Waspa refines fine print for content provision in South Africa
The Wireless Application Service Providers Association (Waspa) recently issued an updated version of its code of conduct, with detailed guidelines on advertising, billing and reminder messages relating to subscription services. This comes as complaints about content services continue, despite previous specifications regulating how they interact with customers.
Revisions to the code include the specific amount content providers can charge to an account before they have to contact the customer for permission to continue, which changed from R200 to R300.
Another provision adds that when the total cost of any service reaches R400 or any multiple of R200 thereafter, additional notification must be sent to the customer, informing them of the total costs incurred.
Guidelines for promotional material and billing information were tightened and more extensive instructions for reminder messages are included. There are also revisions regarding the time it takes for users to be unsubscribed, with Waspa members now being compelled to unsubscribe consumers within two working days of the request being lodged with Waspa.
These changes address various problems users face, as many still request what they think is a once-off application, such as a ringtone, only to find they are being billed on an ongoing basis.
When Jana Goussard saw an advert on TV for a ringtone she liked, she SMSed a keyword to the code advertised. “All it said in the ad was that an SMS would cost around R5. I am on a top-up contract where I receive R135 per month; for six months I could not understand why my phone money was getting low so quickly, especially since I don't phone a lot and mostly SMS.”
Goussard discovered that by SMSing the number for the ringtone, she had signed up for a subscription service that charged her R20 per week. “I SMSed STOP to the number and [they] stopped taking my money... I was and am still very upset about it.”
BulkSMS.com MD Dr Pieter Streicher says users often confuse weekly charges with individual downloading costs. “This became a problem a few years ago because up until 2005/2006, most content services involved once-off charges. When there was a change to subscription services the mechanism remained the same - messaging a keyword to a code - and initially people were caught out that way. It's still a new industry and there are people that make money out of users' ignorance. But consumers catch up and that makes it more difficult."
Pieter Streicher, MD, BulkSMS.com Waspa describes content subscription services as any service providing or offering material such as sound clips, ringtones, wallpapers, images, videos, games, text or MMS information. This also covers services described as 'club' or those where users who access content are charged both for the subscription element and for the particular content item.
According to Waspa chairman Leon Perlman, the code of conduct has built-in safeguards to prevent the advertising of misleading information. “The rules make it quite clear that Wasps have to provide relevant information so consumers can make an informed choice before subscribing to a service.”
The code stipulates that pricing information has to be clearly and accurately conveyed to customers and that promotional material for subscription services must prominently and explicitly identify them as subscription services. It also states that users may not automatically be subscribed to a subscription service as a result of requesting non-subscription content.
One of the changes in the updated code is more comprehensive guidelines for reminder messages. Wasps are required to send subscribers monthly reminder messages, containing specific information about the service, who the provider is, what the service costs and how to unsubscribe or contact the Wasp. “The reminder messages have to be sent in a certain format, which is predetermined so that messages are quite explicit,” says Perlman.
He adds that a media monitor checks to ensure reminders are being sent. The penalty for failing to send out these messages ranges from a fine to suspension. “The bigger the provider is, the more the fine will be. We are putting a fines system into place that takes into account the size of the Wasp and the degree of the infraction. Offenders can be fined up to R500 000 and a further R10 per subscriber on top of that,” says Perlman.
Streicher believes compulsory reminders are an improvement but that there are still aspects of the subscription payment procedure that are problematic. “If one compares it to the credit card system, which also allows third-party billing, the key difference is that with a credit card you need detailed personal information to make transactions. Things like the 16-digit credit card number, CCV number, name and so forth, but with subscription services you only require a phone number.”
He adds that credit cards have a chargeback function, while mobile services have no way of electronically reversing charges and have to do it manually, which means service providers are reluctant to reimburse charges.
Credit card-holders also get monthly statements, while, especially with prepaid contracts, users do not get regular statements and may only realise after a long time that they are being billed, says Streicher. “The reminder message solves the problem to a large degree but many people ignore or immediately delete these reminders.”
For many disgruntled mobile users, the first port of call is their network operator, but in many cases operators simply let Wasps make use of their network infrastructures and take no responsibility for the billing of an account.