New rules for phone-paid subscription services

Regulatory /

The Phone-paid Services Authority (PSA) introduced new rules for Phone-paid subscription services which came into effect on the 1st November 2019.

These new rules will affect all types of phone-paid services that make a recurring charge to an end user’s phone bill.

The new rules and requirements are intended to raise standards and to meet end user’s expectations.

What are phone-paid subscription services?

Also known as a 'Reverse Billed SMS', the recipient is charged for each SMS they receive. There are a wide range of subscription services that use this billing method; downloaded apps, fitness advice, weather updates, horoscopes and much more.

With some services costing as much as £4.50 a week, it's important that the bill payer is aware of these charges.

These rules coming into force are due to consumers having no knowledge of the premium rate service until they check their bills.

What has changed?

Service providers will need to comply with three significant changes to the existing rules.

Failure to comply with the new rules will mean that the service provider will be in breach of the Code of Practice, and subject to significant fines and sanctions.

The three major changes are:

  • Two-stage sign-up process: Service providers will need to ensure that there is a two-stage sign-up process in place. The first stage must use an ‘opt-in’ process using an account and password, a PIN or a Mobile Originating SMS. The second stage asks for confirmation of the ‘opt-in’.
  • Improved clarity: Service providers must ensure that the end user is aware that they are signing up to a phone-paid subscription service.
  • A receipt: Service providers must send some form of a receipt after each charge to the end user’s phone bill.

Many existing phone-paid subscription services already meet the new requirements, but the new rules are designed to remove confusion and offer more clarity to service providers.

More importantly, the new rules should prevent deliberate attempts to confuse end-users and accidental sign-ups.

Help for Service Providers

If you are providing phone-paid subscription services, you need to comply with these new rules.

To ensure you are compliant, we recommend that you use the PSA’s free compliance advice service.

About the Phone-paid Services Authority

The Phone-paid Services Authority (PSA) is the UK regulator for content, goods and services that are charged to a phone bill, otherwise known as Phone-paid services.

Phone-paid services are the goods and services that you can purchase by charging the cost to your phone bill or pre-pay account. They include charity donations by text, directory enquiries, voting on TV talent shows and in-app purchases.

In law, phone-paid services are referred to as premium rate services.

For more information, please visit the PSA’s Website.

Mark Burcher