New code to clobber mobile premium SMS scammers

By Stuart Corner
Tuesday, 11 November 2008 06:17

IT Policy - Government Tech Policy

A new code of conduct for the provision of mobile premium services should make it much more difficult for unscrupulous operators to con consumers into signing up to subscription services for ringtones, wallpapers, horoscopes etc delivered as SMS or MMS messages with weekly or monthly fees charged to their mobile phone account.

As iTWire has previously reported, the current rules are manifestly inadequate to prevent such practices and they have already prompted the Australian Competition and Consumer Commission to issue a warning to consumers and to turn its attention to the advertising practices in the industry.

According to ACCC chairman, Graeme Samuel, "As many of these services are directed at the younger, less experienced consumer, the ACCC is particularly concerned over what it considers is the failure of certain advertisements to adequately disclose the costs and ongoing nature of the services offered."

The new rules embrace the basic provisions of the existing industry scheme and industry guideline but contains some significant enhancements. They are contained in an industry code developed by Communications Alliance. It is presently in draft form but once finalised it will be submitted to the Australian Communications and Media Authority for registration and will then become mandatory.

The code is accompanied by a Guideline designed to aid in interpreting its rules and provide examples of how a supplier can comply with these.

It contains a number of new rules but the most significant is that: "a premium SMS or MMS service cannot be provided until the customer has sent an opt-in SMS message from the mobile phone, regardless of the mechanism that the customer originally used to request the service."

In addition, customers will have to be clearly informed of the costs of the service. Unless customers have requested the service from a mobile phone ," a provider must send an SMS subscription request message to the customer's mobile phone including details of cost and frequency of services."

There will also be stricter obligations in subscription advertising requirements, including greater prominence of the word 'subscription' and advertisements for premium messaging subscription services (and all marketing messages sent to a customer's mobile phone) must include details of the STOP message and these details must be provided on an ongoing basis.

Another provision is likely to make such services less financially attractive to providers: content providers' help lines will have to be staffed with live agents.

There will also be a register of content providers and aggregators and a rule that mobile service providers - who are the organisations actually billing the end customer - must not enter into contracts with those not on the register.

Also, Communications Alliance had launched a web-based 'one-stop shop' - (www.19sms.com.au ) - to provide consumers with a comprehensive guide to mobile premium services.