Telstra announces premium SMS consumer safeguards

Telstra has moved to head off further industry regulation through announcing plans to implement new safeguards to protect its customers from unwanted subscriptions to premium SMS services.

Due to be introduced by the end of June, the safeguards include amending Telstra's Premium SMS Service Provider Conduct Policy to extend the double opt-in arrangement to all subscription services regardless of the method of subscription.

A process to terminate providers that have had continued high and unacceptable complaint levels associated with their services will also be introduced, as will an incentive arrangement aimed at rewarding service providers that maintained a good customer service record.

The proposed safeguards follow an announcement from Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, on 31 March that the Federal Government would begin an examination of the consumer code development process and the implementation of new code enforcement powers for the Australian Communications and Media Authority (ACMA).

In a statement Conroy said the protracted development of the Mobile Premium Services consumer code announced had highlighted clear deficiencies with the co-regulatory framework.

"Improving the code development process is only one piece of the puzzle and effective consumer protection should be supported by an increased emphasis on enforcement," he said. “We need to provide the Australian Communications and Media Authority with faster, more effective incentives to encourage compliance with codes and regulations."

A spokesperson for Telstra declined to comment on whether the timing of its premium SMS safeguards was not an attempt by the company to avoid additional government imposed regulation on premium SMS services. However, the spokesperson acknowledged that there had been a high number of customer complaints received in relation to Premium SMS, but would not quantify these.

“Premium SMS has been an ongoing concern for Telstra and the industry for some time - hence the development of the industry code and the extra measures announced by Telstra last week,” the spokesperson said. “Telstra has already taken action against a number of services that have had a high number of complaints and failed to rectify the situation.”

The spokesperson said the three months to the end of June were required to allow enough time for Telstra to implement the new consumer protections.

“There are still some things to be worked through from a provider and systems perspective to support the new measures but we hope to have them in place as soon as possible,” the spokesperson said.