The UK’s premium rate telephone line regulator has updated its “Privacy and consent to charge” guidance. The focus of the changes is the issue of consent in the context of marketing PRS. But is everything as clear as it should be as to the basis for PPP’s approach to “soft opt-in”? Stephen Groom reports.
When: May 2012
Law stated as at: 12 June 2012
Premium-rate telephone service ("PRS") regulator PhonepayPlus ("PPP") issued a "Compliance update on clarifications to its General Guidance Note on Privacy and Consent to Charge" (their description not the author's).
By way of background, PPP recently made a radical change to its regulatory architecture. It dumped its detailed Code and replaced it with an "outcomes- based" Code of Practice ("Code").
Following what seems to be very much a growing trend, the new Code's structure is based on various "outcomes", each followed by Rules relating to that outcome.
Then there are further aids to compliance with the Code in the form of over 20 "Individual Guidance Notes" focusing on areas such as Directory enquiry services, Betting tipster services and, of relevance in this case, "Privacy and consent to charge".
So much for simpler regulation!
Update to Guidance on rule to help achieve Code outcome
The recent update to the "General Guidance Note on Privacy and consent to charge" ("GNP"), effective immediately, relates to Rule 2.4.2 of the Code. The relevant area of activity is making contact with consumers, including contacts made in order to market PRS.
All the rules at 2.4 of the Code are designed to help achieve the following Outcome:
"That premium rate services do not cause the unreasonable invasion of consumers' privacy".
Rule 2.4.2 itself reads:
"Consumers must not be contacted without their consent and whenever a consumer is contacted the consumer must be provided with an opportunity to withdraw their consent. If consent is withdrawn the consumer must not be contacted thereafter. Where contact with consumers is made as a result of information collected from a premium rate service, the Level 2 provider of that service must be able to provide evidence which establishes that consent."
Part Five of the Code defines a "Level 2 provider" as "the person who controls or is responsible for the operation, content and promotion of the relevant premium rate service and/or the use of a facility within the premium rate service."
Queries about the consent provisions of the Guidance
If you are still with us, apparently PPP has received a number of queries about the effect of 2.4.2 on direct marketing activity promoting PRS.
The questions related to the way in which "consent" is defined within 2.4.2, particularly as to whether the definition includes the practice of "soft opt-in" as defined in the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECRs).
No more information is provided as to the nature of the queries, but be that as it may, the upshot is that changes have been made to the parts of the GNP that relate to the provisions on consent in the PECRs and particularly those provisions relating to so-called "soft opt-in".
Soft opt in applies to all marketing of PRS?
The words "Soft opt-in" do not feature in the PECRs, but they have become known as referring to the obtaining of consent ( for future marketing by email or SMS) in the course of the sale or negotiations for the sale of a product or service (Regulation 22 (3) of the PECRs).
The word "soft" is used because in this context, failure to opt out will suffice to deliver consent, rather than a positive opt-in. However this will only work for the future marketing of similar products or services by the organisation that captured the email address or mobile number in the first place.
Returning to the GNP changes, these are intended to clarify PPP's position in this area. PPP says it did not consult on these changes before introducing them because they do not substantively alter the GNP and do not place any additional burden on providers.
There are six changes as set out in the table below.
|Reading in current Guidance Note
Reading in new Guidance Note
|PECR’s principles (which are applied more generally to all marketing relating to a premium rate service) are that:
PECR’s provisions on consent (which apply to all marketing relating to a premium rate service by virtue of rule 2.1 of the Code) in summary are that: [4.3 then goes on to describe the provisions of paragraph 22 of the PECRs dealing with consent and so-called "soft opt-in" consent for email and SMS marketing]
|4.3 (second bullet point)
Soft opt-in marketing materials only concern similar products to the individual’s initial purchase, or area of interest (e.g. it would not be appropriate to promote adult services to someone who had only previously purchased ringtones);
|Soft opt-in marketing materials must relate to that marketer’s products or services and only concern similar products to the individual’s initial purchase, or area of interest (e.g. it would not be appropriate to promote adult services to someone who had only previously purchased ringtones);
|4.3 (third bullet point)
|Consumers who have given soft opt-in permissions must be given a simple means of opting out at the time of initial purchase, and in each subsequent promotion; and (…)
Soft opt-in consumers must be given a simple means of opting out at the time of initial purchase, and in each subsequent promotion; and (…)
|4.3 (fourth bullet point)
|Where the individual’s details are to be passed to third parties, they must be clearly informed of this, and positively confirm their acceptance (a practice known as ‘hard’ opt-in).
Where soft opt-in conditions are not met a positive action signifying consent must be obtained from consumers after clear information about the intended activity has been provided. For example, where the individual’s details are to be passed to third parties, they must be clearly informed of this, and positively confirm their acceptance (a practice known as ‘hard’ opt-in).
|While it is not mandatory to use hard opt-in for consent to marketing which is not from third parties, hard opt-in can also be used in this way.
While it is not mandatory to use hard opt-in for consent to marketing which is not from third parties (i.e. where soft opt-in applies), providers can also seek hard opt-in consent.
|Previously did not exist
In respect of rule 2.4.2, whilst the Code does not itself define consent, we consider that the soft opt-in practice, where it complies with paragraph 22 (3) of PECR (as explained in the bullets above), will be an acceptable form of consent. Providers should note that rule 2.4.2 contains additional requirements relating to marketing that must be satisfied where relevant.
|Verifying consent for soft and hard opt-in
|Verifying consent for soft and hard opt-in for the purposes of PECR and rule 2.4.2 of the Code
Why this matters:
We have a concern about 4.3 of the GNP.
It effectively provides that the "soft opt-in" provisions of the PECRs apply to ALL marketing of premium rate services, whereas as a matter of law these only feature at para 22 (3) and only relate to direct marketing by email or SMS. Similarly the CAP Code only applies "soft opt-in" principles to email and text marketing.
On what basis have these requirements been extended to, for instance marketing of PRS by telephone or direct mail? It is not clear.
The new 4.3 refers to the
"PECR’s provisions on consent (which apply to all marketing relating to a premium rate service by virtue of rule 2.1 of the Code)".
But rule 2.1 of the Code only confirms that all PRS must comply with the law. It does not state that for the purposes of marketing of PRS, the soft opt in provisions of para 22 (3) of the PECRs are specially extended from email and SMS marketing to ALL types of marketing.
So has this clarification missed the elephant in the room by failing to explain why marketing of PRS marketing should get this special regulatory treatment? We think we should be told.
The PPP announcement is here.