Watchdog wants CRTC to tackle SMS short codes

 

 

Surprise charges, hidden sign-up clauses plague users of the texting short cuts, PIAC says.
Watchdog wants CRTC to tackle SMS short codes

Canadians love firing off text messages using short codes, but surprise fees and subscription clauses are creating a wireless wild west that needs to be more strictly regulated, a consumer watchdog says.

Short codes are five- or six-digit numbers used for faster text messaging. They are often easier to remember and use than standard cell phone numbers and are popular for quick one-time texts such as entering contests, or voting in online polls or reality TV competitions like “American Idol.” They can also take the form of content sent to wireless devices through ongoing subscription services, such as jokes of the day, horoscopes, sports scores or weather updates. Since they often cost more than standard texts, short codes are also referred to as mobile premium services (MPSs).

They’re also growing in popularity. Canadians sent and received a total of 2.3 billion short code messages in 2010, a 36 per cent jump over 1.7 billion in 2009, according to the Canadian Wireless Telecommunications Association (CWTA) in Ottawa.

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But many Canadians are getting hit by surprise fees for short code use they thought was free, or discovering that one-time short code use triggers a long term wireless subscription to unrelated content they didn’t want, says a report by the Canadian Public Interest Advocacy Centre (PIAC).

“A lot of consumers don’t understand why they’re receiving these services (and) a lot of consumers don’t understand these services may result in extra charges,” says Janet Lo, counsel for Ottawa-based PIAC and co-author of the study.

The PIAC report goes so far as to say that “consumers are frequently misled by advertisements for MPSs,” pointing the finger at online pop-up ads that lack clear information, feature tiny print, or disappear too quickly after coming on screen.

“There’s a disconnect between consumer expectation based on the way these services are advertised and the services they’re receiving,” Lo says, adding that long term content subscriptions automatically activated by one-time short code use are like “a bait-and-switch.”

On top of facing these unwanted fees and subscriptions, Canadians are not getting enough help from the wireless industry to deal with them, PIAC says.

“The (wireless) industry often dismisses the complaints that are brought forward,” the study says, adding that consumers who complain about short codes “routinely encounter hassles, blame, misinformation, denial of assistance and denial of proof that they opted-in to the MPS.” Some consumers said they continue to receive content they don’t want even after repeatedly following the carrier or content provider’s directions on how to unsubscribe, PIAC says.

PIAC’s study calls on the Canadian Radio-television and Telecommunications Commission (CRTC) to take a closer look at short codes and ultimately consider regulating them under Canadian law, similar to how Australia and the UK moved from industry oversight to an outside regulator. Canada’s wireless service providers currently self-police short code use under rules spelled out in the CWTA’s membership guidelines.

“We have a self-regulated model here but it’s not clear how strongly the industry is being moderated and enforced,” Lo says, noting CWTA does not keep statistics to track how many short code complaints it receives.

Yet the CWTA says it’s doing all it can to ensure short code complaints are few and far between.

“It’s a very, very strict code of conduct and guidelines in place,” says CWTA spokesman Marc Choma.

It’s almost impossible to receive completely unsolicited short code texts because CWTA rules stipulate all short code use must be initiated by the consumer first, Choma says, which means all short code content sent to consumers is solely on a reply basis.

He points out that anyone who wants to start operating a short code text content service must apply to the CWTA first under a “very rigorous process.” And premium short code messages require a double opt-in process, meaning consumers must twice confirm their desire to be signed up before the short codes are valid, Choma says. If users do complain, CWTA already has a fulltime auditor dedicated to overseeing short code programs, he says.

As for PIAC’s suggestion that the CRTC start regulating short codes? Choma says the whole thing feels like a case of déjà vu.

“It’s been less than two years since the CRTC looked into this,” Choma says.

He’s referring to 2009 when Quebec consumer group Union des Consommateurs asked the CRTC to make wireless providers waive disputed charges. The CRTC declined to do that, ruling that market forces and the wireless industry’s self-regulatory framework were already strong enough to protect consumers.

One mobile marketing company says the CWTA’s short code rules offer plenty of incentive to keep content providers from straying beyond the boundaries.

“If we don’t follow the rules our (short code) privileges get removed and we take this very, very seriously,” says Brady Murphy, vice-president of mobile for Transcontinental Interactive in Toronto, which runs mobile marketing campaigns for clients like Labatt, Scotiabank and the Toronto Transit Commission.

Even if one of Murphy’s clients violates the short code rules without his knowledge — perhaps by sending unsolicited short code content — Murphy and his company are still responsible under CWTA guidelines and their short code privileges would be suspended for all of their clients, he explains.

“It really scares me. When we engage with a (content) partner, if we think they’re not going to be on the up and up, it’s not worth losing our good standing with carriers and with our consumer brands,” Murphy says.

Carriers like Telus Corp., are also showing willingness to act swiftly on short code complaints.

Following consumer complaints, Telus recently found that a third-party content provider was violating the CTWA’s rules of conduct for short codes. So Telus opted-out all of its customers from that particular service and credited one month of related charges back to their wireless accounts, says Telus spokesperson A.J. Gratton.

Telus will also waive unexpected short code charges the first time a customer complains about them, Gratton adds.

To avoid falling victim to short code scams or violations, here are some tips courtesy of both Lo and the CWTA: Be aware that you may be billed for short code text messages simply for receiving them, even if you do not open the text message or reply to the text messages, and you may be charged even if you have an unlimited text messaging plan.

  •     Be wary of online contest entries or surveys that require you to provide your mobile phone number to participate.
  •     Read the fine print to ensure that you are not signing up for a subscription service and that you are clear on what the charges will be for the premium text messages.
  •     You can opt out of a subscription-based service by cancelling it; simply text the word “STOP” to the originating short code.
  •     To get more information on where the short code originated and what it pertains to, text “HELP” to the short code. The content provider must send one message containing their (or their client’s) company name and customer service contact information.
  •     Any short code subscription service requires that a monthly reminder be sent out that includes information about the content, its provider and the cost. If you’re receiving short code content with no reminder, contact your service provider to make sure you haven’t subscribed inadvertently.
  •     To dispute a charge on your bill, contact your wireless carrier. Ask for a full record of the charges, including details of whether the opt-in was completed online or via handheld device, etc.

You can voice concerns to CWTA, the Competition Bureau, the CRTC and the Canadian Anti-Fraud Centre.

By : Christine Wong

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