Phone-paid Services Authority: Transfer to Ofcom

Thursday 24th October 2024 Written Statements

[The Minister for Data Protection and Telecoms (Chris Bryant)]

Premium-rate services will be familiar to anyone who watches prime-time Saturday night television, enters competitions on the radio or donates to charity via their phone. Premium-rate services are provided where goods or services are charged to one’s telephone bill and include premium-rate phone calls, for example, to directory enquiries.

Premium-rate services are used by millions of people, but the ability to simply text or make a call and be charged a potentially significant sum for such a small act makes these services prone to abuse, and therefore requires proportionate regulation.

The Phone-paid Services Authority, under different names including the Independent Committee for the Supervision of Standards of the Telephone Information Services and Phonepay Plus, has been the regulator of the premium-rate services sector since 1986. It has been largely successful in discharging its duties and establishing a compliant and productive market. However—like much of the telecoms landscape—the premium-rate services sector and the role of the regulator have changed since the mid-1980s.

Where once the PSA’s focus was largely on setting standards for the providers of premium-rate services, such as information lines and chat lines, the scope of the regulator’s remit has grown significantly. Consumers are now also able to pay for subscription streaming services, purchase apps and give money to charity via text message, with the charges being added to their phone bills. The sector has evolved and continues to evolve, and so must its regulation if consumers are to remain protected into the future.

The Government will be laying the Regulation of Premium Rate Services Order 2024 (SI 2024/1046), a statutory instrument to confer the regulatory functions of the kind exercised until now by the PSA on Ofcom. This decision reflects the continued commitment to streamlining regulatory oversight, enhancing consumer protections and ensuring the efficiency and coherence of our regulatory framework.

The transfer of regulatory responsibility will lead to the closure of the PSA, which is a private company, and Ofcom’s assumption of direct day-to-day regulatory oversight of the premium-rate services sector. To ensure consistency, the Regulation of Premium Rate Services Order 2024 largely replicates the existing code of practice, currently on its 15th version, which governs the sector. However, the order makes a number of minor changes, including extending requirements to all PRS providers to take steps to identify and mitigate risks posed by their services to those who are vulnerable.

To ensure that the specialist and dedicated staff of the PSA are retained and able to continue in their work, the Government will be laying the Transfer of Undertakings (Protection of Employment) (Transfer of Staff to the Office of Communications) Regulations 2024 (SI 2024/1047), a statutory instrument to ensure that the employment of the staff continues, and they are not disadvantaged by the transfer. PSA employees have been consulted about the transfer.

We recognise the significant contributions made by the PSA in safeguarding consumers to date. However, the time has come for a more integrated approach, and we believe this consolidation is the right step to ensure that the regulatory framework is fit for purpose in the digital age.

I will provide further updates to the House as we progress with this transition. We remain committed to ensuring a smooth handover and maintaining the highest standards for consumer protection throughout the process.

[HCWS163]