The TIO has offered recommendations to future proof the regulation of Mobile Premium Services (MPS) in its submission to a review of an industry code.
Among the TIO's recommendations is a proposal that mobile apps and in-app purchases that are charged through consumers' bills should be covered by the code.
The TIO's experience in dealing with these complaints suggests that both consumers and providers may find it difficult to distinguish between some apps and MPS on a consumer's bill.
"A change such as this would future-proof the MPS Code," Ombudsman Simon Cohen said. "The MPS Code has been very successful in stopping the causes of consumer complaints about premium services and there is an opportunity with this review to consider how the code might apply to apps that bypass existing regulations."
Some consumers have complained of being unable to stop MPS messages by traditional methods, or unwittingly subscribing after downloading an app, even if their service has a bar on MPS.
Smart phone apps are not covered by the current industry code and can send messages to consumers without having to comply with requirements such as a double opt-in, MPS barring and easy ways to unsubscribe.
Complaints about MPS have reduced from a peak of more than 13,000 in 2008-09 to about 2,000 over each of the past three years. A key reason for this reduction has been the introduction of an MPS Code in 2009.
One of the common ongoing issues we identified in MPS complaints is uncertainty from providers' frontline staff about their responsibility to handle the complaint. This includes consumers who are told that the provider is "just passing charges on" from a third party.
This at odds with obligations under the MPS Code and the Telecommunications Consumer Protections (TCP) Code requiring providers to deal with consumer complaints about MPS and provide accurate bills.
We recommended that Code rules be strengthened to make clearer when providers should step in, and how they should respond to complaints.
The MPS Code was developed by peak telecommunications industry body, Communications Alliance, which also provides the website www.19sms.com.au to give consumers information about premium services.