Govt cracks-down on SMS plans

Clearer advertising, more safeguards under new telco laws

The federal government has put an end to sneaky premium SMS subscription plans with a spate of new powers handed to the industry regulator.

Under the rules, premium SMS content providers will have to come clean about the cost of ongoing phone messaging plans, often sold via cheap ring tones or phone applications.

Providers must be more transparent about their subscription plans and advertising, and allow consumers to bar ongoing services from July 1, 2010.

Consumers will also have to verify their acceptance of plans twice.

Communications Minister Stephen Conroy said the new laws send a tough message to the mobile phone industry.

“Misleading practices in the mobile industry will not be tolerated and providers must ensure better protection for consumers,” Conroy said in a statement.

“I am optimistic that this new code will result in enhanced levels of confidence for consumers when dealing with the industry.

“However, should problems arise in the future the government will look to further strengthen the measures announced today.”

The Mobile Premium Services code, jointly created by government and the industry body the Communications Alliance, will require all premium SMS operators to register on a list, and could see repeat offenders fined up to $250,000 in the Federal Court.

Providers will be banned from dealing with operators not registered on the industry list.

The regulator will also be able to ban providers that commit serious offences from operating for a specified time.

Further controls force operators to act on subscription removals with 24 hours and apply the changes to all marketing lists.

The code will be reviewed in 12 months.

Telstra has amended its own policy for premium SMS service providers to extend the government's double opt-in arrangement to all subscription services. It will also terminate providers with high and unacceptable complaint levels, and has developed a reward scheme for providers that maintain good customer service records.

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