When: 24 April 2013
Where: United Kingdom
Law stated as at: 8 May 2013
PhonepayPlus (PPP) has decided to publish a second public consultation on a proposed prior permission regime for Information, Connection and/or Signposting Services (ICSS) following the initial consultation which closed in September 2012.
What is an ICSS?
PPP has defined ICSS as:
“Premium rate services, excluding full national directory enquiry services, that provide connection to specific organisations, businesses and/or services located or provided in the UK; and/or which provide information, advice, and/or assistance relating to such specific organisations, businesses and/or services.”
ICSS are usually promoted via search engines such as Google or Bing, and through classified ad websites such as Gumtree. PPP turned its attention to ICSS after receiving a significant number of complaints about such services, including from the public service and commercial organisations, with whose information services ICSS providers associate themselves. PPP has distinguished an ICSS from a Directory Enquiries service as follows:
Directory enquiries services
- Offer a comprehensive range of numbers and marketed as such;
- The consumer has to provide information about the number they are seeking to the provider during the operation of the service;
- Generally have strong brand awareness with consumers;
- Use the 118 number range which is well recognised by the public as a premium rate number.
Information, Connection and/or Signposting Services
- Offer information derived from, or advice or assistance in relation to, or connection/signposting to, a specific organisation and/or helpline and marketed as such;
- The consumer’s search for the number happens before the service is engaged (i.e. at the search engine or classified ads stage);
- Have no brand awareness with consumers – indeed consumers will probably not realise that these services exist.
The 2012 consultation
PPP launched a consultation in 2012 to consider whether there should be a prior permission regime in place for ICSS providers. The July 2012 consultation set out PPP’s concerns that ICSS could cause “significant consumer harm”, in particular by misleading consumers into believing that the premium rate number promoted to them is the actual number of the organisation they are seeking to dial. PPP therefore queried whether a fully informed consumer would derive the same value from an ICSS, given that the same organisation or information can be easy to access for free or at a significantly lower cost.
PPP was also concerned that ICSS which mislead consumers as to the entity behind the services offered would then also undermine consumer confidence in the organisations with which the ICSS implied association.
The July 2012 consultation set out proposals for prior permission conditions for ICSS, to address the following areas which PPP identified as causing, or having the potential to cause, consumer harm:
1. the use of Search Engine Marketing (SEM) to give a website advertising the ICSS greater prominence in search engine results than the website of the organisation the consumer is actually seeking to talk to;
2. the use of websites or other promotional tools such as classified ads, to mislead consumers into believing the ICSS number is the number they are actually looking for, or that the ICSS provides information which is not available elsewhere at a lower cost;
3. the lack of prominent and clear pricing information in a significant number of ICSS promotions;
4. the lack of an alert when a consumer calls an ICSS that informs them they are using a Premium Rate Service;
5. the potential for consumers to be held in a queue when connected via an ICSS (therefore increasing the cost of the call);
6. the undue delay caused to some consumers when an ICSS operator requests details which are irrelevant to the information or advice being provided; and
7. the requests by some ICSS for consumers to provide personal and/or confidential data such as account login details.
The consultation closed on 27 September 2012 and PPP received 20 responses which it described as being “broadly supportive” of its proposals. However, a number of ICSS providers, especially of ICSS which provide signposting and/or connection but not advice and/or assistance services, objected to PPP’s proposals with arguments that included the following:
• there is very little evidence of consumer harm with ICSS, and in particular call connection services, with relatively few complaints being received either by PPP or by the ICSS providers themselves;
• ICSS which provide call connection services meet a genuine consumer need that consumers are prepared to pay a premium rate for (as they cannot often find appropriate phone numbers on the websites of organisations they want to reach);
• ICSS which provide call connection are a cheaper form of directory enquiry (DQ) service and imposing prior permission requirements on them, but not on DQ services, is anti-competitive and would entrench the perceived “duopoly” of 118 118 and 118 500; and
• any harm caused by individual ICSS could be dealt with adequately through enforcement action under the PPP Code and a prior permission regime is not needed and would be disproportionate.
The 2013 consultation
As a result of the responses received to the 2012 consultation, PPP decided to engage an independent third party to conduct some further research into the ICSS sector to gain further quantitative and qualitative evidence relating to the user and public perception of ICSS and to understand the consumer experience of these services. In the light of the evidence collected as part of such research and PPP’s further consideration of the responses it received to the July 2012 consultation, PPP has announced it intends to continue with its proposal for a prior permission regime for ICSS. However PPP has proposed to make the following amendments to the prior permission proposals set out in the 2012 consultation:
1. a minor adjustment to the definition of ICSS to exclude only full national directory enquiry services, not all directory enquiry services, from the definition;
2. remove a previously proposed exemption from its prior permission requirements for registered charities (albeit registered charities will not be required to pay an application fee for prior permission); and
3. amend the prior permission conditions proposed in the original 2012 consultation to ensure enhanced transparency at each stage of the consumer purchase journey, but no longer require ICSS providers to give out for free the actual phone number of the organisation the consumer is seeking.
Why this matters:
All interested parties should respond to the consultation by the deadline of 5 June 2013. PPP have only provided six weeks for responses which is a shorter consultation period than they usually allow. They have declared this is due to the “pressing need to act on a matter where there is growing concern about the actual harm now being evidenced as generated by this service type” and because interested parties should already be up to speed on all the relevant issues due to the 2012 consultation.
If PPP goes ahead with introducing the proposed prior permission regime for ICSS, it believes the impact of this on ICSS providers will include:
• the requirement to pay a prior permission fee of £300 (which PPP considers to be negligible);
• the need to make changes to SEM and website communications when describing and promoting the services available (PPP does not feel this would cause further costs for providers seeing as many of the changes PPP would want to see as a result of its proposed prior permission conditions would be required anyway as a result of new rules introduced by Google Adwords); and
• the need to provide more detailed information to consumers about ICSS and their operators.
PPP has recognised that some of its proposed conditions could potentially reduce revenue for ICSS providers. However, they felt this was proportionate given the potential for consumers to be misled into believing they are contacting the actual organisation they are looking for (even to the extent of providing personal and/or confidential data to them) or that they are obtaining information, advice or assistance which cannot be obtained elsewhere at a lower cost and the potential risk to vulnerable consumers, both in terms of cost and any delay, where urgent advice is sought.
For these reasons and the risk such ICSS pose to the general reputation of organisations they are associated with and the Premium Rate Services sector as a whole, PPP is pushing forward with its plans so if ICSS operators don’t like this, they had better speak up quickly while they can.