PhonepayPlus Consultation: Information Providers Beware!

June 24, 2009

PhonepayPlus is inviting responses from industry, consumers and all other stakeholders discussion paper on the development of its 12th Code of Practice in order to properly inform thinking as it develops its full Code consultation for later in 2009. The paper takes into account recommendations made by Ofcom in its recent PRS Scope Review.

The Code of Practice is the document through which PhonepayPlus regulates the phone-paid services industry. The regulator describes its 12th revision of the Code as among the most significant in the organisation’s 23-year history. PhonepayPlus intends to carry out a thorough examination of the current version to determine how it might be improved, especially with regard to the explosion of mobile phone-paid services, which have changed the face of the industry in recent years.

PhonepayPlus proposes, and explores the impact of, four main changes to its regulatory regime in the discussion paper. These are:

1.                               That the new Code is based on identifying desirable outcomes, and supporting them with rules where appropriate, rather than prescribing a step-by-step guide to compliance

2.                               That every business in the phone-paid services value chain will assume an appropriate degree of responsibility for the provision of compliant services and the delivery of consumer protection measures

3.                               The creation of a database on which all Service Providers (SPs) and Information Providers (IPs) will be registered for due diligence and risk management purposes

4.                               That providers must have in place adequate customer care facilities to ensure consumers are able to register a complaint and seek redress as quickly as possible

For lawyers, item 2 is likely to be most significant. The paper states that ‘In practice … PhonepayPlus’ regulatory powers are focused primarily on the service provider …Currently the 11th Code allows for a breach to be “passed through” from a Service Provider to an Information Provider, if PhonepayPlus is satisfied the IP has caused the individual breaches and the IP accepts the pass-through. The majority of cases have both a service and information provider involved in the service – and so to some extent the breaches. We believe the new Code should facilitate the targeting of as many companies in a value chain as have been involved in causing consumer harm.’

 The closing date for comments is 1 August 2009.
To read the Code 12 discussion paper, click here.