Sunday, May 19, 2024

    GUEST OPINION PSA’s regulatory framework and special conditions

    Jo Prowse Telemedia readers will have noticed that The Phone-paid Services Authority (PSA) published a number of documents last week, including statements on its regulatory framework consultation and on special conditions for online competition and online adult services. Here Jo Prowse, CEO of PSA, explains what it means

    Our goal is simple: to protect consumers from harm, to ensure consumers are willingly purchasing services and to encourage competition and growth in the market for their benefit In doing this, our regulatory framework statement aims to provide industry with clarity and consistency in our approach to regulating phone-paid services. It sets out how exemptions from the Code can be sought, how we will assess higher risk services, and considers opportunities for greater collaboration in monitoring and when engaging with other regulators.

    We want to reduce regulatory burdens wherever possible. This is consistent with the principle of proportionality – only imposing regulation where it is necessary to promote the interests of consumers. Where we can reduce requirements, we hope that will promote growth within the phone-paid services sector and allow it to compete with other payment options. That’s competition in the interest of consumers and industry. The Code already allows for exemptions from provisions where an objective behind such provisions can be satisfied by other means, and we have sought to make the process of seeking such exemptions easier and more transparent.

    On the flipside, we have developed an objective approach to determining risk. The risk assessment framework sets out six separate risk characteristics which will be used to determine whether a service category would be considered to be higher-risk. Any service type that we believe is causing, or has the potential to cause, a significant level of consumer harm, will be tested against this framework. Following such testing, if we believe a service type is higher risk, we will assess how this should be mitigated. We believe this provides the clarity and consistency that industry have asked for as well as linking the identified risk to consumers with any necessary regulatory intervention.

    Special conditions for online competition and online adult services

    Where there is evidence that services are presenting higher risk to consumers, the special conditions framework allow us to set further requirements aimed at controlling those risks and assist providers in meeting outcomes of the Code.

    Online competition services and online adult services have been the two service types we have assessed the most complaints about for some time now, and in some cases lead to enforcement action. This for us has been clear evidence of actual and potential consumer harm and so we tested these two service types against the risk framework with a view to assessing whether additional regulatory requirements were necessary. Likewise, independent research and feedback from stakeholders suggests the consumer experience of these services needs to improve.

    Following consultation with stakeholders and detailed consideration of responses, we published a finalised set of special conditions last week. These new requirements aim to provide greater clarity for consumers at the point of purchase and throughout the consumer journey. We believe these will improve consumer understanding of these services and consumer confidence in phone-paid services. These will come into effect on January 4th.

    Some of you will have noticed that we have removed some of the requirements from our original proposals, in response to the feedback we received. For example, we have temporarily withdrawn prescriptive requirements around the opt-out mechanism (STOP). We remain keen to make the opt-out mechanism work better for consumers but well-reasoned concerns were raised with us over the cost and technicalities of our current proposals.

    We concluded that more work was required on these proposals to ensure that they would be effective and we want to continue to work with industry to develop solutions that can be put in place as soon as possible.

    However, we saw no reason not to introduce the other measures at this time as we expect they will benefit consumers by improving clarity for consumers and compliance with our Code.

    We will monitor compliance with and the impact of the new conditions once they are in place. We look forward to continuing to work with industry to maintain market compliance, ensure consumer confidence and, therefore, support market growth.


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