The main reason for consumers to seek refunds from a phone paid service in the UK is because of unexpected charges – unlike in other markets, where consumers tend to seek refunds because they were unhappy with a product or service.
So finds the UK’s Phone paid Services Authority (PSA), which has published research from market research agency Futuresight looking at attitudes and experiences of refunds for phone-paid services and was conducted using a mixture of quantitative and qualitative methods.
Across the sample, reasons for seeking refunds fall into three main categories: (i) an unknown and unexpected charge that is not believed to have been authorised or consented to, (ii) a known charge that is more than expected, or (iii) a known charge for goods or services that are not received or are deficient or defective in some way.
Phone-paid and non-phone-paid users share much in common when a charge is known and expected. Both audiences express similarly strong levels of confidence, high expectations, more know-how and certainty in the approach taken and greater success in obtaining a refund. This is particularly the case when the merchant is well-known and reputable.
Around half of phone-paid users in the sample encountered an unknown and unexpected charge on their phone bill or PAYG credit. This sub-group of phone- paid users stands apart significantly in terms of motivations, confidence, expectations, know-how, certainty and success in obtaining refunds.
For many of these phone-paid users, the barriers to obtaining a refund are particularly high, meaning that considerable effort, determination and, in many instances, the adjudication of the PSA, is needed to succeed.
Around half of all phone-paid refund seekers eventually received a full refund. Around a fifth got no refund and gave up. This compares with 77% and 7% of non-phone-paid refund seekers, respectively.
Between a third and a quarter of all phone-paid users thought claimed that they had fewer consumer rights compared to those for other payment methods. This is linked to limited or no familiarity at all with phone-paid as a payment method and considerable confusion regarding who is responsible for administering their refund.
Around half of all phone-paid users considered that their telephone- service provider was responsible (without really understanding why). This compares with 13% of non-phone-paid users who, for the most part, had a better understanding of why their payment provider was responsible.
Expectations among phone-paid users who had purchased unknowingly were also lower for the timeframe required to obtain a refund. Typically, a longer timeframe was anticipated, given uncertainty as to how the charge was taken and expected difficulty in disproving that they had consented to it.
Contact with the telephone service provider in the first instance is often driven by lack of awareness of the merchant and, in some cases, difficulty in contacting the merchant, or a presumption that the telephone service provider was responsible for the charge. This was considerably more so than for non-phone-paid refund seekers.
Many phone-paid users, particularly in an unknown context, contact their telephone service provider initially to seek help and advice. This is driven strongly by a lack of understanding and familiarity with their telephone service provider as a payment provider. Some felt that their telephone service provider should do more to make the merchant easy to identify and reach.
Non-phone-paid users’ first port of call is much more often with the merchant, given that the purchase is known and expectations of a proactive response are high. Compared to phone-paid, the respective roles and responsibility of the payment provider and merchant are typically much better understood.
Over two-thirds (68%) of telephone service providers declined to handle the refund, referring refund seekers instead to the Merchant, the PSA, or elsewhere. This compared with around a third (31%) of non-phone-paid payment providers.
Of the 32% of telephone service providers who handled the refund, around half took responsibility for the refund and the other offered the refund on behalf of the merchant, as a gesture of good will.
When in contact with the merchant, just under two-thirds (63%) of phone-paid refund seekers were either referred elsewhere, or responded in a way that led them to go elsewhere; either back to their telephone service provider or to the PSA. This compared with 93% of non-phone-paid refund seekers who were dealt with directly by the Merchant and not referred.