9 April 2010

Does PhonePayPlus Get Carter?

Posted by: Stephen Williams

I was watching Get Carter on Five last night. This was the original film where Michael Caine returns to Newcastle to find out why his brother died. In the course of doing so he uncovers a trail of sordid vice and corruption with various dodgy goings on that lead him to exact a form of justice. Quite why the police haven’t brought the bad guys to justice isn’t clear but Carter has only to scratch the surface to get evidence of the problems and then he deals with them.

Anyway, great film and great music and, being on Five, it of course had adverts. One advert caught my attention and it wasn’t just because it was a premium rate service with the number being promoted on gyrating bottoms. What shocked me were all the flagrant breaches of the PhonePayPlus Code of Practice on promoting premium rate services.

It is not FREE

The advert was promoting the number 88099. The biggest part of the promotion were the words saying Text FREE to 88099. Ok it didn’t say it was free to text, it merely asked you to text the word FREE. Strange they chose that word isn’t it?

The code, section 5.11 is fairly clear on the use of the word FREE, saying no service may be promoted as free if it isn’t. In January 2009, PhonePayPlus also issued a Statement of Expectation which summarises the changes and actions service providers may need to take in order to remain compliant with the code. In the statement it says “price information must be clearly displayed – as prominent as any other aspect of the promotion. Promotional material must not suggest any premium rate product or download is ‘free’”.

It costs one pound fifty

There are strict guidelines on how convey the price. Again, to quote PhonePayPlus, “In all cases the price should be expressed in conventional terms such as “50p per minute” or “£1.50 per text”. Variations on this by charges being presented in per second formats or without reference to a “£” sign (where the rate is above 99p) may breach the PhonepayPlus Code.”

PhonePayPlus makes it a big deal that pricing should be set out in familiar numerical form. Quoting the price in full words doesn’t meet that requirement, especially where it’s only on for a short time.

Who is policing this?

Surely it is not beyond the regulator to do some proactive policing in this area. All TV adverts have to approved by Clearcast before they can be transmitted. Clearcast are supposed to ensure the advert is acceptable for the audience likely to view the advert. However, they are not responsible for ensuring compliance with the regulations surrounding premium rate services.

Television advertising often reaches much larger audiences than other forms of advertising. It therefore would appear appropriate for PhonePayPlus to devote some resource to ensuring these adverts comply with regulations before they can be aired. A recent survey commissioned by PhonePayPlus suggested that the public have more faith in services promoted on television as the mere fact the service can afford to use this medium somehow makes it more legitimate. It is a shame therefore that the adverts haven’t been cleared by the regulator.

Michael Caine’s anti-hero, Jack Carter, does have one redeeming feature. He takes up the challenge on his own back, identifies the bad guys and enforces his code of justice. Wouldn’t it be good if the regulator also took up the challenge, identified the bad guys and enforced its code?

24 February 2010

A refund from 2ergo?

Posted by: Stephen Williams

There have been further developments in the case of the colleague who received a rogue, chargeable text on a service supplied by 2ergo Limited.

A week ago she got a text out of the blue entitled “FreeMsg” saying “This is NOT spam! Due to a technical error we owe you a small refund for text messages to your mobile. Please call 08448243696 so we can refund you.”

What to do?

The immediate reaction is that this is another scam. I mean seriously, given all the press articles about reverse charge numbers and the like, would anyone ring a number like that? A quick check on the PhonePayPlus website and the first thing one discovers is that the number is owned 2ergo Limited. The last time these guys sent us a text it cost us £3, so our first reaction was how much did this one cost?

After some discussion we decided to ring the number from a landline on the basis that it is hard to charge landlines for reverse bills or text them. The first thing that happened is that we got through to a recorded message (more alarm bells ringing). It is a polite, recorded message claiming to be from 2ergo and after a minute or so it asked us to input our mobile number so they could check it against their records and see if we are due a refund (surely they already have this as they texted us in the first place?). They also explained that a customer service rep would ring us to get our name and home address. At this point we put the phone down. We had no idea what to think. Is this genuine? Is it a further scam?

Is this another scam?

