The telecommunications regulator has issued strong guidelines to curb malpractices in how value-added services are sold by licensed mobile operators. The framework envisages, among other things, a practical mechanism for unsubscribing from value-added services. It also introduces a billing and dispute management process for consumer complaints. Importantly, “No VAS [value added service] may be promoted [...]

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TRC issues guidelines to protect consumers from mobile operator malpractices

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The telecommunications regulator has issued strong guidelines to curb malpractices in how value-added services are sold by licensed mobile operators.

The framework envisages, among other things, a practical mechanism for unsubscribing from value-added services. It also introduces a billing and dispute management process for consumer complaints.

Importantly, “No VAS [value added service] may be promoted as being free if it involves any charges whatsoever to the consumer, even at a later date,” the guidelines state. “There should be no hidden charges. Any associated charges for services rendered should be clearly disclosed upfront at the point of subscription by the subscriber.”

Just last week, the Insurance Regulatory Commission of Sri Lanka (IRCSL) ordered insurance companies to stop using mobile service providers to hawk their policies and to accept liability themselves. However, subscribers continue to receive insurance promotion messages via SMS gateways used by mobile service providers to sell value-added services.

The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has now issued separate guidelines for mobile companies after observing a “significant amount of customer complaints increasing over the years” regarding value-added services’ subscriptions and billing. They provide insight into the plethora of grievances lodged with the TRCSL by consumers over the years.

Among other things, mobile companies must hereafter provide information in all three languages. Before activating any type of value-added service, the operator must inform the subscriber in his or her preferred language the name of the service; its terms and conditions (with a direct link to them); charges including tax and billing frequency; subscription tenure; and deactivation method.

The TRCSL also mandates that all activated value-added services should be followed up with a message each time the subscriber is charged, based on the opted billing cycle. The message should include a link to unsubscribe from the services at the discretion of the user.

“This message is mandatory to be sent to all subscribers at the point of each recursive billing charge initiated on the subscriber,” the guidelines state. “This should be retrospectively applied to all VAS activated previous to these guidelines on subscribers.”

“One Time Password (OTP)” verification has been made mandatory for any type of value-added service activation. “Based on a successful validation of activation of a service by a subscriber… a reconfirmation should be initiated with an OTP mechanism for reconfirmation of the subscription by the subscriber,” the TRCSL rules.

Under no circumstances should mobile operators allow third party web banner-based subscriptions and no such entities must be allowed to bill subscribers for services unless these are directly promoted as value-added services by the companies.

Third-party billing arises from “mobile customers mistakenly joining subscription services by simply clicking on an advertisement or web page”. Registration takes place without the knowledge of the subscriber. Charges are automatically slapped on the bill, whether post or prepaid. And if customers do not inquire about the added fees, the companies continue levying them by default.

Customers must be given different charging options (daily, monthly, weekly) at the time of activation, clearly mentioning the amount and tenure (renewal period) of the value-added service. Any charges applied on prepaid wallets must be conveyed to customers clearly with name of value-added service, fee applied and method of unsubscribing at the time of charging the customer.

For post-paid customers, the same information must be made clearly available in the monthly bill as well as in the message to be dispatched at the point of charging. All value-added service details must be made available across self-care channels (apps) for customers to activate or deactivate using a smartphone or feature phone. Any deactivation must be completed in a maximum of one hour.

The regulator has prohibited mobile service providers from activating new value-added services if a pre-paid account balance is insufficient to do so. Other rules are applicable in the case of weekly billing.

Operators are also bound to take “all necessary organisational and technical measures and procedures to preserve and protect the confidentiality of information and data of subscribers,” the guidelines state. Operators cannot share subscribers’ ownership details including connection numbers with third-party content service providers “without the express consent of the subscriber”.

Mobile service companies must have a dedicated team to address complaints regarding value-added services, the TRCSL states. If a pre-paid subscriber disputes, and the operator identifies that a service was activated without consent, the amount charged shall be refunded within three working days (in the case of per-day billing) and five working days (in other cases) from the complaint report date. The same applies to post-paid customers.

Operators are required, too, to submit to TRCSL a comprehensive report on consumer complaint resolutions and status at the end of each month.

Earlier this year, the Sunday Times revealed how mobile phone users were being sold per-day insurance policies via their telecom subscriptions, entirely unregulated by the IRCSL. It was being carried out through short telephone calls made by third parties (neither the insurers nor the mobile service providers). There was typically no contract for a customer to examine and no clarification about exclusions; And no independent research on how many customers gave up, forgot, did not realise nor understand what a policy entailed.

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