Canadian nonprofit asks for stricter regulation of premium SMS promos

By Giselle Tsirulnik

March 10, 2009

Consuming content on mobile

The Union Des Consommateurs, a Canadian nonprofit group, is asking for stricter regulations for text- message marketing promotions.

The nonprofit is organizing a submission for Canada's telecommunications regulator requesting strict rules for premium text messages.

"If you are asked to register your mobile phone number on a Web page or send an SMS from your phone to a short number, beware," Union Des Consommateurs says on its Web site for consumers.

"Many of these services are a form of subscription and once you subscribe, you receive a text message, then another, then another," it says. "The carousel can be expensive."

Mobile subscribers hit by this so-called carousel reported to the Canadian Consumers' Union (Union Des Consommateurs) that they have received several text messages per week, costing around two dollars each. They are also responsible for paying the regular texting fee where appropriate.

Legitimate marketers always reveal any costs associated with a service and ask consumers to agree in a straightforward manner.

Unfortunately the reality of it is that consumers do not always give informed consent.

The contract, when it exists, is often written in language that average consumers are not familiar with.

Often, consumers get their monthly bill and only then realize they were trapped into these fees.

The Canadian Wireless Telecommunications (ACTS) handles the short codes used by companies that send such SMS.

ACTS has published a code of ethics that says that consumers should be entitled to terminate the subscription and the company should provide some support to customers.

The Consumer's Union feels this is not enough.

Canadian customers have been complaining about these unauthorized charges.

Consumers have reported charges up to $300 for premium messages they don't even remember signing up for.

One customer complained to the Consumer's Union that they refused to pay the premium text message charges and as a result had their wireless service shut off by the carrier.

The group has asked the Council for Broadcasting and Telecommunications Commission (CRTC) to require carriers to remove charges for premium text messages from their customers' bills while a complaint is investigated.

The group is also asking carriers to refer complaints to the Commissioner for Complaints for Telecommunications Services for investigation and to forbid wireless carriers from turning off their customers' service when the subscriber is disputing premium message fees.

"The Consumer's Union is researching this problem and seeks solutions simpler for consumers," the group said on its Web site. "In some cases, companies that send SMS may have violated certain provisions of the act on consumer protection."

Comments on "Canadian nonprofit asks for stricter regulation of premium SMS promos"

1. Matt Martin says:

   March 11, 2009 at 2:24am

   Good piece gissele...aren't most people these days using unlimited text plans anyway? Also, if you sign up for it, isn't that your consent of interest in what they are offering to send you? I've never heard of anyone getting charged to RECEIVE any kind of messages other than a MML message, even then most plans don't charge you for that. My advice to the complainers would be to not sign up to receive the sms and secondly, find a better service carrier.

2. Dylan B says:

   March 10, 2009 at 5:30pm

   Giselle, great article--as I'm sure many people know, not only can the "SMS promos" cause major headaches but they can also bloat cell phone bills. Not to blatantly plug, but one way to regain control of your cell bill is to use the consumer advocacy website that I work for, http://www.fixmycellbill.com, which is powered by a company called Validas. We slash the average cell bill by 22 percent and effectively eliminate unnecessary plan add-ons. It costs five bucks to implement our suggested changes to your plan (the average consumer currently saves around $450 annually through us) but we will analyze your bill for free without any commitment of purchase, just to let you know exactly how many dollars your carrier is ripping you off by. I could go on and on about how shifty these cell companies can be in their attempts to make you overpay. We stop them, and have currently put nearly $4.7 million back in the pockets of consumers. You can check out Validas’s fixmycellbill.com in the national news media, most recently on Good Morning America at http://www.abcnews.go.com/GMA/story?id=6887412&page=1.
   
   Good luck to all the empowered consumers who want to save money cash in this tough economy.
   
   Dylan