I truly don’t know whether this offer of a refund was genuine or not. However, this paranoia is a reflection of the lack of consumer trust in the whole premium rate industry. Just check out the the Scream forum to get a feeling for how deep it goes. You get a text from someone you don’t know and immediately think the worst. You seldom know who to trust in this industry and this is precisely the reason why PhonePayPlus needs to do so much more.

There is a worry we are sounding ungrateful here. If this is genuine then surely I should congratulate them. However, if you want to restore customers’ trust you need to do more than send a dodgy, anonymous, text pointing people to a recorded message.

What should 2ergo do?

Assuming it was a genuine attempt to refund the customer then the refund process should be much more seamless and engender trust.

2ergo have records of all customers who sent texts by Win4Fun. If it can’t identify genuine texts from those sent as a result of their technical error it should refund the lot. This list of numbers and amounts should be sent to the network operators who have the ability to credit the relevant accounts (or hold onto the credit until the PAYG is topped up). A short text to the customer telling them this has happened will be fine. Vodafone can clearly credit customers – it did so in this case when my colleague complained. Yes there are higher costs associated with this route but, sorry, once you have sent out rogue texts, the onus is on you to restore the trust.

The application of these simple rules would be in the customers’ interests and it is surely them we should be worrying about?

10 February 2010

PhonePayPlus need to adopt a zero tolerance policy

Posted by: Stephen Williams
zero tolerance

Hard measures needed

A random, unsolicited text appears on your phone. What do you do?

If you are like most people, you will growl with annoyance at what appears to be spam and then delete it, assuming that is the end of the matter.  Well, that is possibly a mistake as you might unwittingly have paid that spammer £3 just for receiving the text and by deleting it you have lost the evidence.

A simple fraud

A colleague in the office got the following text last the week from number 83023.

“Win4Fun!Last months winner grabbed £500!This months questions is Who sang the song Paparazzi?Txt Enter plus you answer 83023 care? 08445796354. Close 13/02.”

She hadn’t subscribed to anything or texted the number before and she definitely didn’t respond. However, after thinking about it she decided to check her mobile account online and saw that she had been charged £3 for receiving that text.

That is wrong. It is illegal and this is what PhonePayPlus, the regulator, was set up to stop. Well yes, in principal, but the system is broken.

Getting the money back

PhonePayPlus encourage you to use their number checker, on their website, which reveals the service provider to be 2ergo Limited. This is the same 2ergo that has 20 previous PhonePayPlus adjudications against services it has provided.  However, when she contacted 2ergo they explained they were just the aggregator and she would need to seek recompense from the content provider, Win4Fun… whoever they are.

Meanwhile, a complaint direct to PhonePayPlus solicited a call back. Whilst they were sympathetic to her complaint they explained that they could only investigate if they received 5-10 complaints from the public over any one service. They hadn’t received five complaints so in effect it was, “Terribly sorry but we will be adding to our files and we won’t be investigating further”.

A complaint to Vodafone resulted in an immediate, no quibble refund.

Too much hassle for £3?

The problem is of course that the charge for receiving the text is relatively small and the effort of recovering it so long winded and laborious that most people let it pass. If the rogue content provider is clever, they will have targeted contract-based, mobile phone users who seldom check their bills until the end of the month and by then have often deleted the offending message anyway. Add in the lack of faith that regulator will even investigate, is it any wonder that the public lose faith in premium rate industry?

Too many links in the chain?

Part of the problem is that it is unclear exactly who is policing these services. Vodafone is the network operator who takes the money off the customer. They in turn pass some of it to 2ergo who, as aggregator, have the contract with Win4Fun and deal with payments to them. With three levels in the chain it is all too easy to abdicate responsibility.

We need action

What is needed is for everyone in the chain to adopt a zero tolerance policy to these rogue services and create an environment where it is impossible for them to operate. Until the regulator gets a grip of this problem, acts quickly and bars these rogue services the problem will just go on.

