Monday, 27 January 2014

WCRD 2014: How consumers are tricked into joining high cost 'text clubs'

As we head toward World Consumer Rights Day on March 15, Boštjan Okorn, head of testing and technology expert at Slovene Consumers' Association (ZPS – Zveza Potrošnikov Slovenije), explains how consumers in his country are being  tricked by mobile companies. 

The advertisement is inviting - you just need to send an entry after completing the crossword puzzle and you will have the chance to win 1,000 Euros.

One consumer, Mrs Vidmar, saw this ad while she was finishing up a crossword puzzle in her favourite newspaper. She decided to enter and was asked for her mobile phone number.

Mrs. Vidmar did not win  - what she was not aware of though is that when she sent out her completed raffle entry form, she instantly became a member of an “SMS club”.

Not long after she sent her entry form, her mobile phone started to receive unwanted commercial  messages.

Although irritating, she ignored these spam messages  since the only messages she reads are those from her family and friends.

When her phone bill arrived, she was surprised that it was much higher than she expected. Commercial services charged her as a result of her automatic subscription to the SMS club.

Sadly, the number of mobile consumers who are being tricked and misled into being members of an SMS club continues to shoot up in Slovenia.

Indeed, automatic subscription to SMS clubs has been one of the major concerns of mobile consumers in the country.

The Organisation for Economic Co-operation and Development (OECD) describes this consumer right violation as cramming. According to OECD, cramming is the collective term for consumer abuse in which the consumers are billed with products or services they did not purchase or products or services they did not receive or when they are charged at a higher fee than the fee that was advertised.

Consumers International aims to highlight and address this sort of abuse for World Consumer Rights Day 2014: Fix Our Phone Rights.

In the CI's five-point WCRD agenda, it calls for providers to “provide consumers with fair and transparent billing”. This encapsulates consumers' demands for fairness and transparency in billing and protection from fraud.

As the number of mobile consumers continues to increase, ZPS is advancing its campaign against the automatic subscription of consumers to any commercial service or product like SMS clubs.

Apart from being more active in writing advice and warnings to mobile consumers to avoid being tricked by SMS clubs, ZPS launched a campaign to ban costly commercial messages being sent without the consumers' consent.

Although the telecommunication operators and regulators in the country rejected the ZPS' call, mobile consumers in Slovenia still had a reason to celebrate for pushing the campaign which ZPS led.

Through the campaign, mobile users can now terminate their membership simply by returning an SMS with the standard word 'stop'.

Since this consumer movement success in Slovenia, the SMS club, in return, became more aggressive in their marketing strategies which in effect continues to mislead mobile consumers.

With support from CI, ZPS aims to convince operators to change the existing SMS club system from opt-out to opt-in.

ZPS believes that such reform will significantly improve the level of transparency in the telecommunication industry. Consumers will be provided adequate information with regard to the service they avail.

ZPS calls for regulators and market inspectors to have a proactive system that will address consumer complaints on misleading advertising that leads to unwilling SMS club membership.

Providers should be more transparent in advertising the price of commercial messages and consumers should always be given the option to stop being a member of the SMS club.

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