This is why the NMHH is monitoring the market for premium rate services
The “Premium Rate Service”, which is essentially a service that includes the cost of the call and the price of the content services received, became widespread in the late 1990s and is still in use today. In response to market needs, from 2006 a new number range was introduced, 91, which stood for “Special service with premium rates”. This also allowed calls to be made that did not pose a risk to the protection of minors. The fee for the “Special service with premium rates" has not changed over the years, and is currently still a maximum of gross HUF 1,000.
The premium rate numbers were the most popular in 2013, when premium rate services accessible through short codes starting with 16 were introduced. From that time onwards, a distinction was made between services with a charge limit, services without a charge limit and adult services.
More and more complaints, but always the same
Complaints about premium rate services have been present from the moment they entered the market. Complaints have typically remained unchanged since then, usually relating to charges, such as "I did not call that number", “I did not call the number that many times”, “My call was not that long" and "I didn't know and wasn't informed that this call was a premium rate call ", "I have been misled and deceived".
Legitimate subscriber complaints that came to the attention of the National Media and Infocommunications Authority from the 1990s until the mid-2010s typically stemmed from unauthorised access to fixed (stationary) analogue subscriber networks. Only technological progress has eliminated the possibility of such abuses.
SMS, pop-ups, false virus threats
The emergence of short text messages (SMS) provided an opportunity for the spread of premium rate SMS based services both, called and received. Content providers sent these paid messages on a weekly or daily basis, based on prior registration. These have led to a significant number of complaints from subscribers, so in 2012 the Media Authority issued an order regulating the default blocking of received premium rate SMS messages and the possibility to unblock all premium rate restrictions only after verification of the subscriber's identity. This regulatory provision has led to a significant reduction in the number of "I didn't know I had to pay for the messages I received" complaints about subscription-based and pre-registered premium rate SMS messages.
The next major problem the Authority faced in the provision of premium rate services was in 2017. By then, smartphones had already appeared, bringing with them so-called "pop-up windows". Sufficiently attractive or frightening advertisements could be used to trigger a process, with a single click or press of a button, whereby the unsuspecting phone user would end up subscribing to a premium rate service to which they had accidentally subscribed. The Media Authority detected such pop-up advertisements on the premium rate numbers 90-647047 and 90-647725, and on the premium rate short numbers 16036, 16056 and 161155. The official inspection found that, on the one hand, there was no evidence that the "virus" or "malware" condition encouraging the use of the service was real, and on the other hand, the service actually provided did not result in "virus removal" or "malware removal", but in all cases was aimed at ordering the SMS service provided at a premium rate – to make a profit and to defraud. The police investigation failed to identify the perpetrators, but the Authority took effective action to compensate the victims.
Both compensation and reimbursement have been made
In addition to the interim measures, a full investigation was launched into the conduct of all three mobile phone operators in the provision of premium rate services and the detected crime of fraud by an unknown perpetrators causing particularly serious damage. The Authority also filed a police report on the matter. During the investigation, the authority found several serious breaches of the law and failure to comply with certain obligations. In the case of all three mobile phone operators, it found that they had authorised users providing service on a number to use the identifiers of premium rate services on the basis of agreements concluded with the user providing service on a number that did not contain the mandatory elements required by law.
The compensation for the abuses committed by deception was closed in 2019. All three mobile phone operators undertook the obligation to identify and compensate the full range of affected subscribers. The total amount of this compensation, which cannot be enforced by the authorities, amounted to HUF 350 million net for the three mobile operators. The total amount of fees billed for premium rate numbers affected by this abuse and full reimbursement of the fees paid by subscribers already reached nearly half a billion forints. All three mobile phone operators fully complied with their obligations.
Targeting “IVR prize draws”
The Authority launched its next procedure related to premium rate services in September 2021 against 4Voice Kft, after it found that the premium rate register published on the company's website in pdf format did not make clear the name of the service requested. A detailed investigation of the service, available on the premium rate number 90-900 956, revealed that the identifier was used to organise prize draw promotions in the framework of an Interactive Voice Response (IVR) quiz game, which informed that the caller had won a prize, under the name of a well-known commercial entity (Spar) and telecommunications operators (Telekom, Telenor). To claim the prize, the number specified above had to be called and questions needed to be answered. This took about 10 minutes, which cost the caller a thousand forints per minute. In February 2022, the Authority also detected abusive use of identifiers in the case of two premium rate numbers used for "IVR prize draws", where the actual provider was also 4Voice Kft, and the user providing service on a number was Calgo Kft. Due to the detected violations, the Authority ordered 4Voice Kft to refund the fees collected through the abusive use of identifiers and to publish the infringing activity on its own website. Currently, 4Voice Kft has filed an appeal against the first instance decision, so the decision is not yet final and the appeal is pending.
The market for premium rate services has recently undergone significant changes. Most significantly, mobile operators have phased out their SMS-based premium rate services and the use of premium rate short numbers has also been discontinued. The indirect consequence of this is that there is an increasing number of premium rate services for which such a communications service provider has the right related to the premium rate numbers, which intends to provide its content services primarily to subscribers of other communications service providers rather than to its own. This situation unfortunately makes it more difficult to protect the interests of subscribers and to compensate them as described above.
Therefore, the significant changes regarding the market players providing access to premium rate services make it essential that the National Media and Infocommunications Authority continuously monitors the market situation and intervenes where necessary.