ACMA cracks down on premium SMS messages

ACCC says opt-in model doesn't go far enough in protecting consumers

The Australian Communications and Media Authority (ACMA) has introduced new mobile phone rules that will give telco customers the option to block premium SMS messages from being sent to their phones.

The new rules, which come into effect from 1 July 2010, and they follow similar measures introduced last year with the Mobile Premium Services Code in relation to premium SMS services. The ACCC introduced an industry code, and fines of up to $250,000 for those who didn’t comply.

The ACMA and consumer groups believe the new premium SMS barring rules will help mobile phone users to manage their budget, and assist parents to exert more control over costs on their children’s phones by preventing unwanted SMS charges.

ACMA Chairman Chris Chapman has stated that the option will be very easy to enable, as it is designed to help mobile phone customers who may not know what they are agreeing to when they sign up for a mobile service such as downloading ringtones, games, or pictures.

"If you don’t want these services, you can simply contact your phone company and ask for them to be turned off," he said.

"This will be a great option for parents who want to make sure their kids don’t sign up for something without understanding the charges. And people trying to manage their phone budget can stop premium charges by barring these services from their phone."

The request for a bar has gone against a recommendation made by the Australian Competition and Consumer Commission (ACCC) to have an automatic bar in place, with users having to request for the bar to be lifted and not the other way around.

"The ACCC supports a default [mobile premium services] barring model," the watchdog said in its submission. "The ACCC considers an opt-in model [the one selected by the authority] to be a weak second option."

The model chosen by the ACMA was backed by Australian telcos including Telstra, Optus and Vodafone Hutchison, who previously warned that consumers might have difficulty gaining access to premium information services if the ‘automatic’ rule was introduced.

Though the 'opt-in model' might only be effective if users were aware that mobile premium services existed, and that there was an option to bar them, a spokesperson from the consumer group Choice has stated that it is nonetheless a positive start.

"We are really pleased that this bar is in effect. It’s a good start, but we’d like to see ACMA adhere to other recommendations," said Elise Davidson, Choice spokesperson.

Complaints to the Telecommunication Industry Ombudsman about premium SMS services fell by 50 per cent following the introduction of the Mobile Premium Services Code in July last year. The ACMA expects this drop in consumer complaints to continue following the introduction of the new rules.

"The ACMA expects this trend to continue and will be monitoring the industry closely over the next twelve months to ensure that consumer concerns are being adequately addressed," Chapman said.

New rules to stop mobile phone companies engaging with rogue operators are currently in development.

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