PSA Consults on Phone Subscription Services

The PSA is consulting on proposals to introduce new Special conditions for all phone-paid subscription services. This follows the review that commenced in September last year.

The proposals are intended to reduce consumer harm, build confidence in the market and support good growth. The consultation closes on 16 April 2019. You can view the consultation on the PSA website

The PSA is also publishing new research undertaken by market research agency Jigsaw, on what consumers expect when engaging with phone-paid subscription services – from discovery, signing up, using, and exiting a phone-paid subscription service.

Subscriptions have enormous potential as a growth area for phone-paid services. Major brands like Spotify have started offering phone-payment for subscriptions as a default payment option. Other music, video, film and TV streaming, books and other services are now also using or considering using phone-payment on a subscription basis.

However, 95% of complaints to the PSA over the last twelve months have been about subscription services. The reputation of phone-paid services is suffering as a result, and there are cases where PSA Tribunals have issued very substantial fines and prohibitions to non-compliant providers.

PSA recently commissioned research into consumer expectations of phone-paid subscriptions from Jigsaw, a market research agency. This research includes some interesting and significant findings.

  1. When purchasing a subscription, many consumers are not aware that phone payment is an option and therefore they may not know they are in a purchasing environment.
  2. They expect clarity in a payment process, to ensure that it is made clear what they are being charged for, how they will be charged, and that the payment is for a subscription.
  3. Consumers expect to see payment cues and friction that they are familiar with from other forms of digital payment, such as use of an account and password or a PIN number.
  4. Many consumers say that, provided the process is as secure and transparent as for other payment methods, subscriptions paid via a phone account can be a convenient option for accessing content.

With all of this in mind, the PSA is proposing changes to the regulatory framework for subscriptions to reduce consumer harm, build confidence in the market and support good growth. The proposals are aimed at ensuring that:

  • The process of discovering and signing up for subscription services is as clear as possible for consumers – including ensuring it is clear when a consumer is viewing promotional material and when they have entered a purchasing environment
  • There are multiple steps in the payment and sign-up process for recurring charges, so that consumers engage with the process and are fully aware of what they are signing up to
  • Consumers receive receipts that contain the relevant service information, in a manner more consistent with what they are used to from other forms of digital payment, to help ensure that consumers engage with these messages.

High complaint volumes, and the perception that operator billing is a vehicle for ‘scams’ are in no-one’s interests. PSA think that the proposals in the consultation document will address these issues: providing consumers with a payment experience that they understand and trust and helping to support growth of phone-paid subscriptions.

Do enter your email address and click on the subscribe button on top right to keep up to date with new posts.

Fightback Ninja Signature

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.