The Telecom Regulatory Authority of India (TRAI) has directed (pdf) all telecom service providers to ensure that all pay-per-use value added services (VAS) pre-loaded on SIM cards are activated only after obtaining explicit consumer consent. Telcos have till January 13, 2015 to comply with this directive.

Consumer complaints regarding activation of VAS without consent received by TRAI revealed that in most cases these VAS products were related to the ones pre-loaded on SIM cards, which the consumer might have accidentally or unknowingly clicked and got charged for. The consumer wasn’t provided the opportunity to agree or decline to proceed.

Mobile-VAS-Fraud-Complaint

Telecom service providers have apparently told TRAI that their understanding was that TRAI’s earlier directives were for subscription-based VAS products only, and since most of the VAS products pre-loaded on SIMs are charged on a pay-per-use basis the two-step consumer consent process wasn’t followed.

TRAI mandated procedure for obtaining consumer consent

– Consumer explores pre-loaded VAS products on SIM and selects one

– Telecom service provider has to inform consumer through SMS about the VAS requested, its validity, charges and ask the consumer to confirm the request through SMS within 60 minutes.

– In case the consumer doesn’t reply or if it’s after 60 minutes the request must be cancelled.

– In case the consumer confirms request the VAS product is activated and the consumer consent log needs to be stored in the system of the telecom operator in un-editable format.

– Consumer is informed immediately through SMS about the activation, the amount deducted and the remaining balance.

Telecom operators not respecting TRAI directives?

This isn’t the first time the issue of obtaining consumer consent for mobile VAS has come up. Last year, TRAI had mandated that for activation of mobile value added services, across types of scenarios – Outbound Dialer (OBD), Voice Portal (IVRS), WAP, Mobile Internet, USSD, SMS and Telecalling, or any other method – telecom operators needed to provide a system which takes a second consent from the customer before it is enabled. In case of incorrect activation, the telcos needed to refund the amount within 24 hours of the customer request. Additionally, TRAI had also directed that a common toll-free deactivation number (155223) be set up and that all deactivation requests should be processed in 4 hours.

TRAI had issued a similar directive back in 2011 as well. TRAI had directed that service providers shall obtain confirmation from the consumer through consumer originated SMS or e-mail or FAX or in writing within 24 hours of activation of the Vas product and charge the consumer only if the confirmation is received from him and shall discontinue service if no confirmation is received from the consumer. TRAI had also mentioned that it had been receiving complaints from consumers about telecom providers renewing VAS products (in case of prepaid subscribers) even when the available balance in the customer’s account is insufficient, resulting in negative balance.

Our Take

I think it’s high time that TRAI took some action against telecom operators that have consistently ignored such directives. Also, why hasn’t TRAI clearly mentioned what consequences telecom operators are likely to face in case they don’t comply within the 60 days period?

Nikhil adds: I don’t quite understand why this directive was needed: consumer consent should have become mandatory for all VAS, whether pre-loaded on SIM or not, whether subscription or pay per use. User consent was meant to be recorded. Any assertion that the previous guidelines were only for subscription services is a disingenuous one.

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