Telcos Face Fines Over Premium Service

Consumers will not be billed for premium SMS and MMS from suspect mobile premium service providers under new rules introduced by the Australian Communications and Media Authority (ACMA).


Consumers will not be billed for premium SMS and MMS from suspect mobile premium service providers under new rules introduced by the Australian Communications and Media Authority (ACMA).

It will now be an offence for mobile phone companies to contract with content suppliers who are not listed on an industry register. From 3 November 2010, the ACMA will also be able to issue a temporary Do Not Bill order to stop suspect content suppliers from charging customers while it investigates a service.

The rules are the latest in a package of measures dealing with consumer concerns about the unexpected costs of some SMS and MMS services.

‘This will be the toughest sanction the ACMA will be able to impose against premium SMS and MMS providers who break the rules,’ said ACMA Chairman Chris Chapman. ‘It cuts straight to the heart of industry’s rogue element by drying up their revenue stream.’

A final order preventing a company from charging for up to three years can be made where a content service provider is found to have breached the Mobile Premium Service Code in a way that causes significant financial harm to consumers.

The new rules build on the recently implemented mobile premium services regulatory package. This includes the capacity for mobile phone users who do not wish to use any premium SMS and MMS to request their mobile phone company to bar these services and an industry-developed Mobile Premium Services Code.

The code sets out detailed rules covering procedures for subscribing to premium SMS services; the banning of advertisements targeted at children under 15; how advertisements (and charges) are displayed; and complaints handling obligations.

A key feature of the code is a ‘double opt-in’ requirement. A prospective customer has to give two independent confirmations of a request before they can subscribe to an ongoing premium SMS service.

The ACMA has already taken action against several service providers for breaches of the code.

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