20 previous adjudications against a service provider should be prima facie evidence of poor controls and poor business practices. This in itself should be grounds for investigation of any complaint from the public. My article uses just one example but it could so easily have been another service. In the last 3 months of 2009 PhonePayPlus published adjudications on 21 services and these were just the ones that a full warranted investigation (presumably because they each had 10 complaints or more). 2 Ergo Limited are in many ways the unfortunate carrier of the text in this instance, especially as there are many other aggregators who have way in excess of 20 adjudications involving services supplied by them. However, it highlights the fundamental nature of the problem.

We believe that PhonePayPlus needs to look at adopting a zero tolerance policy. Any complaint should be investigated and any complaint that is upheld should be punished. The fines and other punishment (such as withdrawal of licenses) should be increased so that the industry is forced put its house in order and rogue services find the cost of operating to be prohibitive.

14 January 2010

Why tinned tomatoes are not sold as a subscription service

Posted by: Stephen Williams

tin-of-tomatoes

What have tinned tomatoes got to do with mobile phones services? Everything, and here is why.

In pretty much any industry you know the cost of a product before you commit to buying it. When you buy an admittedly expensive £1 tin of tomatoes at the supermarket you go to the checkout, hand over the money and the transaction is completed. You don’t go home, wait a month and then receive a bill explaining that you have actually spent £20 on tomatoes this month. Yet, if this was the mobile industry you could expect a conversation along the lines of,

 “Yes I know it said £1 for the tomatoes but that was a daily subscription service, entitling you to credits for £1 of tomatoes every day. Didn’t you realise tinned tomatoes were a product sold as a subscription service? If you didn’t want tomatoes everyday, then all you had to do was send STOP. You will of course lose your outstanding credits for tomatoes not yet consumed”

I like tomatoes but not every day of my life. A bolognese addict might be interested in this sort of offer but me, no. I buy tomatoes when I want them and I only have pasta once a week, if that.

I definitely don’t buy my tomatoes on “subscription credits”. It is inappropriate for the product. Subscriptions are about receiving something on a regular basis, like a magazine, or they are used as a convenient way of paying membership fees. Subscriptions are not credits to buy something that you lose when you cancel the subscription.

So why is buying tomatoes relevant to mobile phones services?

Well they are both sold to consumers. However, that is sadly where the comparison ends. The mobile industry has a different approach to pricing that is seemingly accepted by the authorities and which does much to damage the consumer trust in the industry as a whole.

88888 Mobile ringtone/wallpaper subscription

Take, as an example, some recent TV adverts where you are urged to text 88888 and a pre-fix in order to download one of the advertised wallpapers. They also offer ringtones.

My immediate reaction was that ringtones are an old problem that had now been cleaned up but then I checked out the terms and conditions on the 88888 website. Here it says,

You’ll get these 3 ringtones for just £4.50 per week. The weekly payment is conveniently taken from your phone bill automatically. You then receive coupons to redeem against the items of content that you want. We have a huge selection to choose from and the coupons for each club are outlined below. Don’t worry if you don’t use all your credits, any left over credits will roll over to the following week. By joining one of the clubs you will make a big saving on all your downloads. Your club will renew each week but you can stop your club at anytime by texting stop to 88 888 or ringing our customer service line on 0870 1213186 (national rate). Make sure you don’t waste your credits by cancelling though.

Since when did this service fit the normal and accepted criteria of a subscription service?

If you subscribe to something you should get something each week. Not credits. The credits described here are just a form of vouchers. In any other industry you pay for a set number of vouchers upfront. Fair enough they may be time limited but you don’t get automatically charged for them each and every week and then lose them if you cancel future subscriptions.

Just a case of rotten tomatoes?

It is little wonder that a large proportion of the public do not trust subscription services in the mobile industry when you see promotions of this sort, apparently endorsed by the regulators?

There is no way this sort of promotion would be accepted in the supermarket industry and it should therefore not be acceptable in the mobile industry either. We would like to see PhonePayPlus ban  these type of subscription services.

11 November 2009

Are you being ripped off calling a 118 DQ service?

Posted by: Stephen Williams

118 services are still not coming clean about the true cost of directory enquires (DQ) calls. It is an amazing fact that after years of phone regulation it is still mind-boggling difficult to find out the cost of calling a DQ service from a mobile phone.

