Bill aims to stamp out premium rate scams and abuses


NEW LEGISLATION designed to stamp out widespread scams and other sharp practices in the operation of premium rate services is to be brought before the Cabinet today.

The Premium Rates Services Bill proposed by Minister for Communications Éamon Ryan proposes substantial fines for abuses by operators of popular phone services such as ringtones, wallpapers, chatlines, competitions and information services, The Irish Timesunderstands.

The Bill also proposes an end to self-regulation by the industry, which will in future be subject to supervision by the State’s telecommunications watchdog, ComReg.

For the first time, premium rate service providers will require a licence to provide services. If the specified conditions are not met, the licence can be amended, suspended or revoked by ComReg.

The Bill is a response to persistent and widespread complaints by consumers about the operation of premium rate services. Last year, RegTel received more than 6,000 complaints from consumers, 98 per cent of which related to subscription services; this was three times the number in the previous year.

Sources said the legislation was being introduced only after lengthy attempts to get the industry to deal with the complaints coming its way.

In many instances, people did not know that they had signed up to services until they received their phone bills. Children and older people were particularly susceptible, with the credit from children’s phones being wiped out after they subscribed inadvertently while requesting more information from a service.

Other problems investigated by RegTel included service providers failing to implement the “stop” command, consumers not being notified of the €20 spending limit and the use of multiple tariffs for the same service.

Mr Ryan decided to implement the changes in a Bill after consulting with the Attorney General. Last year he said tighter regulation was needed to ensure consumers were not exploited.

“There is right and real anger from the public in relation to premium rate text and phone services,” Mr Ryan said. “This is a significant issue of consumer concern as children especially are inadvertently running up large bills on their mobile phones. Essentially, they are subject to a scam.”

The number of complaints to RegTel reached a high of 13,000 in 2006 and diminished only when it downgraded many complaints to queries in subsequent annual reports.

The biggest concern last year was the number of consumers who denied having subscribed to expensive premium rate services.

Another 22,000 people contacted RegTel seeking advice on how to unsubscribe from such services.

RegTel itself uncovered almost 1,000 breaches of its code of practice for fixed-line services such as horoscopes, competitions and ringtones and more than 400 breaches in promotional and advertising materials. The organisation, which is funded by a levy on subscribers, made refunds totalling almost €200,000 to customers, while one company made a donation of nearly €100,000 to 11 charities.

RegTel has argued that the vast majority of service providers have operated within the industry code of practice, but admitted that the behaviour of a minority of firms was questionable and wayward. It also argued for a number of years that its hands were tied by a long-running court battle with one operator.

Last year, Irish people received 76 million chargeable premium texts, down 5 per cent on the previous year; each text cost an average 82 cent.