Ryan targets 'rogue' phone services

A new bill aimed at tackling “rogue service providers” in the telecommunications sector and stamping out widespread scams in the operation of premium rate services was brought before the Dáil by the Minister for Communications Eamon Ryan today.

The Communications Regulation (Premium Rate Services) Bill 2009 provides for greater regulation of a multi-million euro industry which generated 76 million text messages in the Republic last year.

Mobile phone ring-tones, wallpapers, games and competitions and quizzes are amongst the most popular premium rate services available in the Republic but a number of providers have been accused of taking advantage of vulnerable groups who have spent large sums after inadvertently subscribing to expensive services.

At least six thousand complaints were made to the mobile phone watchdog RegTel in 2008, with 98 per cent relating specifically to premium rate service operators.

Phone users complained they had signed up to services unknowingly while others said service providers had failed to unsubscribe them from services despite “stop” commands being sent. There were also reports of multiple tariffs being applied for the same service and phone users not being told of a €20 spending limit.

Mr Ryan described the industry as “a valuable contributor to the Irish economy” but said there was “a minority of rogue service providers “essentially scamming the consumer".

"These practices cannot continue, and those companies must no longer be allowed to operate.”

He said the industry and the regulator needed to work together “to preserve consumer confidence and afford greater protection to mobile phone customers in Ireland.”

The Bill will create an offence of overcharging for a premium rate service and will see the regulation of the industry transfer from RegTel, to the communications regulator ComReg. It will be given greater power of enforcement including the authority to impose fines and suspend or revoke licences, where sharp practices occur.

Labour's communication spokeswoman Liz McManus welcomed the bill but called for the inclusion of refunds to mobile phone customers affected by rogue providers to be made central to the legislation. She said the absence of a refund system was “one big hole below the water line”.

“Under the present regime, a code of practice signed up to by service providers, RegTel may order refunds to be made to consumers,” Ms McManus said. RegTel’s annual report for 2007-8 lists refunds of approximately €200,000.

“However under the new regime, there is instead a penalty for over-charging, a fine of up to €5,000 in a district court, with higher penalties in higher courts. But overcharging is not the major problem,” she said.

She pointed out a bigger problem was subscription services and how to get out of them, misleading promotions and failure to warn people when they have exceeded price thresholds. “These are the problems for which people want refunds,” Ms McManus said.