium rate mobile environment” is not trashed by other, irresponsible companies thus destroying the market for everyone.
We have over 2.2million unique customers who have used our service. Perhaps there is a loophole that means we could spam some or all of them, under the pretext of an offer or a survey. However, it wouldn’t be the right thing; we know it, the big companies know it and the regulator ought to know it.
PhonePayPlus can and will battle from a regulatory perspective but for real consumer confidence there is little better than good customer experience and a trusted brand.
With a focus on both of these attritutes 63336 is well positioned to make the best of what is the simplest payment mechanism on any device curently in existence and because people have always paid for telecoms, done properly, it sits comfortably with consumers.