Following the judicial review of the regulator, things are going to have to change at PhonePay Plus (PPP) – but what is that change likely to look like? Rory Maguire, Managing Director of AIME, offers his view
Anyone attending the PhonepayPlus forum on 30th April who had missed the last forum would be forgiven for thinking that someone had kidnapped their senior management and sent in body doubles, as the opening presentations from Jo Prowse and Andrew Pinder reflected a sea change in the stance towards the broad industry and indicated strongly and positively, their post-Judicial Review tactical direction that stunned the 150 strong industry audience into silence.
Certainly a humble PhonepayPlus with a lot of lessons learnt recently and a lot of industry pressure for reform in many areas – not least from AIME – but a wiser, stronger and more collaborative regulator is emerging as a result.
Regulatory reform has been clearly needed since 2013 and we have witnessed operational changes – mainly occurring in the background: under the leadership of Prowse. We have also received in private, verbal commitments for changes to come, but the future direction was really made public for the first time at the Forum, nearly two years on since the moment in time in 2013 after the use of emergency procedures against multiple companies, that became the catalyst for change.
Central to the announced direction are a full review of Part 4 (Investigations, Procedures and Sanctions) of the PhonepayPlus Code of Practice, a review of the independence of the Code Compliance Panel (plus other areas such as more legally robust procedures and reliance on skilled resources) and a review of the sanctions guide and administrative charges.
The reviews should ensure that while the regulatory role is not undermined, investigations into services that are causing (or may cause) consumer detriment is treated proportionally, fairly and with the rights (human and legal) of the providers businesses as well as the consumers taken into consideration.
There is no doubt that premium rate regulation is more complex than most. This is the only regulatory area that the promotion, payment, product and post-sales support fall under the same umbrella and thus the rule set feels complex for a merchant currently using credit or debit card payments and wishing to utilise Charge to Mobile as an addition. To grow the opportunities, we need to assure digital and voice merchants that they have business surety of predictable outcomes if the complex rule set is inadvertently breached. After all, 3000 other companies use premium rate successfully.
Industry also needs the assurance that damaging practices applied by a small subset of companies and individuals are dealt with swiftly and effectively to ensure continuation of a level competitive playing field and to remove the reputational damage that can be caused by deliberate scams infrequent though they are.
The operating environment for digital content and services is also complex. The rapid adoption by active consumers of smartphones and internet access moved consumer services into the internet where they are discovered through an alternative ecosystem of advertising and promotional markets. While providers adapt to new and emerging marketing techniques they also need to gain a rapid understanding of the risks created by rogue affiliates, underhand advertising practices deployed by others and consumer journeys that commence in the dark corners of the internet.
This complexity requires a fleet-of-foot understanding by the regulator that can only come from working closely with the industry that is experienced with the opportunities and the potential issues.
The tests of the new industry collaborative approach by PhonepayPlus was the recent exercise of an AIME initiative to create a rapid response team of relevant expertise who can gather to discuss emerging issues. Consumers were being forced off their chosen mobile website onto inappropriate promotions by advertising intermediaries acting without the advertiser’s authority. The issue, once identified and a resolution plan agreed, has been placed back into the hands of the advertisers to work with the agencies and bar the practice. This did not need a regulatory response, but set in motion a resolution for an emerging consumer issue.
We believe that PhonepayPlus is now on a path that is committed to working closer with the industry, while still maintaining its consumer protection role and without compromising its independence. Reform requires a huge amount of activity and we hope that both the outgoing and incoming chairs provide the moral support to the Executive to achieve this. Regulating on an even keel is a tough nut to crack.
