Blog

10 August 2022: 
Join us at this industry forum for regulatory updates, a market presentation from Analysys Mason and discussion about the future of regulation with Ofcom.

 

The forum will take place in person at CCT Venues in 40 Bank Street, Canary Wharf, London, E14 5NR.

While it will be broadcasted live, we recommend attendance in person to allow for quality discussion. 

 

To attend in person, sign up here.

 

To attend online, sign up here.

 

 

The draft general permission proposes instead that receipts are sent to consumers at £10 spend intervals and 24 hours after the last consumer interaction where the £10 aggregate spend threshold is not reached. These proposals have been developed following pre-consultation with interested industry members.

The closing date for this consultation is Thursday 29 September 2022. 

Read the consultation document here.

The PSA Tribunal found that Surestream had been in breach of Code 14 Pricing and Transparency rules; the service pricing was determined to be unclear to consumers and the sign-up process was deemed misleading.

The PSA Tribunal issued a fine, required Surestream to remedy issues with the service, seek compliance advice, and offer refunds to eligible consumers. 

Users of the service can now claim a refund from Surestream. 

Read all details of this adjudication

The PSA opened the investigation based on complaints and the compliance record of a number of merchants operating through another intermediary and DMB. The investigation found that DMB had insufficient risk assessment and control in place in respect of an intermediary it contracted with.  

DMB have agreed to pay a fine of £250,000 and administrative costs, and submit to a compliance audit. 

See all details of this settlement 

Rationale

ICSS are the most complained about phone-paid service. In the last financial year, PSA received 451 complaints from consumers about ICSS, out of a total of 2,025 received. While the number of complaints received by PSA about all phone-paid services has dropped significantly in recent years, ICSS complaints have remained stubbornly high.

We are concerned that there continues to be widespread consumer detriment and confusion in the market. PSA introduced new rules in the form of Special conditions in 2019 to ensure ICSS were marketed accurately, entirely clear that they were a third-party service and transparent about the costs involved. Despite this, data provided to us by parties under investigation suggests that the consumer experience of ICSS can still be poor and there may still be persistent consumer confusion. Significant numbers of callers in such instances either choose not to proceed with a call after hearing an IVR or are cut off mid call and often redial.

We believe ICSS may be the cause of disproportionate levels of consumer harm. The Annual Market Review (AMR), conducted for PSA by Analysys Mason, estimates that ICSS account for less than 5% of consumer spend in the phone-paid services market. Despite this, over 20% of the complaints received by PSA from consumers relate to ICSS. Analysis of our complaints suggests that the average financial detriment suffered by complainants is £88.

ICSS have featured prominently in our enforcement activity. In the last two financial years, 19 of the 44 cases allocated by PSA to enforcement activity have involved ICSS (excluding breach of sanctions and prohibition cases, i.e. secondary enforcement activities). This also suggests that non-compliance remains a major market issue.

Review scope

We are seeking to better understand the consumer experience and detriment in relation to ICSS and levels of non-compliance by providers in the market to assess whether further regulatory action is necessary.

In order to do this, we are seeking to:

• accurately size the ICSS market in terms of revenue and consumer engagement
• understand the consumer experience of services, including (but not limited to) user numbers, what organisations consumers are being connected to (or seeking to be connected to), the cost of calls and call duration and the information that is provided to consumers when engaging with these services
• assess complaints in the market.

As part of this, we will be seeking revenue, transactional, marketing, complaint and client list data from relevant parties. We consider relevant parties to be any market participant involved the provision of ICSS, whether merchant, intermediary or network.

Timings

Relevant parties will be contacted as part of this review in the coming weeks. Where we require information or data from providers, we will set out the reasoning for this, the Code basis for the request and the deadline for any submission. Failure to comply with a request may result in regulatory action.

We aim to publish summary findings, detailing any recommendations for regulatory actions should they be necessary, later in the calendar year.

