BulkSMS.com calls for increased awareness of mobile subscription services

There is little awareness among South African consumers as to how mobile content subscription services actually work despite the fact that many frequently download information, images, ringtones, music, games, video clips and wallpapers to their cellphones in response to an advertising campaign.

Confusion between once-off mobile content downloads and subscription services results in consumers inadvertently signing up for a subscription service. They receive ongoing mobile content and are billed continuously as opposed to once off as with premium rate SMS. Most do not know how to stop a subscription service or know what recourse is available to them to lodge complaints against a subscription service.

What are subscription services?

Subscription services are long-term mobile content services where a consumer is billed at regular intervals on an ongoing basis.

Popular subscription services are cartoons, pop culture gossip, weather updates, religious messages, motivational messages, tips for weight loss, adult content, horoscopes, and daily news feeds and the latest rugby or cricket scores.

The uptake of mobile content subscription services in the market has occurred on the back of the success of premium rate SMS (PRSMS). Both once-off premium rate SMS and subscription services involve sending a keyword (eg AB123) to a shortcode (eg 35010).

"Due to the similar nature of the subscription service and PRSMS, consumers are confusing subscription services with once-off premium rate SMS billing for mobile content, even when adverts clearly state the word `subscription`. As a result, many consumers are unaware that they have purchased a subscription service. They need to be made aware of the difference between the purchase of a single content item for download and the receiving of ongoing mobile content via a subscription service," said Dr Pieter Streicher, managing director of BulkSMS.com, a division of Celerity Systems.

Subscription services offer consumers the benefit of receiving requested mobile content on a daily, weekly or ongoing basis. Consumers are not required to re-confirm the repeated billing of the service as they have agreed to the service on subscription.

This billing option ensures a consumer will pay less for content in comparison to downloading single purchases over a fixed period of time. For example, a single weather alert costs R2 per download. Over a month this would have cost R60 for a download per day, and the cost would increase if more than one request for content was made per day. A monthly subscription service for the same content is charged at R20 per month.

The inadvertent downloading of mobile content via subscription services exposes consumers to unexpected data charges.

The most widely publicised instance of consumer complaints against the promotion of a subscription service was in the United Kingdom. MBlox and Jamba`s Crazy Frog ringtone campaign came under fire as consumers complained to the industry regulator that the advertising for the service was confusing and unclear as to the costs of the service. Most of these consumers indicated that they were under the impression that there was a once-off payment for the ringtone. They were not aware that the purchase was in fact a subscription to ongoing mobile content services. The regulator ruled that MBlox, as the service provider, was liable for a fine and was required to reimburse complainants.

"The lesson for wireless application service providers in South Africa is that the terms and conditions of subscription services must be made clear no matter the medium used to advertise a promotion. Consumers must be able to easily identify the cost and billing implications of a service before selecting mobile content downloads," said Dr Streicher.

In many cases, consumers realise they are subscribed to a service only after receiving content on several occasions. Some services, however, do not even involve the receiving of content; for example, when a "mobile club" is joined. Mobile clubs offer consumers access to a community of mobile users and content services, although consumers do not necessarily need to interact with this club.

"My advice to consumers is that those with a contract should monitor their cellphone usage via itemised billing and identify whether they are charged for any subscription services. Prepaid consumers should call their network provider and ask them to check their billing records to find out if they are being billed for any subscription services," said Dr Streicher.

In BulkSMS.com`s experience, the vast majority of all queries pertaining to subscription services come from prepaid consumers unsure of how to unsubscribe and unsure which company is providing the content.

"Many prepaid consumers complain of losing airtime by receiving subscription content, especially those consumers in the youth and lower income brackets. This leaves many prepaid consumers out of pocket and afraid to switch on their phones," said Dr Streicher.

To address these problems, the Wireless Application Service Provider Association (WASPA), a South African industry body, has established a code of conduct for mobile services. The problems described above will all be eliminated if all service providers adhere to this code of conduct. However, the system will only work if consumers are aware of the rules and lodge complaints where necessary.

This code of conduct includes the procedures for lodging a complaint against a subscription service. It is available from the WASPA Web site, www.waspa.org.za.

The rules for mobile content subscription services include the following provisions:

* All promotional material should explicitly state that the service provided is a subscription service.
* Consumers cannot be automatically subscribed to a service when requesting the purchase of mobile content.
* The service provider must send a message to a consumer to confirm a request to join a subscription service.
* On subscription to a service, a consumer must receive a notification message indicating the cost of the subscription service, the frequency of the charges, how to unsubscribe from the service, and the service provider`s contact details. A service provider must indicate a South African telephone number, which cannot be a PRSMS, and offer assistance between 08h00 to 17h00.
* Unless a consumer explicitly gives permission, the amount and the billing frequency of the subscription service cannot be increased.
* The billing information must clearly indicate that a subscription service has been purchased.
* Children must confirm that they have permission from a parent or guardian to access a subscription service.
* A reminder message must be sent on regular intervals to confirm that a consumer is subscribed to a service and include the name of the service provider, their contact details, name of the service, the charge and the frequency of the billing.
* Help information for the subscription service must be easily accessible to consumers, and should include consumer support desk to field queries.
* A consumer should be able to unsubscribe (or opt-out) from a subscription service at their discretion by replying with the word "stop" to the service provider at a fee of no more than R1.

Read the fine print is a well-used adage when consumers complain about the purchasing of services and it is as important when purchasing mobile content as any other goods. If consumers feel that the advertising of a subscription service for mobile content has not been clear, they have recourse to lodge a complaint via WASPA.

"It is important for consumers to know how regulations work so that they can take action when their rights are infringed on," said Dr Streicher.