The UK telecoms and media regulator, Ofcom, has today confirmed that they will be taking on the responsibility for day-to-day regulation of Premium Rate Services (PRS) – effectively transferring them from the Phone-Paid Services Authority (PSA) – on 1st February 2025.
Consumers can access a range of interactive services via their broadband-based landline and mobile phones, as well as via computers and digital TV. Where these services are charged for via the customer’s telephone bill, they are known as phone-paid services or premium rate services (e.g. charity donations by text, music streaming, broadcast competitions, directory enquiries, voting on TV talent shows and in-app purchases).
The PSA is currently the designated day-to-day regulator for the PRS market (this derives from Ofcom having exercised its statutory powers to give the PSA that role), while Ofcom itself only provides a legal “backstop” function through enforcement of the PRS Condition. But all that is due to change on 1st February 2025, when those powers are returned from the PSA to Ofcom.
The PSA is still said by Ofcom to have been an “effective regulator for the PRS market for many years” and has helped to significantly reduce complaints. But the market has also undergone some big changes, with legacy services – often provided via smaller companies – in decline and the rapid growth of PRS provided by global tech platforms (Apple, ITV, Sony and Google etc.) and a more compliant market. In short, bigger fish need to be managed by a bigger regulator.
This statement confirms that, following consultation in November 2023, we have decided to:
– withdraw our approval of Code 15 and replace it with the Regulation of Premium Rate Services Order 2024 (PRS Order);
– modify the PRS Condition to require compliance with the PRS Order; and
– modify our Enforcement Guidelines to set out our enforcement approach for the PRS Order and PRS Condition respectively.
To implement a smooth regulatory transfer of PRS regulation from the PSA to Ofcom and after carefully considering the responses to our November 2023 consultation, we have decided to retain in the PRS Order most of the key principles and outcomes relating to PRS regulation that were in Code 15, including:
– consumer protection standards and, specifically, requirements relating to transparency, fairness, customer care, vulnerable consumers and prevention of harm and offence;
– organisational standards and, specifically, requirements relating to registration, due diligence and risk assessment and systems; and
– other responsibilities and obligations, including funding, information requirements and records retention.
We explain in this statement how Ofcom intends to approach any enforcement action we take under this new PRS regime.
The original plan was to bring the PRS Order into force on 1st October 2024, but clearly this has taken longer than planned and so it will now be introduced early next year.