Notes

1. What are thematic reviews?
A thematic review is a compliance monitoring activity, carried out  using compliance methods set out in the Code, to explore potential issues regarding compliance with the Code or consumer harm in the wider PRS market or sectors (as opposed to issues related to a particular provider or service). Thematic reviews are detailed at Sections 4.2 and 4.3 in the Code of Practice and from paragraph 95 to 98 of the Procedures.

2. What are ICSS?
Information, Connection and Sign-posting Services (ICSS) are third party services that connect consumers to other organisations contact or customer service number, which are often well-known. ICSS generally operate on non-geographic number ranges, be that 09, 087 or 084.

3. Regulatory action to date
PSA and Ofcom have introduced a range of regulatory policy and enforcement actions in relation to ICSS in recent years. In 2019, Ofcom broadened the scope of Controlled Premium Rate Services Condition to include all ICSS regardless of the number range they are operated on.

PSA introduced new Special conditions for ICSS in 2019, which strengthened the rules for such services. These rules were incorporated into the Code with the introduction of the latest version of the Code of Practice (15^th), which came into effect in April 2022.

In the last five financial years, the PSA Code Adjudication Panel has adjudicated against 8 ICSS providers, levying fines of £3.23m in total.

4. Relevant research
PSA has commissioned consumer research into ICSS in the past. In 2018, PSA published research conducted by the University of Nottingham into consumer behaviour and ICSS, which looked at how consumers responded to ICSS.

In 2012, PSA published quantitative and qualitative research from Jigsaw into consumer views of ICSS.

PSA’s Annual Market Review also contains quantitative analysis of consumer engagement with and attitudes towards all phone-paid services, including ICSS. The latest iteration of the AMR will be published in August of this year.

All research is available here.

5. Enquiries about the review should be directed to supervision@psauthority.org.uk.

The Chairman, David Edmonds said:

“The work of the PSA in recent years has reduced risks to consumer to historically low levels. We introduced in April this year a new set of regulations which further protect consumers. And the industry – both phone companies and service providers – is increasingly conscious of its own responsibility to ensure dubious services are not operated. Complaints to the PSA are down by over 90%. We are also conscious of market trends and as a result the Board decided that future regulation of an industry increasingly dominated by larger players would be better served by an organisation with the capacity and breadth of Ofcom rather than a free-standing body. We already work closely with Ofcom who designate the PSA to deliver the day-to-day regulation of the market, by approving our Code of Practice. We look forward to working with them on this transition.”

This proposed transfer of regulatory responsibilities has been approved by the Ofcom board. The Department for Digital, Culture, Media and Sport (DCMS) have also agreed for in-depth discussions to continue, meaning a programme of work will begin to effect this change. This will include a statutory process and related consultation later this year, and be subject to final approval from DCMS. 

We anticipate that Ofcom will assume responsibility for regulation in the second half of 2023, with PSA staff transferring to Ofcom. Ofcom will look to retain the key components of Code 15 to continue effective regulation in the consumer interest.  

PSA regulation and Code 15 will remain in place until the transfer. We will provide further progress updates throughout the period. 

Get ready for Code 15 – industry webinar on Standards
25 January 2022, 10:00 – 11:30

We’re holding a webinar on the Code Standards to support you to be compliant. Join us to learn more about the consumer facing and organisational Standards that come with Code 15. We’ll focus on issues you picked up in both the Code and Guidance consultations.

For those who couldn’t attend, here are the presentation and the video recording of the webinar.

Get ready for Code 15 – industry webinar on Supervision
9 February 2022, 10:00 – 11:30

We’re holding a webinar on our approach to Supervision. This will focus on how we intend to work with you to identify and mitigate market and consumer risk. This webinar is intended for networks, intermediaries and larger merchants.

For those who couldn’t attend, here are the presentation and the video recording of the webinar.

Get ready for Code 15 – industry webinar on Engagement and Enforcement
22 February 2022, 10:00 – 11:30

We’re holding a webinar on our new approach to Engagement and Enforcement. We’ll take you through the two approaches, some of the significant changes we’ve made in this area and some of the factors we will consider in our decision-making. This webinar is suitable for anyone interested in our approach to enforcement.