We have all heard or read statements similar to the one below when looking at an advert promoting a DQ service. 

“Calls to 118118 cost 79p per call, 29p per minute from most landlines. Mobile charges vary”

It’s an official statement, approved by the regulator and it is there to protect the public.  But hang on, what is the cost of making a call from a mobile?

Who uses a BT landline these days?

This is 2009. More and more of us use mobile phones and we don’t ring from a BT landline. From discussions I have had with industry insiders there are upwards of 50% of people calling DQ numbers from mobiles and in some age groups that figure is considerably higher. I have tried to get some evidence of the exact figure but I can’t find it anywhere on the web. Perhaps one of the DQ companies can come on line and tell us the correct figure?

So what is the cost of a call to a DQ service using a mobile phone and why don’t the DQ companies make it clear?

Well I thought I would try and find out how much it would cost. But rather than make the call and wait for the bill to come in I thought it would be good to find out before I made the call.

My thought process went, “I’m going to make a call to a DQ service so I will go on their website and find out the cost”.

Mission impossible

Ahem, it is not that straight forward. Indeed, it is next to impossible. I challenge anyone to find out the cost of mobile call to a 118 number by searching the specific DQ website. Next I rang someone at Yell to ask them what the price was. After a number of escalations within the organisation someone knowledgeable about these matters explained that part of problem is that the price varies by network. Since the prices vary the DQ companies are allowed to state “Refer to network operators for prices”.

So if you want to find out how much it costs you actually have to go to the network operators rather than the DQ companies to find out. That is strange, to say the least. It should not be too complicated for each DQ company to put a simple table showing the prices from each network operator on their website? Anyone would think they didn’t want to show them to us or they were in some way embarrassed?

So, onto the next stage of my search and a visit to the websites of each of the network operators.

In order to keep it all simple and make the comparisons work I chose to find out the prices of just one 118 service. I chose 118118 because back in 2007 they claimed to be the largest DQ suppliers with a market share of 53%.

The search for evidence proved quite difficult and the ease of finding information varied from site to site. I used the various website search engines and tried,  “Cost of a Directory Enquiries call” then, “Cost of a DQ call”  then, “cost of a call to 118118” and then, “Cost of a premium rate call”

Virgin ask you to call the team to find out this information. This call put me in a waiting list where unsurprisingly all of their operators were busy and expected wait time would be 20 minutes. I emailed instead and got an answer 2 days later.

T Mobile told me “for the cost of 118 refer to customer services”. However, a search on customer services brings up 100 hits, none of which is customer services unless you want a job. Eventually I emailed them and they called me back.

The numbers they don’t want to publish

Ok so what were the results? I have tabulated them below

Network

Fixed cost

Per min cost

Cost of a 1 minute call

O2

Zero

£1.00 per min

£1.00

Orange

£1.15

£0.40 per min

£1.55

Three

£1.22

£0.73 per min

£1.95

T Mobile

Zero

£1.50 per min

£1.50

Virgin

Zero

£1.00 per min

£1.00

Vodafone

£0.79

£0.49 per min (starting from  2nd minute

£0.79

For anyone new to DQ charging models the distinction between the “fixed cost” and the “cost per min” is actually very important. You see DQ services make money by keeping you connected. This is not just through the, “Do you need anything else sir?” but also when they ask, “Would you like us to connect you?” If you say yes the cost per minute keeps on ticking. If you are on T Mobile that clock is ticking at £1.50 per minute. You might only have connected to a standard number, perhaps the dentist or doctor, but all the time you are booking that appointment or describing your symptoms you are incurring a premium rate charge. It is enough to make you ill all over again.

 So what is the message ?

More people call DQ services (and other premium rate services) from a mobile than from BT. It is therefore misleading and inappropriate to quote charges from a BT landline especially when charges from some mobile networks are higher. Cost of calls from mobiles should be on the DQ website and be much more prominent and easy to find. If the pricing structures are too varied and take up too much space the industry should rationalise this. Pricing should be the same across all networks, as it is for texting.

2 November 2009

Phone regulation and doing the right thing

Posted by: Stephen Williams

“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.