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04|08|05

Ofcom approves amendment to ICSTIS Code of Practice

Ofcom today confirmed its approval of an amendment to the premium rate regulator ICSTIS's Code of Practice. The revision will prevent network companies who connect premium rate calls from sharing call revenues with providers offering premium rate services for at least 30 calendar days after calls have been made by consumers.

Premium rate calls cost up to £1.50 per minute from the BT network and typical services include TV vote lines, competitions, adult services, chat lines, mobile phone ring tone downloads, and interactive TV games.

The 30 day rule will allow ICSTIS important additional time to assess complaints and detect misleading or potentially fraudulent activity. Call revenues may then be frozen during any additional ICSTIS investigation that is necessary. This change is a key recommendation from Ofcom's report to DTI on improving premium rate regulation.

The new requirement will deliver additional protection for consumers in two ways:

• Rogue premium rate service providers will not be able to secure revenues in advance of consumer complaints. This will remove an important incentive from criminals who want to abuse the premium rate industry;
• Delaying payments to premium rate service providers will improve the prospect of customer refunds where an ICSTIS investigation concludes that a customer has been the victim of misleading or potentially fraudulent service.

The 30 day rule will come into effect on 15 September 2005 and follows consultation by both ICSITS and Ofcom.

Separately today, Ofcom and ICSTIS have also published details of a new Memorandum of Understanding (MoU) between the two organisations. This forms another key recommendation from the Ofcom report to DTI.

Under Sections 120-121 of the Communications Act 2003 Ofcom is responsible for setting conditions for the regulation of premium rate services and for approving the ICSTIS Code of Practice. ICSTIS is responsible for administering the Code of Practice, and for enforcing compliance by all premium rate service providers.

The MoU will support this co-regulatory model, providing a clear division of responsibility between the two organisations. The MOU covers a range of important issues including:

• New Key Performance Indicators (KPI) for ICSTIS, to be agreed with Ofcom and published every year. These will cover all aspects of ICSTIS contact with consumers and industry. ICSTIS will report publicly on its performance against these KPI every six months;
• Continuing the joint approach on enforcement of ICSTIS directions. Ofcom will work closely with ICSTIS to strengthen effective enforcement processes. The two organisations will seek to ensure a culture of compliance throughout the premium rate industry.

Both documents are available on Ofcom’s website at www.ofcom.org.uk

Ends.

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