Competitions are the life blood of telemedia and its time to stop faffing about with too much regulation making it hard to actually do anything, isn’t it time for a new approach, says Declan Pettit, Director, Monitoring Compliance Partners
When I first dipped my toe into the premium rate industry in 2000, I remember having a chat with a colleague along the lines of: ‘why would anyone who is not drunk – or in some other way struggling with their mental faculties – pay money to enter a competition.’
And yet here we are 15 years later…
The simple truth is that if there is an appetite in the market for something, the supply will follow. So why is there an appetite? Another colleague some years ago proffered: “To survive in this industry, you need to satisfy one of four needs: lust, vanity, knowledge or greed”. So lotteries, prize draw or competitions, whatever the format (normally the latter) appeals to our innate nature to want more and chance our arm. I haven’t discovered the origins of the universe there, I’m sure you’ll agree.
What does provide something of a conundrum for me is why the provision of such services continues to cause so much kafuffle in our industry?
Regulation discussions around Consumer Contract Regulations (CCR – and its applicability to Competition Subscriptions), MNO moves to tighten Payforit rules, PPP’s initiatives around Special Conditions…new rules for unsubscribing inactive users after 120 days…. I’m exhausted even listing them.
There is more time spent on meetings/white papers discussing the regulatory aspects of Competition Subscriptions (surpassing even the machinations of the Adult sector) than there is on new product development and marketing initiatives.
Consumers complain. The number of complaints increases in line with the number of consumers. It’s a simple formula which we all learned at school: x + y = z therefore 2x +2y = 2z. Add to this the propensity for this target market to shout ‘refund’ at any given opportunity, and the backdrop to this issue comes clearer.
This is not to say we don’t have some ‘supplier’ issues. Misleading marketing practices, consumer confusion on ‘co-registration’ sites, pricing prominence on merchant page and regularity of prizes…being the main ones.
Here in the UK, we need to take the lead from the Germans regarding their approach to regulating this sector: light touch at the front end and heavy hand at the back end.
The words of the great 7th century Muslim Caliph resonate: “I apply neither my sword when my lash suffices, nor my lash when my tongue suffices. And even if but one hair is binding me to my fellow men, I don’t let it break. When they pull, I loosen, if they loosen, I pull”.
Taking the core CCR principals, the merchant needs to prove that the consumer:
1. Visited their site
2. Were shown relevant terms before purchase
3. Positively opted-in
4. Had (and still has) access to all contract terms
5. Were given cancellation option.
The Payment Services Provider needs to ensure that they carry out DDRC (Due Diligence and Risk Control) on the merchants and that the merchants carry out proper DDRC on their marketing affiliates.
MNOs need to square off the brand v revenue debate vis a vis competition subscriptions. Are you in or out? They need to embrace all mobile payment mechanics to encourage innovation and then promote them generically to their customers (unrecognised items on statements…etc.) Finally they need to ensure their customer service depts are trained to handle PRS queries rather than fobbing them off to the Regulator.
PhonePayPlus need to continue to work with industry players –through the good offices of AIME. They need to continue to promote their ‘Principles’ based code and start working with other regulatory bodies that touch the PRS industry – like ASA and FCA. Also, they need to help industry debunk the myth propagated in the press that competitions are foisted upon the unsuspecting consumer by shady people up to no good.
As part of my role at Monitoring and Compliance Partners (MCP), I deal with these guys everyday – the vast majority of which are professional companies (in some cases employing hundreds of people) satisfying consumer demand. It also behoves them to satisfy the myriad demands of an over-regulated marketplace.
Checks and balances within a core framework of rules, supported by a number of mutually agreed initiatives are the best way to further protect the consumer (and the merchants) moving forward. A couple of examples of such initiatives include;
• Age Inappropriate Scanner (AIS), utilising MCP’s Veriscanner product, which tracks marketing flows to ensure advertising banners are not placed on children sites/apps. Safari Mobile has been at the forefront of this project and is already bearing fruit.
• There is also Industry wide support to agree a ‘minimum acceptable standard’ template for competition subscriptions using MCP’s GoVerifyit product (which records/stores not only the consumer opt-in but also what they saw prior to consent.
If demand for these competitions remains high and Industry invest in a more self-regulatory approach– then there are at least another 15 good years ahead for the Competition sector.