Premium-rate message firms could be hit with €250k fine

8 Oct 2009

Unlicensed premium-rate SMS-message firms that target vulnerable members of society, including children and the elderly, with “scam” messages will be hit with fines up to €250,000 under new legislation.

Minister for Communications, Energy and Natural Resources Eamon Ryan has introduced a bill that will enforce stricter regulation on the controversial sector, including mandatory licensing, a new code of practice and hefty fines.

Premium-rate services offer products such as mobile phone ring tones, wallpapers, games and other subscription services. Sometimes, consumers inadvertently sign up to such services, resulting in financial loss. Evidence has shown that often children and the elderly are particularly vulnerable to this.

Consumer scams

“While the premium-rate service industry is a valuable contributor to the Irish economy, a minority of rogue service providers are involved in misleading, and essentially ‘scamming’ the consumer,” Ryan said.

“These practices cannot continue, and those companies must no longer be allowed to operate.”

About 76 million premium-rate text messages were sent in Ireland in 2008. As the services grow in popularity, more and better regulation is required.

Under the new bill, regulation of the industry will transfer from RegTel, to the Communications Regulator (ComReg). ComReg will have greater power of enforcement, and will be in the position to impose fines and suspend or revoke licences, where sharp practices occur.

Service providers will require a mandatory licence to operate, and must comply with conditions of that licence.

An offence of overcharging for a premium-rate service will be created and fines of up to €250,000 will apply for operation without a licence.

ComReg’s powers

ComReg will also have the power to amend, suspend or revoke a licence for failure to comply with the conditions of the licence.

At least 6,000 official complaints were made to RegTel in 2008, 98pc of which related specifically to premium-rate service operators.

“Responsibility, as well as regulation, is at the centre of this legislation,” said Ryan.

“Both the industry and the regulator must work together to preserve consumer confidence and afford greater protection to mobile-phone customers in Ireland,” Ryan said.

By John Kennedy

Photo: Minister for Communications, Energy and Natural Resources Eamon Ryan.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years