For those who couldn’t attend, here are the presentation and the video recording of the webinar.

Today, the PSA formally launces the 15th Code of Practice. Code 15 represents a significant shift in regulation. Through Code 15, the PSA intend to raise standards in the market, prevent harm in the first place, enable simpler compliance and, where necessary, enforce smarter. 

Today, the PSA are also launching a number of changes to the website to help industry stay compliant: 

1. Integrated Guidance with the Code. Code 15 is intended to be easier to comply with
As part of this, there is a fully interactive version of the Code online, with relevant Guidance integrated within it. So, if for example you’re looking at the Transparency Standard, you’ll find relevant sections of the Guidance alongside the Standard. 

	We’ve integrated relevant Guidance into the interactive Code so it’s easier to navigate. Look out for the yellow Guidance-tagged dropdowns.

The full range of Code and Guidance documents is available to download as pdf as well.

2. Updated Registration systems.
Networks, intermediaries and merchants are now required to provide contacts details of individuals responsible for certain aspects of compliance. For example, intermediaries need to provide contact details of the person with primary responsibility for due diligence, risk assessment and control. There are dedicated fields in the system for providers to do this. 

	You are now required to provide more information at registration.

Providers are required to update this information as soon as possible. There is a registration help guide here you can email the registration team should you need assistance. 

3. Changed the Adjudications section of our website to Regulatory decisions  
In the interest of transparency and good regulation, the adjudications sections of the website has been expanded to include further information about existing Enforcement activities. Tribunals outcomes will continue to be published here. In addition, Warning Letters and Action plans will be published here where it is considered necessary and proportionate, and where relevant providers have had the opportunity to make representations.

A list of newly opened Enforcement cases (which includes prohibitions cases for named individuals) will also be published here. By the end of the April, we intend to backdate this list to include ongoing and existing Code 14 Track 2 cases as these will now follow Code 15 Procedures. The Regulatory decisions section of the website can be found from the main menu. 

	Changed the ‘Adjudications’ section of our website to ‘Regulatory decisions’.

4. Improved our Due Diligence Reports

Due Diligence Reports have been broadened to enable more effective risk assessment. Reports will now include: 

• allocated Enforcement cases
• adjudications and settlements  
• prohibitions  
• bars
• outcomes of Engagement process, including Warning Letters and Action Plans, where appropriate 
• information about active phone-paid services 
• information about responsible persons and their related organisations histories.  

For more information about the Code, see the dedicated pages on the website. There are also recordings of the Code 15 industry seminars online In addition, providers can email our compliance team if they have questions about your requirements, need clarification or want to discuss tailoring regulation in the interest of consumers. 

The business plan sets out our main priority for the year: delivering the new 15th Code of Practice, which comes into effect on 5 April 2022.

The PSA budget is £3,727,219, which represents a 5% saving in cash terms and 12% saving in real terms.  

You can view the finalised Business plan and budget for 2022/23 here and the consultation statement here.

Responses to the consultation can be viewed here:

Action 4

aimm

BT

Paul Muggleton

Telecom2

Virgin Media O2

Vodafone

Administrative charges are applied to Enforcement cases that have been adjudicated on.

The administrative charges that will apply from 5 April 2022 are as follows:

Hourly Executive rates
Investigations Executive		£ 135
In-house Counsel		£ 170
Market Intelligence		£ 95
Fixed executive rates
Investigations Oversight Panel		£ 440
Code Application Panel (CAP) & other panels
Tribunal hearing		£ 4,200
Single Legally Qualified CAP Member Hearing		£ 1,400
Oral Hearing – half day		£ 2,485
Oral Hearing – full day		£ 4,970
Interim hearing withhold		£ 925
Interim hearing suspension		£ 925
Review of interim measures		£ 925
Application for review (application fee only)		£ 420