Mobile premium services and direct carrier billing still catching out consumers

Jade Baggins-Clark has never been a big user of smiley-face animations on her mobile phone, and yet every month for the past five months she receives one on her Android device.

Unfortunately for Ms Baggins-Clark, she never asked for the smileys, nor for the $5 price tag that comes with each one. The Bathurst mum of two is one of many consumers left questioning premium service charges on their monthly mobile phone bills, for which they have no recollection of signing up.

Rather than appearing on credit card bills, third-party charges show up on mobile phone bills after subscription or in-app purchases are made. “Customers should be aware that when payment is made for a download of a particular item such as a novelty ring tone, there may be hidden charges in the form of ongoing monthly subscriptions the consumer is automatically signed up for,” said Fair Trading Commissioner Rod Stowe.

‘It’s called direct carrier billing and while it is a legitimate system by third party companies to enable payment for content on mobiles or tablets, we are seeing more evidence of misuse.”

Google Play is currently the only participating online store that offers direct carrier or account billing, available to Telstra and Optus customers who use Android mobile devices. Direct carrier billing is not yet available for iPhone and iPhone apps.

Complaints received by Fair Trading about third party charges are passed on to the Telecommunications Industry Ombudsman, which reported an increase of almost 30 per cent in complaints during 2014-15, to 1,879. “About five months ago I started getting these messages … they would send a smiley-face GIF and charge $5 each time,” Ms Baggins-Clark said.

“I’ve tried to stop it, but to no avail. It says to reply STOP to [unsubscribe], but when you do that it says the phone number is invalid and then you call it and no one answers.” In recent days she has also received messages from a fitness organisation, another service for which she did not knowingly sign up.

Ms Baggins-Clark contacted her provider Telstra to seek assistance, but was told that they could do nothing as the subscription was through an external company. A Telstra spokesperson confirmed direct carrier billing was an “industry practice,” but said customers were also protected by consumer safeguards.

He confirmed that Telstra provided mobile numbers to approved content partners, “to enable customers to receive a service, pay for it via their Telstra bill and receive subscription text messages,” subject to “tight restrictions”. “Customers can contact us to cancel an existing subscription service, bar premium mobile services on their account and restrict future access. We certainly apologise to our customer if this has not happened on this occasion and we will work to rectify this,” he said. It is understood both subscription-services linked to Ms Baggins-Clark are examples of the content partners with whom carriers would share mobile numbers.

Optus allows customers to set a monthly spend limit on third party content purchases or bar them all together, but a spokesperson confirmed such content required a “double opt-in” in two separate confirmation steps. “If a customer subscribes to third party content, they will receive a notification on purchase and monthly reminders from the third party content provider, they can generally unsubscribe by replying with the word “STOP.”

However, in Ms Baggins-Clark’s case, simply replying “STOP” was no solution. “It seems our consumer rights are being eroded. It’s become so multifaceted and complex to follow up issues like this,” she said. Mr Stowe encouraged consumers who struggled to unsubscribe from services to contact their service providers and ask them to bar calls and messages from premium service providers. “The relevant regulatory authorities will pursue any business breaching consumer protection laws,” he said.

Source: Sydney Morning Herald, 14 March 2016