Phone-paid Services Authority helps clarify ‘service’ v ‘marketing’ messages

Who: Phone-paid Services Authority

Where: United Kingdom

When: 16 January 2017

Law stated as at: March 2017

What happened:

The Phone-paid Services Authority (PSA) is the body that regulates premium rate phone numbers in the UK (this body may be known to some Marketinglaw readers under its former names of Phonepayplus and, going back even further, ICTSIS).

The PSA has, this January, issued guidance for premium rate services which send text messages to consumers for them to confirm purchases, by entering a number into a website which does not contain pricing and other relevant information.  The PSA strongly recommends that such messages should include:

1. the context in which the message has been sent;
2. clear pricing information;
3. the name of the provider operating the service and contact details; and
4. any other key factual information likely to influence the consumer’s decision to enter into the transaction.

The PSA also highlights what it perceives to be certain requirements linked to the law as set out in PECR, as follows:

1. no response to such a message does not equal consent for further contact;
2. further messages should not be sent to a customer who does not respond, as this will likely be construed as marketing;
3. when a sign-up is not completed, data related to the sign-up should not be retained or used; and
4. any provider receiving complaints about unsolicited marketing should re-assess their approach.

Background to the guidance.

It had come to the PSA’s attention that one issue that has caused uncertainty for some premium number companies has been how much information they may legally include within text messages when seeking confirmation of a customer signing up to a service on a website. In particular, some providers had not been including the cost of the service, the name of the service or other key information.

Under the PSA code, consumers must be fully and clearly informed of all information likely to influence the decision to purchase, including the cost, before any purchase is made. While this information could be provided on the website that advertises the service, there has been a growth in sign-up being available via “co-registration” sites.  These often offer a range of different providers’ services, so may not be owned by the premium rate service provider itself.  Such sites may not feature this type of information and it may be more practical for providers to include this information in a SMS message requesting confirmation.

However, it had become apparent to the PSA that some providers were concerned that by providing such information, they may be falling foul of the laws in the Privacy and Electronic Communications (EC Directive) Regulations 2003 (as amended) (“PECR”).  The text message marketing rules in PECR prohibit the sending of unsolicited direct marketing via SMS messages, unless the recipient has given prior consent.

What was reportedly concerning the providers was that, by including specific details on the service in such automated requests for confirmation, these would risk qualifying as direct marketing. This would particularly arise in instances where a website visitor had entered someone else’s mobile phone number on the website.

The PSA has therefore prepared guidance on this point in consultation with the Information Commissioner’s Office (“ICO”) which enforces PECR.  The guidance reflects the following conclusions:

1. The ICO recognises that the purpose of such text messages is to confirm the terms of contract that a consumer is entering into, and is therefore of the (general) view that such messages are more akin to service messages than promotions. This is not a blanket permission though and such messages will be assessed by the ICO on a case by case basis. Messages which stray into marketing-type activities or wording will therefore still need to be carefully avoided.
2. Bearing the above in mind, the PSA’s guidance is that where text messages are used to seek final confirmation of website purchases of premium rate services, the PSA will expect these text messages to clearly inform consumers of the pricing and other key information.
3. The PSA makes clear that such wording should (a) be factual; (b) make clear that it is the confirmatory step for an online purchase; and (c) deliver only key service information (i.e. no promotion of additional products/services).

Why this matters:

This guidance has been prepared by the PSA in conjunction with the ICO, and it therefore provides a useful indication for the premium phone number industry as to what is expected of it when obtaining sign-ups via SMS.

In particular, the input from the ICO which indicates that – dependent on context – it may be minded to consider sign-up confirmation requests via SMS as “service messages” is useful.   The guidelines around this should give some comfort to such operators as to how they can include information that is a requirement under the PSA Regulations and, in some cases, PECR and the CAP Code, in a manner that is itself unlikely to be a breach of PECR.

The PSA guidance is available here: